diff --git a/homeassistant/components/mill/__init__.py b/homeassistant/components/mill/__init__.py
index 401a0f9e854..b2f06597563 100644
--- a/homeassistant/components/mill/__init__.py
+++ b/homeassistant/components/mill/__init__.py
@@ -66,8 +66,11 @@ async def async_setup_entry(hass: HomeAssistant, entry: ConfigEntry) -> bool:
         key = entry.data[CONF_USERNAME]
         conn_type = CLOUD
 
-    if not await mill_data_connection.connect():
-        raise ConfigEntryNotReady
+    try:
+        if not await mill_data_connection.connect():
+            raise ConfigEntryNotReady
+    except TimeoutError as error:
+        raise ConfigEntryNotReady from error
     data_coordinator = MillDataUpdateCoordinator(
         hass,
         mill_data_connection=mill_data_connection,
diff --git a/tests/components/mill/test_init.py b/tests/components/mill/test_init.py
index 8425c980f80..21201e955d7 100644
--- a/tests/components/mill/test_init.py
+++ b/tests/components/mill/test_init.py
@@ -1,5 +1,6 @@
 """Tests for Mill init."""
 
+import asyncio
 from unittest.mock import patch
 
 from homeassistant.components import mill
@@ -45,6 +46,22 @@ async def test_setup_with_cloud_config_fails(hass: HomeAssistant) -> None:
     assert entry.state is ConfigEntryState.SETUP_RETRY
 
 
+async def test_setup_with_cloud_config_times_out(hass: HomeAssistant) -> None:
+    """Test setup of cloud config will retry if timed out."""
+    entry = MockConfigEntry(
+        domain=mill.DOMAIN,
+        data={
+            mill.CONF_USERNAME: "user",
+            mill.CONF_PASSWORD: "pswd",
+            mill.CONNECTION_TYPE: mill.CLOUD,
+        },
+    )
+    entry.add_to_hass(hass)
+    with patch("mill.Mill.connect", side_effect=asyncio.TimeoutError):
+        await hass.config_entries.async_setup(entry.entry_id)
+    assert entry.state is ConfigEntryState.SETUP_RETRY
+
+
 async def test_setup_with_old_cloud_config(hass: HomeAssistant) -> None:
     """Test setup of old cloud config."""
     entry = MockConfigEntry(