diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7acd513d..8955ac4f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,40 @@
 # Changelog
 
+## 0.32.0
+
+**Release date:** 2023-03-31
+
+This release updates the dependencies to their latest versions.
+
+In addition, the controller now supports horizontal scaling using sharding based on a label selector.
+
+### Highlights
+
+#### API Changes
+
+This prerelease is only compatible with `GitRepository` API version `v1`, first shipped with 
+[source-controller](https://github.com/fluxcd/source-controller) v1.0.0-rc.1.
+
+#### Sharding
+
+Starting with this release, the controller can be configured with `--watch-label-selector`, after 
+which only objects with this label will be reconciled by the controller.
+
+This allows for horizontal scaling, where image-automation-controller can be deployed multiple times
+with a unique label selector which is used as the sharding key.
+
+### Full Changelog
+
+Improvements:
+- move `controllers` to `internal/controllers`
+  [#500](https://github.com/fluxcd/image-automation-controller/pull/500)
+- Add reconciler sharding capability based on label selector
+  [#504](https://github.com/fluxcd/image-automation-controller/pull/504)
+- Update dependencies and GitRepository API to v1
+  [#505](https://github.com/fluxcd/image-automation-controller/pull/505)
+- bump google.golang.org/protobuf from 1.29.0 to 1.29.1
+  [#506](https://github.com/fluxcd/image-automation-controller/pull/506)
+
 ## 0.31.0
 
 **Release date:** 2023-03-08
diff --git a/config/manager/kustomization.yaml b/config/manager/kustomization.yaml
index e26fc3aa..9584af4a 100644
--- a/config/manager/kustomization.yaml
+++ b/config/manager/kustomization.yaml
@@ -5,4 +5,4 @@ resources:
 images:
 - name: fluxcd/image-automation-controller
   newName: fluxcd/image-automation-controller
-  newTag: v0.31.0
+  newTag: v0.32.0
diff --git a/go.mod b/go.mod
index b64bfb7d..73f15b02 100644
--- a/go.mod
+++ b/go.mod
@@ -10,7 +10,7 @@ require (
 	github.com/ProtonMail/go-crypto v0.0.0-20230331115716-d34776aa93ec
 	github.com/cyphar/filepath-securejoin v0.2.3
 	github.com/fluxcd/go-git/v5 v5.0.0-20221219190809-2e5c9d01cfc4
-	github.com/fluxcd/image-automation-controller/api v0.31.0
+	github.com/fluxcd/image-automation-controller/api v0.32.0
 	github.com/fluxcd/image-reflector-controller/api v0.27.0
 	github.com/fluxcd/pkg/apis/acl v0.1.0
 	github.com/fluxcd/pkg/apis/event v0.4.1