diff --git a/installer/data/mysql/atomicupdate/bug_3492.pl b/installer/data/mysql/atomicupdate/bug_3492.pl
new file mode 100644
index 0000000000..57f3ee9a02
--- /dev/null
+++ b/installer/data/mysql/atomicupdate/bug_3492.pl
@@ -0,0 +1,79 @@
+use Modern::Perl;
+use Koha::Installer::Output qw(say_warning say_failure say_success say_info);
+
+return {
+    bug_number  => "3492",
+    description => "Migrate reservefee from categories to circulation rules and remove deprecated column",
+    up          => sub {
+        my ($args) = @_;
+        my ( $dbh, $out ) = @$args{qw(dbh out)};
+
+        # Check if the reservefee column still exists
+        my $column_exists = $dbh->selectrow_array(
+            q{
+            SELECT COUNT(*)
+            FROM INFORMATION_SCHEMA.COLUMNS
+            WHERE TABLE_SCHEMA = DATABASE()
+            AND TABLE_NAME = 'categories'
+            AND COLUMN_NAME = 'reservefee'
+        }
+        );
+
+        if ($column_exists) {
+
+            # Check if we have any existing reservefees to migrate
+            my $existing_fees = $dbh->selectall_arrayref(
+                q{
+                SELECT categorycode, reservefee
+                FROM categories
+                WHERE reservefee IS NOT NULL AND reservefee > 0
+            }, { Slice => {} }
+            );
+
+            if (@$existing_fees) {
+                say_info(
+                    $out,
+                    "Migrating "
+                        . scalar(@$existing_fees)
+                        . " existing hold fees from categories to circulation rules..."
+                );
+
+                # Migrate existing reservefee values to circulation_rules
+                my $insert_rule = $dbh->prepare(
+                    q{
+                    INSERT IGNORE INTO circulation_rules
+                    (branchcode, categorycode, itemtype, rule_name, rule_value)
+                    VALUES (NULL, ?, NULL, 'hold_fee', ?)
+                }
+                );
+
+                my $migrated = 0;
+                for my $fee (@$existing_fees) {
+                    $insert_rule->execute( $fee->{categorycode}, $fee->{reservefee} );
+                    if ( $insert_rule->rows ) {
+                        $migrated++;
+                    }
+                }
+
+                say_success( $out, "Successfully migrated $migrated hold fee rules to circulation_rules table." );
+
+                if ( $migrated < @$existing_fees ) {
+                    say_warning( $out, "Some rules may have already existed and were not overwritten." );
+                }
+            } else {
+                say_info( $out, "No existing hold fees found in categories table to migrate." );
+            }
+
+            # Remove the deprecated reservefee column
+            say_info( $out, "Removing deprecated reservefee column from categories table..." );
+            $dbh->do(q{ALTER TABLE categories DROP COLUMN reservefee});
+            say_success( $out, "Successfully removed reservefee column from categories table." );
+
+        } else {
+            say_info( $out, "The reservefee column has already been removed from the categories table." );
+        }
+
+        say_info( $out, "Hold fees can now be configured in Administration > Circulation and fine rules." );
+        say_success( $out, "Migration complete: Hold fees are now fully managed through circulation rules." );
+    },
+};
diff --git a/installer/data/mysql/kohastructure.sql b/installer/data/mysql/kohastructure.sql
index 733015e6e2..afbf3f5885 100644
--- a/installer/data/mysql/kohastructure.sql
+++ b/installer/data/mysql/kohastructure.sql
@@ -1810,7 +1810,6 @@ CREATE TABLE `categories` (
   `dateofbirthrequired` tinyint(1) DEFAULT NULL COMMENT 'the minimum age required for the patron category',
   `enrolmentfee` decimal(28,6) DEFAULT NULL COMMENT 'enrollment fee for the patron',
   `overduenoticerequired` tinyint(1) DEFAULT NULL COMMENT 'are overdue notices sent to this patron category (1 for yes, 0 for no)',
-  `reservefee` decimal(28,6) DEFAULT NULL COMMENT 'cost to place holds',
   `hidelostitems` tinyint(1) NOT NULL DEFAULT 0 COMMENT 'are lost items shown to this category (1 for yes, 0 for no)',
   `category_type` varchar(1) NOT NULL DEFAULT 'A' COMMENT 'type of Koha patron (Adult, Child, Professional, Organizational, Statistical, Staff)',
   `BlockExpiredPatronOpacActions` varchar(128) NOT NULL DEFAULT 'follow_syspref_BlockExpiredPatronOpacActions' COMMENT 'specific actions expired patrons of this category are blocked from performing or if the BlockExpiredPatronOpacActions system preference is to be followed',