diff --git a/changelogs/unreleased/instrument-in-karma.yml b/changelogs/unreleased/instrument-in-karma.yml
new file mode 100644
index 0000000000000000000000000000000000000000..cfabf2569fe7e85bf128b0da9bfd05b914cd0e3c
--- /dev/null
+++ b/changelogs/unreleased/instrument-in-karma.yml
@@ -0,0 +1,4 @@
+---
+title: Move babel config for instanbul to karma config
+merge_request: 9286
+author: winniehell
diff --git a/config/karma.config.js b/config/karma.config.js
index a1fbeab1f469185c09e09044d623bd46576dd26c..a16e2d2077f6cd74825bde9df9140246621baf3f 100644
--- a/config/karma.config.js
+++ b/config/karma.config.js
@@ -2,6 +2,17 @@ var path = require('path');
 var webpackConfig = require('./webpack.config.js');
 var ROOT_PATH = path.resolve(__dirname, '..');
 
+// add coverage instrumentation to babel config
+if (webpackConfig && webpackConfig.module && webpackConfig.module.rules) {
+  var babelConfig = webpackConfig.module.rules.find(function (rule) {
+    return rule.loader === 'babel-loader';
+  });
+
+  babelConfig.options = babelConfig.options || {};
+  babelConfig.options.plugins = babelConfig.options.plugins || [];
+  babelConfig.options.plugins.push('istanbul');
+}
+
 // Karma configuration
 module.exports = function(config) {
   config.set({
diff --git a/config/webpack.config.js b/config/webpack.config.js
index e63775e43ce770766f59ad7513e5f3fb467923c1..ac117522005c193fc88d38c3a2a3a2abd7871550 100644
--- a/config/webpack.config.js
+++ b/config/webpack.config.js
@@ -54,7 +54,6 @@ var config = {
         exclude: /(node_modules|vendor\/assets)/,
         loader: 'babel-loader',
         options: {
-          plugins: IS_PRODUCTION ? [] : ['istanbul'],
           presets: [
             ["es2015", {"modules": false}],
             'stage-2'