diff --git a/app/models/merge_request.rb b/app/models/merge_request.rb
index ca3a1806ee8b1b43673a44faf4b7ef1fe8c3a1ef..7a817eedec2447354ef598ffa45aff384b12cfab 100644
--- a/app/models/merge_request.rb
+++ b/app/models/merge_request.rb
@@ -605,6 +605,8 @@ class MergeRequest < ActiveRecord::Base
       self.merge_requests_closing_issues.delete_all
 
       closes_issues(current_user).each do |issue|
+        next if issue.is_a?(ExternalIssue)
+
         self.merge_requests_closing_issues.create!(issue: issue)
       end
     end
diff --git a/changelogs/unreleased/issue_36820.yml b/changelogs/unreleased/issue_36820.yml
new file mode 100644
index 0000000000000000000000000000000000000000..ec5fb6ac079324b0aa7f5319354cc46b12ac68b1
--- /dev/null
+++ b/changelogs/unreleased/issue_36820.yml
@@ -0,0 +1,5 @@
+---
+title: Remove closing external issues by reference error
+merge_request:
+author:
+type: fixed
diff --git a/spec/models/merge_request_spec.rb b/spec/models/merge_request_spec.rb
index 09f3b97ec587a01905d9024d5eb5f624fed8d0b8..f5d079c27c4044398df1683140ced04ab6cd632c 100644
--- a/spec/models/merge_request_spec.rb
+++ b/spec/models/merge_request_spec.rb
@@ -159,6 +159,7 @@ describe MergeRequest do
       before do
         subject.project.has_external_issue_tracker = true
         subject.project.save!
+        create(:jira_service, project: subject.project)
       end
 
       it 'does not cache issues from external trackers' do
@@ -166,6 +167,7 @@ describe MergeRequest do
         commit = double('commit1', safe_message: "Fixes #{issue.to_reference}")
         allow(subject).to receive(:commits).and_return([commit])
 
+        expect { subject.cache_merge_request_closes_issues!(subject.author) }.not_to raise_error
         expect { subject.cache_merge_request_closes_issues!(subject.author) }.not_to change(subject.merge_requests_closing_issues, :count)
       end