diff --git a/homeassistant/components/tractive/device_tracker.py b/homeassistant/components/tractive/device_tracker.py
index 73be7216a2f2b..bd1380ade4c4f 100644
--- a/homeassistant/components/tractive/device_tracker.py
+++ b/homeassistant/components/tractive/device_tracker.py
@@ -55,11 +55,9 @@ def __init__(self, client: TractiveClient, item: Trackables) -> None:
 
     @property
     def source_type(self) -> SourceType:
-        """Return the source type, eg gps or router, of the device."""
+        """Return the source type of the device."""
         if self._source_type == "PHONE":
             return SourceType.BLUETOOTH
-        if self._source_type == "KNOWN_WIFI":
-            return SourceType.ROUTER
         return SourceType.GPS
 
     @property
diff --git a/tests/components/tractive/test_device_tracker.py b/tests/components/tractive/test_device_tracker.py
index ff78173ef7b7e..ff9c7ca88ef7c 100644
--- a/tests/components/tractive/test_device_tracker.py
+++ b/tests/components/tractive/test_device_tracker.py
@@ -59,3 +59,31 @@ async def test_source_type_phone(
         hass.states.get("device_tracker.test_pet_tracker").attributes["source_type"]
         is SourceType.BLUETOOTH
     )
+
+
+async def test_source_type_gps(
+    hass: HomeAssistant,
+    mock_tractive_client: AsyncMock,
+    mock_config_entry: MockConfigEntry,
+) -> None:
+    """Test if the source type is GPS when the location sensor is KNOWN WIFI."""
+    await init_integration(hass, mock_config_entry)
+
+    mock_tractive_client.send_position_event(
+        mock_config_entry,
+        {
+            "tracker_id": "device_id_123",
+            "position": {
+                "latlong": [22.333, 44.555],
+                "accuracy": 99,
+                "sensor_used": "KNOWN_WIFI",
+            },
+        },
+    )
+    mock_tractive_client.send_hardware_event(mock_config_entry)
+    await hass.async_block_till_done()
+
+    assert (
+        hass.states.get("device_tracker.test_pet_tracker").attributes["source_type"]
+        is SourceType.GPS
+    )