diff --git a/apps/api/pyproject.toml b/apps/api/pyproject.toml
index d5b71d9..3d49f67 100644
--- a/apps/api/pyproject.toml
+++ b/apps/api/pyproject.toml
@@ -8,7 +8,6 @@ dependencies = [
     "uvicorn[standard]>=0.24.0",
     "sqlalchemy>=2.0.0",
     "asyncpg>=0.29.0",
-    "psycopg2-binary>=2.9.0",
     "alembic>=1.12.0",
     "pydantic>=2.5.0",
     "pydantic-settings>=2.1.0",
diff --git a/apps/api/src/database.py b/apps/api/src/database.py
index 1bc93d2..7f9b5e3 100644
--- a/apps/api/src/database.py
+++ b/apps/api/src/database.py
@@ -1,10 +1,7 @@
 import asyncio
 import logging
+import subprocess
 
-from alembic import command
-from alembic.config import Config
-from alembic.runtime.migration import MigrationContext
-from sqlalchemy import create_engine
 from sqlalchemy.ext.asyncio import AsyncSession, async_sessionmaker, create_async_engine
 from sqlalchemy.pool import NullPool
 
@@ -29,30 +26,20 @@ engine = create_async_engine(
 SessionLocal = async_sessionmaker(engine, class_=AsyncSession, expire_on_commit=False)
 
 
-def _get_sync_database_url() -> str:
-    """Convert async database URL to sync URL for alembic."""
-    sync_url = database_url
-    # Replace asyncpg with psycopg2 for sync operations
-    if "+asyncpg" in sync_url:
-        sync_url = sync_url.replace("+asyncpg", "+psycopg2")
-    return sync_url
-
-
 async def init_database(
     max_retries: int = 5,
     retry_delay: float = 2.0,
-    alembic_ini_path: str = "alembic.ini",
 ) -> bool:
     """Initialize the database by running pending migrations.
 
-    Retries the connection with exponential backoff to handle
-    database startup latency in containerized environments.
+    Uses subprocess to run 'alembic upgrade head' to avoid
+    async/sync context manager issues with SQLAlchemy 2.0.
 
     Returns True if migrations succeeded, False otherwise.
     """
     for attempt in range(1, max_retries + 1):
         try:
-            # Test basic connectivity (async)
+            # Test basic connectivity
             from sqlalchemy import text
             test_conn = await engine.connect()
             try:
@@ -62,36 +49,30 @@ async def init_database(
 
             logger.info("Database connection established.")
 
-            # Use sync engine for alembic operations
-            sync_url = _get_sync_database_url()
-            sync_engine = create_engine(sync_url, poolclass=NullPool)
+            # Run migrations via subprocess
+            logger.info("Running database migrations...")
+            result = await asyncio.get_event_loop().run_in_executor(
+                None,
+                lambda: subprocess.run(
+                    ["alembic", "upgrade", "head"],
+                    capture_output=True,
+                    text=True,
+                    cwd="/app",
+                ),
+            )
 
-            try:
-                # Check if migrations are already complete
-                with sync_engine.connect() as sync_conn:
-                    context = MigrationContext.configure(sync_conn)
-                    current_rev = context.get_current_revision()
-                    
-                    alembic_cfg = Config(alembic_ini_path)
-                    script = command.ScriptDirectory.from_config(alembic_cfg)
-                    head_rev = script.get_current_head()
-                    
-                    if current_rev == head_rev:
-                        logger.info("Database is already at the latest migration (%s).", head_rev)
-                        return True
-                    
-                    logger.info(
-                        "Current revision: %s, Head revision: %s. Running migrations...",
-                        current_rev,
-                        head_rev,
-                    )
-                    
-                    # Run alembic migrations
-                    command.upgrade(alembic_cfg, "head")
-                    logger.info("Database migrations completed successfully.")
-                    return True
-            finally:
-                sync_engine.dispose()
+            if result.returncode == 0:
+                logger.info("Database migrations completed successfully.")
+                logger.debug("Alembic output: %s", result.stdout)
+                return True
+            else:
+                logger.error("Migration failed: %s", result.stderr)
+                if attempt < max_retries:
+                    wait = retry_delay * (2 ** (attempt - 1))
+                    logger.info("Retrying in %.1f seconds...", wait)
+                    await asyncio.sleep(wait)
+                else:
+                    return False
 
         except Exception as exc:
             error_msg = str(exc).lower()