diff --git a/CHANGELOG.md b/CHANGELOG.md
index 74f6647a5756..995f0e2e893d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -30,6 +30,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Project page requests took a long time and did many DB queries (<https://github.com/openvinotoolkit/cvat/pull/3223>)
 - Fixed Python 3.6 support (<https://github.com/openvinotoolkit/cvat/pull/3258>)
 - Incorrect attribute import in tracks (<https://github.com/openvinotoolkit/cvat/pull/3229>)
+- Fix CLI create an infinite loop if git repository responds with failure (<https://github.com/openvinotoolkit/cvat/pull/3267>)
 
 ### Security
 
diff --git a/utils/cli/core/core.py b/utils/cli/core/core.py
index 5f126a043745..31c12e2736c9 100644
--- a/utils/cli/core/core.py
+++ b/utils/cli/core/core.py
@@ -124,14 +124,16 @@ def tasks_create(self, name, labels, overlap, segment_size, bug, resource_type,
             check_url = self.api.git_check(rq_id)
             response = self.session.get(check_url)
             response_json = response.json()
-            log.info('''Awaiting dataset repository for task. Status: {}'''.format(
-                    response_json['status']))
             while response_json['status'] != 'finished':
+                log.info('''Awaiting a dataset repository to be created for the task. Response status: {}'''.format(
+                    response_json['status']))
                 sleep(git_completion_verification_period)
                 response = self.session.get(check_url)
                 response_json = response.json()
-                if response_json['status'] == 'Failed':
-                    log.error(f'Dataset repository creation request for task {task_id} failed.')
+                if response_json['status'] == 'failed' or response_json['status'] == 'unknown':
+                    log.error(f'Dataset repository creation request for task {task_id} failed'
+                              f'with status {response_json["status"]}.')
+                    break
 
             log.info(f"Dataset repository creation completed with status: {response_json['status']}.")