Docker Compose MySQL 8 SequelizeJS ER_NOT_SUPPORTED_AUTH_MODE - mysql

Question

I don't know how unique my problem is but I see similar issues throughout the web but I have the scenario that doesn't match any of the problems I've seen.
I have a pretty standard Express app that uses SequelizeJS and MySQL 8. Sequlize has migration which I run using entrypoint.sh that runs sequelize migration command.
# Run migrations
npx sequelize-cli db:migrate
# Preload initial data
npx sequelize-cli db:seed:all
When I run docker compose command the project builds without any issues and sequelize migration and seeds runs. Database connection from sequelize command line works perfectly!
But when I load my homepage the SQL query from the application throws error. The error itself is quite common
{
code: 'ER_NOT_SUPPORTED_AUTH_MODE',
errno: 1251,
sqlMessage: 'Client does not support authentication protocol requested by server; consider upgrading MySQL client',
sqlState: '08004',
fatal: true
}
I have seen this error while mysql 8 and the package mysql used together with sequlizejs. The common solution is to use mysql2 which I am using in my project. I've also tried to run command --default-authentication-plugin=mysql_native_password inside mysql container which didn't help.
Docker Compose
version: '3.9'
services:
linkfy-dashboard:
container_name: linkfy-dashboard
restart: always
depends_on:
- linkfy-mysql
build:
context: .
dockerfile: Dockerfile.dev
ports:
- '10200:3000'
environment:
APP_NAME: Linkfy
DB_HOST: linkfy-mysql
DB_USER: linkfy
DB_PASS: password
DB_NAME: linkfy
COOKIE_SECRET: secret
NONCE_SECRET: secret
COOKIE_SECURE: 'false'
volumes:
- /app/node_modules
- .:/app
networks:
- linkfy
linkfy-mysql:
container_name: linkfy-mysql
command: --default-authentication-plugin=mysql_native_password
restart: always
image: mysql:8
environment:
MYSQL_ROOT_PASSWORD: password
MYSQL_DATABASE: linkfy
MYSQL_USER: linkfy
MYSQL_PASSWORD: password
volumes:
- database:/var/lib/mysql
networks:
- linkfy
adminer:
image: adminer
restart: always
ports:
- 10210:8080
networks:
- linkfy
networks:
linkfy:
name: linkfy
volumes:
database:
Dockerfile
FROM node:14.17-alpine
# source directory
WORKDIR /app
# global dependancy
RUN yarn global add sequelize-cli nodemon
# dependency file (package.json and package-lock.json)
COPY package.json .
RUN apk add --update python2 make g++ && rm -rf /var/cache/apk/*
RUN yarn install
# copy the sources
COPY . .
# listener
EXPOSE 3000
ENTRYPOINT ["./entrypoint.sh"]
# command to run
CMD [ "npm", "run", "dev" ]
I need some direction how to troubleshoot this.