diff --git a/src/ast/mod.rs b/src/ast/mod.rs
index 366bf4d25..970486719 100644
--- a/src/ast/mod.rs
+++ b/src/ast/mod.rs
@@ -5528,6 +5528,8 @@ pub enum FunctionArgOperator {
     Assignment,
     /// function(arg1 : value1)
     Colon,
+    /// function(arg1 VALUE value1)
+    Value,
 }
 
 impl fmt::Display for FunctionArgOperator {
@@ -5537,6 +5539,7 @@ impl fmt::Display for FunctionArgOperator {
             FunctionArgOperator::RightArrow => f.write_str("=>"),
             FunctionArgOperator::Assignment => f.write_str(":="),
             FunctionArgOperator::Colon => f.write_str(":"),
+            FunctionArgOperator::Value => f.write_str("VALUE"),
         }
     }
 }
diff --git a/src/parser/mod.rs b/src/parser/mod.rs
index b7f5cb866..90c9a4ff5 100644
--- a/src/parser/mod.rs
+++ b/src/parser/mod.rs
@@ -11478,6 +11478,9 @@ impl<'a> Parser<'a> {
     }
 
     fn parse_function_named_arg_operator(&mut self) -> Result<FunctionArgOperator, ParserError> {
+        if self.parse_keyword(Keyword::VALUE) {
+            return Ok(FunctionArgOperator::Value);
+        }
         let tok = self.next_token();
         match tok.token {
             Token::RArrow if self.dialect.supports_named_fn_args_with_rarrow_operator() => {
diff --git a/tests/sqlparser_postgres.rs b/tests/sqlparser_postgres.rs
index 54f77b7be..f94e2f540 100644
--- a/tests/sqlparser_postgres.rs
+++ b/tests/sqlparser_postgres.rs
@@ -2824,6 +2824,19 @@ fn test_json() {
     );
 }
 
+#[test]
+fn test_fn_arg_with_value_operator() {
+    match pg().verified_expr("JSON_OBJECT('name' VALUE 'value')") {
+        Expr::Function(Function { args: FunctionArguments::List(FunctionArgumentList { args, .. }), .. }) => {
+            assert!(matches!(
+                &args[..],
+                &[FunctionArg::ExprNamed { operator: FunctionArgOperator::Value, .. }]
+            ), "Invalid function argument: {:?}", args);
+        }
+        other => panic!("Expected: JSON_OBJECT('name' VALUE 'value') to be parsed as a function, but got {other:?}"),
+    }
+}
+
 #[test]
 fn parse_json_table_is_not_reserved() {
     // JSON_TABLE is not a reserved keyword in PostgreSQL, even though it is in SQL:2023