diff --git a/litellm/router.py b/litellm/router.py
index 9eff5c069b..8ad612a103 100644
--- a/litellm/router.py
+++ b/litellm/router.py
@@ -4915,22 +4915,25 @@ class Router:
         - hash
         - use hash as id
         """
-        concat_str = model_group
+        # Optimized: Use list and join instead of string concatenation in loop
+        # This avoids creating many temporary string objects (O(n) vs O(n²) complexity)
+        parts = [model_group]
         for k, v in litellm_params.items():
             if isinstance(k, str):
-                concat_str += k
+                parts.append(k)
             elif isinstance(k, dict):
-                concat_str += json.dumps(k)
+                parts.append(json.dumps(k))
             else:
-                concat_str += str(k)
+                parts.append(str(k))
 
             if isinstance(v, str):
-                concat_str += v
+                parts.append(v)
             elif isinstance(v, dict):
-                concat_str += json.dumps(v)
+                parts.append(json.dumps(v))
             else:
-                concat_str += str(v)
+                parts.append(str(v))
 
+        concat_str = "".join(parts)
         hash_object = hashlib.sha256(concat_str.encode())
 
         return hash_object.hexdigest()
diff --git a/tests/router_unit_tests/test_router_helper_utils.py b/tests/router_unit_tests/test_router_helper_utils.py
index a31c4d8210..c2339d9eec 100644
--- a/tests/router_unit_tests/test_router_helper_utils.py
+++ b/tests/router_unit_tests/test_router_helper_utils.py
@@ -1411,7 +1411,8 @@ def test_generate_model_id_with_deployment_model_name(model_list):
             "Expected TypeError when model_group is None - this confirms our fix is needed"
         )
     except TypeError as e:
-        assert "unsupported operand type(s) for +=" in str(e)
+        # After optimization, error message changed but still fails appropriately on None
+        assert "unsupported operand type(s) for +=" in str(e) or "expected str instance, NoneType found" in str(e)
         print(f"✓ Correctly failed with None model_group (as expected): {e}")
     except Exception as e:
         pytest.fail(f"Unexpected error with None model_group: {e}")