Involved in the biosynthesis of 5-hydroxyectoine, called compatible solute, which helps organisms to survive extreme osmotic stress by acting as a highly soluble organic osmolyte. Catalyzes the 2-oxoglutarate-dependent selective hydroxylation of L-ectoine to yield (4S,5S)-5-hydroxyectoine. 2-oxoglutarate + L-ectoine + O2 = 5-hydroxyectoine + CO2 + succinate Binds 1 Fe(2+) ion. kcat is 2.8 sec(-1) for ectoin as substrate (at pH 8 and 32 degrees Celsius). Optimum pH is 8. Optimum temperature is 32 degrees Celsius (PubMed:24714029). Active from 5 to 47 degrees Celsius (PubMed:24714029). Homodimer. Belongs to the PhyH family. EctD subfamily.