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. Stimulated by FeSO(4) up to a concentration of 1 mM, whereas higher concentrations inhibited the ectoine hydroxylase. Also inhibited by ascorbate. kcat is 7.7 sec(-1) for ectoin as substrate (at pH 7.5 and 32 degrees Celsius). Optimum pH is 7.5. Optimum temperature is 32 degrees Celsius (PubMed:17636255, PubMed:24714029). Active from 5 to 50 degrees Celsius (PubMed:24714029). Homodimer. Induced under high salinity stress and stationary growth phase. Increased ectoine biosynthesis occurs as soon as the cells start to grow in high osmolality medium, but there is no immediate 5-hydroxyectoine production. Appreciable amounts of 5-hydroxyectoine are made only when cell growth slowed and the culture enters in stationary growth phase. Belongs to the PhyH family. EctD subfamily.