diff --git a/runtime/runtime.go b/runtime/runtime.go
index c955043cf68..899ea74a9c9 100644
--- a/runtime/runtime.go
+++ b/runtime/runtime.go
@@ -540,13 +540,6 @@ func (rt *Runtime) Serve(ctx context.Context) error {
 			rt.logger.WithFields(map[string]interface{}{"err": err}).Error("Failed to start OpenTelemetry trace exporter.")
 			return err
 		}
-
-		defer func() {
-			err := rt.traceExporter.Shutdown(ctx)
-			if err != nil {
-				rt.logger.WithFields(map[string]interface{}{"err": err}).Error("Failed to shutdown OpenTelemetry trace exporter gracefully.")
-			}
-		}()
 	}
 
 	rt.server = server.New().
@@ -863,6 +856,13 @@ func (rt *Runtime) gracefulServerShutdown(s *server.Server) error {
 		return err
 	}
 	rt.logger.Info("Server shutdown.")
+
+	if rt.traceExporter != nil {
+		err = rt.traceExporter.Shutdown(ctx)
+		if err != nil {
+			rt.logger.WithFields(map[string]interface{}{"err": err}).Error("Failed to shutdown OpenTelemetry trace exporter gracefully.")
+		}
+	}
 	return nil
 }
 
diff --git a/runtime/runtime_test.go b/runtime/runtime_test.go
index 6c2179a3644..c273cc3b529 100644
--- a/runtime/runtime_test.go
+++ b/runtime/runtime_test.go
@@ -19,6 +19,11 @@ import (
 	"testing"
 	"time"
 
+	"github.com/open-policy-agent/opa/tracing"
+	"go.opentelemetry.io/contrib/instrumentation/net/http/otelhttp"
+	"go.opentelemetry.io/otel/sdk/trace"
+	"go.opentelemetry.io/otel/sdk/trace/tracetest"
+
 	"github.com/open-policy-agent/opa/internal/file/archive"
 	"github.com/open-policy-agent/opa/loader"
 
@@ -1235,6 +1240,49 @@ func TestServerInitializedWithBundleRegoVersion(t *testing.T) {
 	}
 }
 
+func TestGracefulTracerShutdown(t *testing.T) {
+	ctx, cancel := context.WithTimeout(context.Background(), 2*time.Millisecond)
+	defer cancel() // NOTE(sr): The timeout will have been reached by the time `done` is closed.
+
+	logger := logging.New()
+	stdout := bytes.NewBuffer(nil)
+	logger.SetOutput(stdout)
+	logger.SetLevel(logging.Warn)
+
+	spanExp := tracetest.NewInMemoryExporter()
+	options := tracing.NewOptions(
+		otelhttp.WithTracerProvider(trace.NewTracerProvider(trace.WithSpanProcessor(trace.NewSimpleSpanProcessor(spanExp)))),
+	)
+
+	params := NewParams()
+	params.Addrs = &[]string{"localhost:0"}
+	params.GracefulShutdownPeriod = 1
+	params.Logger = logger
+
+	params.DistributedTracingOpts = options
+
+	rt, err := NewRuntime(ctx, params)
+	if err != nil {
+		t.Fatalf("Unexpected error %v", err)
+	}
+
+	if rt.traceExporter == nil {
+		t.Fatal("traceExporter should not be nil")
+	}
+
+	done := make(chan struct{})
+	go func() {
+		rt.StartServer(ctx)
+		close(done)
+	}()
+	<-done
+
+	expected := "Failed to shutdown OpenTelemetry trace exporter gracefully."
+	if strings.Contains(stdout.String(), expected) {
+		t.Fatalf("Expected no output containing: \"%v\"", expected)
+	}
+}
+
 func TestUrlPathToConfigOverride(t *testing.T) {
 	params := NewParams()
 	params.Paths = []string{"https://www.example.com/bundles/bundle.tar.gz"}