diff --git a/repos/os/run/init.run b/repos/os/run/init.run
index 87cc1fd6a47..a7afcb35a43 100644
--- a/repos/os/run/init.run
+++ b/repos/os/run/init.run
@@ -91,6 +91,78 @@ append config {
 			</expect_init_state>
 
 
+			<message string="exit state handling"/>
+
+			<init_config version="exiting child">
+				<report ids="yes"/>
+				<parent-provides>
+					<service name="ROM"/>
+					<service name="CPU"/>
+					<service name="PD"/>
+					<service name="LOG"/>
+				</parent-provides>
+				<default caps="100"/>
+				<start name="exiting">
+					<binary name="dummy"/>
+					<resource name="RAM" quantum="2M"/>
+					<config>
+						<log string="started"/>
+						<exit/>
+					</config>
+					<route> <any-service> <parent/> </any-service> </route>
+				</start>
+			</init_config>
+			<expect_log string="[init -> exiting] started"/>
+			<sleep ms="200"/>
+			<expect_init_state>
+				<attribute name="version" value="exiting child"/>
+				<node name="child">
+					<attribute name="name"   value="exiting"/>
+					<attribute name="binary" value="dummy"/>
+					<attribute name="id"     value="2"/>
+					<attribute name="exited" value="0"/>
+				</node>
+			</expect_init_state>
+			<!-- Trigger reconfiguration without changing anything about
+			     the exited application.
+			     The exited application must remain in its 'exited' state. -->
+			<init_config version="exiting child 2">
+				<report ids="yes"/>
+				<parent-provides>
+					<service name="ROM"/>
+					<service name="CPU"/>
+					<service name="PD"/>
+					<service name="LOG"/>
+				</parent-provides>
+				<default caps="100"/>
+				<start name="exiting">
+					<binary name="dummy"/>
+					<resource name="RAM" quantum="2M"/>
+					<config>
+						<log string="started"/>
+						<exit/>
+					</config>
+					<route> <any-service> <parent/> </any-service> </route>
+				</start>
+				<start name="unrelated">
+					<binary name="dummy"/>
+					<resource name="RAM" quantum="2M"/>
+					<config/>
+					<route> <any-service> <parent/> </any-service> </route>
+				</start>
+			</init_config>
+			<sleep ms="200"/>
+			<expect_init_state>
+				<attribute name="version" value="exiting child 2"/>
+				<node name="child">
+					<attribute name="name"   value="exiting"/>
+					<attribute name="binary" value="dummy"/>
+					<attribute name="id"     value="2"/>
+					<attribute name="exited" value="0"/>
+				</node>
+			</expect_init_state>
+
+
 			<message string="routing to custom log service"/>
 
 			<!-- We let the client manually create a LOG session in addition
@@ -143,11 +215,11 @@ append config {
 			<expect_init_state>
 				<node name="child">
 					<attribute name="name" value="server"/>
-					<attribute name="id"   value="2"/>
+					<attribute name="id"   value="4"/>
 				</node>
 				<node name="child">
 					<attribute name="name" value="client"/>
-					<attribute name="id"   value="4"/>
+					<attribute name="id"   value="6"/>
 				</node>
 			</expect_init_state>
 			<sleep ms="150"/>
@@ -203,11 +275,11 @@ append config {
 			<expect_init_state>
 				<node name="child">
 					<attribute name="name" value="server"/>
-					<attribute name="id"   value="2"/>
+					<attribute name="id"   value="4"/>
 				</node>
 				<node name="child">
 					<attribute name="name" value="client"/>
-					<attribute name="id"   value="6"/> <!-- client was restarted -->
+					<attribute name="id"   value="8"/> <!-- client was restarted -->
 				</node>
 			</expect_init_state>
 			<sleep ms="100"/>
@@ -1336,11 +1408,11 @@ append config {
 			<expect_init_state>
 				<node name="child">
 					<attribute name="name" value="server"/>
-					<attribute name="id"   value="23"/>
+					<attribute name="id"   value="25"/>
 				</node>
 				<node name="child">
 					<attribute name="name" value="client"/>
-					<attribute name="id"   value="24"/>
+					<attribute name="id"   value="26"/>
 				</node>
 			</expect_init_state>
 			<sleep ms="150"/>
@@ -1371,7 +1443,7 @@ append config {
 			<expect_init_state>
 				<node name="child">
 					<attribute name="name" value="client"/>
-					<attribute name="id"   value="25"/>
+					<attribute name="id"   value="27"/>
 				</node>
 			</expect_init_state>
 			<sleep ms="150"/>
diff --git a/repos/os/src/app/dummy/main.cc b/repos/os/src/app/dummy/main.cc
index 9df645753ec..a1d88fd318d 100644
--- a/repos/os/src/app/dummy/main.cc
+++ b/repos/os/src/app/dummy/main.cc
@@ -16,6 +16,7 @@
 #include <base/registry.h>
 #include <base/component.h>
 #include <base/attached_rom_dataspace.h>
+#include <base/sleep.h>
 #include <root/component.h>
 #include <timer_session/connection.h>
 #include <log_session/connection.h>
@@ -333,6 +334,11 @@ struct Dummy::Main
 
 			if (node.type() == "log")
 				log(node.attribute_value("string", String<50>()));
+
+			if (node.type() == "exit") {
+				_env.parent().exit(0);
+				sleep_forever();
+			}
 		});
 	}
 
diff --git a/repos/os/src/init/child.cc b/repos/os/src/init/child.cc
index 68417becbba..67b386a7abe 100644
--- a/repos/os/src/init/child.cc
+++ b/repos/os/src/init/child.cc
@@ -26,7 +26,7 @@ void Init::Child::destroy_services()
 Init::Child::Apply_config_result
 Init::Child::apply_config(Xml_node start_node)
 {
-	if (_state == STATE_ABANDONED)
+	if (_state == STATE_ABANDONED || _exited)
 		return NO_SIDE_EFFECTS;
 
 	/*