diff --git a/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingService.ts b/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingService.ts
index a6c7d4a1b0ceb..76273c4c91b8a 100644
--- a/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingService.ts
+++ b/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingService.ts
@@ -134,8 +134,8 @@ export class ChatEditingService extends Disposable implements IChatEditingServic
 			return this._currentSessionObs.read(r)?.canRedo.read(r) || false;
 		}));
 		this._register(this._chatService.onDidDisposeSession((e) => {
-			this._applyingChatEditsFailedContextKey.set(false);
 			if (e.reason === 'cleared' && this._currentSessionObs.get()?.chatSessionId === e.sessionId) {
+				this._applyingChatEditsFailedContextKey.set(false);
 				void this._currentSessionObs.get()?.stop();
 			}
 		}));