diff --git a/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/internal/impl/UserSessionManagementServiceImpl.java b/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/internal/impl/UserSessionManagementServiceImpl.java
index 2969470a97c6..1dd9fee0259d 100644
--- a/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/internal/impl/UserSessionManagementServiceImpl.java
+++ b/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/internal/impl/UserSessionManagementServiceImpl.java
@@ -39,6 +39,7 @@
 import org.wso2.carbon.identity.application.authentication.framework.util.FrameworkUtils;
 import org.wso2.carbon.identity.application.authentication.framework.util.SessionMgtConstants;
 import org.wso2.carbon.identity.application.common.model.User;
+import org.wso2.carbon.identity.core.util.IdentityUtil;
 import org.wso2.carbon.user.api.UserStoreException;
 import org.wso2.carbon.user.core.service.RealmService;
 import org.wso2.carbon.user.api.UserStoreManager;
@@ -48,6 +49,11 @@
 import java.util.ArrayList;
 import java.util.List;
 
+import static org.wso2.carbon.identity.application.authentication.framework.util.FrameworkConstants.
+        CURRENT_SESSION_IDENTIFIER;
+import static org.wso2.carbon.identity.application.authentication.framework.util.FrameworkConstants.Config.
+        PRESERVE_LOGGED_IN_SESSION_AT_PASSWORD_UPDATE;
+
 /**
  * This a service class used to manage user sessions.
  */
@@ -176,8 +182,27 @@ public boolean terminateSessionsByUserId(String userId) throws SessionManagement
                     null);
         }
         List<String> sessionIdList = getSessionIdListByUserId(userId);
+
+        boolean isSessionPreservingAtPasswordUpdateEnabled =
+                Boolean.parseBoolean(IdentityUtil.getProperty(PRESERVE_LOGGED_IN_SESSION_AT_PASSWORD_UPDATE));
+        String currentSessionId = "";
+        boolean isSessionTerminationSkipped = false;
+        if (isSessionPreservingAtPasswordUpdateEnabled) {
+            if (IdentityUtil.threadLocalProperties.get().get(CURRENT_SESSION_IDENTIFIER) != null) {
+                currentSessionId = (String) IdentityUtil.threadLocalProperties.get().get(CURRENT_SESSION_IDENTIFIER);
+            }
+            // Remove current sessionId from the list so that its termination is bypassed.
+            if (sessionIdList.remove(currentSessionId)) {
+                isSessionTerminationSkipped = true;
+            }
+        }
+
         if (log.isDebugEnabled()) {
-            log.debug("Terminating all the active sessions of user: " + userId + ".");
+            if (isSessionTerminationSkipped) {
+                log.debug("Terminating the active sessions of user: " + userId + "except the current session.");
+            } else {
+                log.debug("Terminating all the active sessions of user: " + userId + ".");
+            }
         }
         terminateSessionsOfUser(sessionIdList);
         if (!sessionIdList.isEmpty()) {
diff --git a/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/util/FrameworkConstants.java b/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/util/FrameworkConstants.java
index 627a5545632a..569b60db0ba5 100644
--- a/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/util/FrameworkConstants.java
+++ b/components/authentication-framework/org.wso2.carbon.identity.application.authentication.framework/src/main/java/org/wso2/carbon/identity/application/authentication/framework/util/FrameworkConstants.java
@@ -133,6 +133,9 @@ public abstract class FrameworkConstants {
     public static final String FEDERATED_IDP_ROLE_CLAIM_VALUE_SEPARATOR =
             "FederatedIDPRoleClaimValueAttributeSeparator";
 
+    // Current session thread local identifier.
+    public static final String CURRENT_SESSION_IDENTIFIER = "currentSessionIdentifier";
+
     private FrameworkConstants() {
 
     }
@@ -231,6 +234,13 @@ public static class Config {
          */
         public static final String PUBLISH_ACTIVE_SESSION_COUNT = "Analytics.PublishActiveSessionCount";
 
+        /**
+         * Configuration to enable preserving user from being logged out at password update by skipping current
+         * session and token from being terminated.
+         */
+        public static final String PRESERVE_LOGGED_IN_SESSION_AT_PASSWORD_UPDATE =
+                "PasswordUpdate.PreserveLoggedInSession";
+
         private Config() {
         }
 
diff --git a/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/identity.xml.j2 b/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/identity.xml.j2
index 42a027bfa55a..6d4b755db029 100644
--- a/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/identity.xml.j2
+++ b/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/identity.xml.j2
@@ -2370,4 +2370,9 @@
         {% endfor %}
     </ReverseProxyConfig>
     {% endif %}
+
+    <!-- Configuration for preserving the current session and token when updating the password. -->
+    <PasswordUpdate>
+        <PreserveLoggedInSession>{{identity_mgt.password_update.preserve_logged_in_session}}</PreserveLoggedInSession>
+    </PasswordUpdate>
 </Server>
diff --git a/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.default.json b/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.default.json
index ff1183bee3f5..4f553be210d9 100644
--- a/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.default.json
+++ b/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.default.json
@@ -297,6 +297,8 @@
   "identity_mgt.password_reset_by_admin.enable_emailed_otp_based_reset": false,
   "identity_mgt.password_reset_by_admin.enable_offline_otp_based_reset": false,
 
+  "identity_mgt.password_update.preserve_logged_in_session": false,
+
   "identity_mgt.username_recovery.email.enable_username_recovery": false,
   "identity_mgt.username_recovery.email.enable_recaptcha": false,
 
diff --git a/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.key-mappings.json b/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.key-mappings.json
index 194fe9f0b2bf..abdf8f976b2e 100644
--- a/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.key-mappings.json
+++ b/features/identity-core/org.wso2.carbon.identity.core.server.feature/resources/org.wso2.carbon.identity.core.server.feature.key-mappings.json
@@ -3,5 +3,6 @@
   "scim.authentication_handler.oauth.properties.priority": "scim.authentication_handler.oauth.properties.Priority",
   "scim.authentication_handler.oauth.properties.authorization_server": "scim.authentication_handler.oauth.properties.AuthorizationServer",
   "scim.authentication_handler.oauth.properties.username": "scim.authentication_handler.oauth.properties.UserName",
-  "scim.authentication_handler.oauth.properties.password": "scim.authentication_handler.oauth.properties.Password"
+  "scim.authentication_handler.oauth.properties.password": "scim.authentication_handler.oauth.properties.Password",
+  "password_update.preserve_logged_in_session": "identity_mgt.password_update.preserve_logged_in_session"
 }