diff --git a/public/app/core/components/NestedFolderPicker/NestedFolderPicker.test.tsx b/public/app/core/components/NestedFolderPicker/NestedFolderPicker.test.tsx
index 3c24d81440b..f5ed2595d83 100644
--- a/public/app/core/components/NestedFolderPicker/NestedFolderPicker.test.tsx
+++ b/public/app/core/components/NestedFolderPicker/NestedFolderPicker.test.tsx
@@ -113,6 +113,13 @@ describe('NestedFolderPicker', () => {
     expect(mockOnChange).toHaveBeenCalledWith(folderA.item.uid, folderA.item.title);
   });
 
+  it('can clear a selection if clearable is specified', async () => {
+    render(<NestedFolderPicker clearable value={folderA.item.uid} onChange={mockOnChange} />);
+
+    await userEvent.click(await screen.findByRole('button', { name: 'Clear selection' }));
+    expect(mockOnChange).toHaveBeenCalledWith(undefined, undefined);
+  });
+
   it('can select a folder from the picker with the keyboard', async () => {
     render(<NestedFolderPicker onChange={mockOnChange} />);
     const button = await screen.findByRole('button', { name: 'Select folder' });
diff --git a/public/app/core/components/NestedFolderPicker/NestedFolderPicker.tsx b/public/app/core/components/NestedFolderPicker/NestedFolderPicker.tsx
index 888ea40f01f..7dd455e0780 100644
--- a/public/app/core/components/NestedFolderPicker/NestedFolderPicker.tsx
+++ b/public/app/core/components/NestedFolderPicker/NestedFolderPicker.tsx
@@ -42,7 +42,10 @@ export interface NestedFolderPickerProps {
   excludeUIDs?: string[];
 
   /* Callback for when the user selects a folder */
-  onChange?: (folderUID: string, folderName: string) => void;
+  onChange?: (folderUID: string | undefined, folderName: string | undefined) => void;
+
+  /* Whether the picker should be clearable */
+  clearable?: boolean;
 }
 
 const EXCLUDED_KINDS = ['empty-folder' as const, 'dashboard' as const];
@@ -64,6 +67,7 @@ export function NestedFolderPicker({
   value,
   invalid,
   showRootFolder = true,
+  clearable = false,
   excludeUIDs,
   onChange,
 }: NestedFolderPickerProps) {
@@ -158,6 +162,17 @@ export function NestedFolderPicker({
     [onChange]
   );
 
+  const handleClearSelection = useCallback(
+    (event: React.MouseEvent<SVGElement> | React.KeyboardEvent<SVGElement>) => {
+      event.preventDefault();
+      event.stopPropagation();
+      if (onChange) {
+        onChange(undefined, undefined);
+      }
+    },
+    [onChange]
+  );
+
   const handleCloseOverlay = useCallback(() => setOverlayOpen(false), [setOverlayOpen]);
 
   const baseHandleLoadMore = useLoadNextChildrenPage(EXCLUDED_KINDS);
@@ -259,6 +274,7 @@ export function NestedFolderPicker({
     return (
       <Trigger
         label={label}
+        handleClearSelection={clearable && value !== undefined ? handleClearSelection : undefined}
         invalid={invalid}
         isLoading={selectedFolder.isLoading}
         autoFocus={autoFocusButton}
diff --git a/public/app/core/components/NestedFolderPicker/Trigger.tsx b/public/app/core/components/NestedFolderPicker/Trigger.tsx
index f1ed9974d9c..8b25bd9b32f 100644
--- a/public/app/core/components/NestedFolderPicker/Trigger.tsx
+++ b/public/app/core/components/NestedFolderPicker/Trigger.tsx
@@ -4,19 +4,29 @@ import Skeleton from 'react-loading-skeleton';
 
 import { GrafanaTheme2 } from '@grafana/data';
 import { Icon, getInputStyles, useTheme2, Text } from '@grafana/ui';
-import { focusCss } from '@grafana/ui/src/themes/mixins';
-import { Trans } from 'app/core/internationalization';
+import { focusCss, getFocusStyles, getMouseFocusStyles } from '@grafana/ui/src/themes/mixins';
+import { Trans, t } from 'app/core/internationalization';
 
 interface TriggerProps extends ButtonHTMLAttributes<HTMLButtonElement> {
   isLoading: boolean;
+  handleClearSelection?: (event: React.MouseEvent<SVGElement> | React.KeyboardEvent<SVGElement>) => void;
   invalid?: boolean;
   label?: ReactNode;
 }
 
-function Trigger({ isLoading, invalid, label, ...rest }: TriggerProps, ref: React.ForwardedRef<HTMLButtonElement>) {
+function Trigger(
+  { handleClearSelection, isLoading, invalid, label, ...rest }: TriggerProps,
+  ref: React.ForwardedRef<HTMLButtonElement>
+) {
   const theme = useTheme2();
   const styles = getStyles(theme, invalid);
 
+  const handleKeyDown = (event: React.KeyboardEvent<SVGElement>) => {
+    if (event.key === 'Enter' || event.key === ' ') {
+      handleClearSelection?.(event);
+    }
+  };
+
   return (
     <div className={styles.wrapper}>
       <div className={styles.inputWrapper}>
@@ -41,6 +51,18 @@ function Trigger({ isLoading, invalid, label, ...rest }: TriggerProps, ref: Reac
               <Trans i18nKey="browse-dashboards.folder-picker.button-label">Select folder</Trans>
             </Text>
           )}
+
+          {!isLoading && handleClearSelection && (
+            <Icon
+              role="button"
+              tabIndex={0}
+              aria-label={t('browse-dashboards.folder-picker.clear-selection', 'Clear selection')}
+              className={styles.clearIcon}
+              name="times"
+              onClick={handleClearSelection}
+              onKeyDown={handleKeyDown}
+            />
+          )}
         </button>
 
         <div className={styles.suffix}>
@@ -92,11 +114,26 @@ const getStyles = (theme: GrafanaTheme2, invalid = false) => {
         '&:focus-visible': css`
           ${focusCss(theme)}
         `,
+        alignItems: 'center',
+        display: 'flex',
+        flexWrap: 'nowrap',
+        justifyContent: 'space-between',
+        paddingRight: 28,
       },
     ]),
 
     hasPrefix: css({
       paddingLeft: 28,
     }),
+
+    clearIcon: css({
+      color: theme.colors.text.secondary,
+      cursor: 'pointer',
+      '&:hover': {
+        color: theme.colors.text.primary,
+      },
+      '&:focus:not(:focus-visible)': getMouseFocusStyles(theme),
+      '&:focus-visible': getFocusStyles(theme),
+    }),
   };
 };
diff --git a/public/app/features/dashboard-scene/settings/GeneralSettingsEditView.tsx b/public/app/features/dashboard-scene/settings/GeneralSettingsEditView.tsx
index b86749abcbb..b6fca750747 100644
--- a/public/app/features/dashboard-scene/settings/GeneralSettingsEditView.tsx
+++ b/public/app/features/dashboard-scene/settings/GeneralSettingsEditView.tsx
@@ -90,7 +90,7 @@ export class GeneralSettingsEditView
     this._dashboard.setState({ tags: value });
   };
 
-  public onFolderChange = (newUID: string, newTitle: string) => {
+  public onFolderChange = (newUID: string | undefined, newTitle: string | undefined) => {
     const newMeta = {
       ...this._dashboard.state.meta,
       folderUid: newUID || this._dashboard.state.meta.folderUid,
diff --git a/public/app/features/dashboard/components/DashboardSettings/GeneralSettings.tsx b/public/app/features/dashboard/components/DashboardSettings/GeneralSettings.tsx
index c2025c81754..59795f86727 100644
--- a/public/app/features/dashboard/components/DashboardSettings/GeneralSettings.tsx
+++ b/public/app/features/dashboard/components/DashboardSettings/GeneralSettings.tsx
@@ -45,7 +45,7 @@ export function GeneralSettingsUnconnected({
   const [dashboardDescription, setDashboardDescription] = useState(dashboard.description);
   const pageNav = config.featureToggles.dockedMegaMenu ? sectionNav.node.parentItem : undefined;
 
-  const onFolderChange = (newUID: string, newTitle: string) => {
+  const onFolderChange = (newUID: string | undefined, newTitle: string | undefined) => {
     dashboard.meta.folderUid = newUID;
     dashboard.meta.folderTitle = newTitle;
     dashboard.meta.hasUnsavedFolderChange = true;
diff --git a/public/app/features/dashboard/components/SaveDashboard/forms/SaveDashboardAsForm.tsx b/public/app/features/dashboard/components/SaveDashboard/forms/SaveDashboardAsForm.tsx
index 0e86fa849d3..8e435c158b8 100644
--- a/public/app/features/dashboard/components/SaveDashboard/forms/SaveDashboardAsForm.tsx
+++ b/public/app/features/dashboard/components/SaveDashboard/forms/SaveDashboardAsForm.tsx
@@ -167,7 +167,7 @@ export const SaveDashboardAsForm = ({
               render={({ field: { ref, ...field } }) => (
                 <FolderPicker
                   {...field}
-                  onChange={(uid: string, title: string) => field.onChange({ uid, title })}
+                  onChange={(uid: string | undefined, title: string | undefined) => field.onChange({ uid, title })}
                   value={field.value?.uid}
                   // Old folder picker fields
                   initialTitle={dashboard.meta.folderTitle}
diff --git a/public/app/plugins/panel/dashlist/module.tsx b/public/app/plugins/panel/dashlist/module.tsx
index 6cbc76f964d..c9fe6d12654 100644
--- a/public/app/plugins/panel/dashlist/module.tsx
+++ b/public/app/plugins/panel/dashlist/module.tsx
@@ -57,7 +57,7 @@ export const plugin = new PanelPlugin<Options>(DashList)
         id: 'folderUID',
         defaultValue: undefined,
         editor: function RenderFolderPicker({ value, onChange }) {
-          return <FolderPicker value={value} onChange={(folderUID) => onChange(folderUID)} />;
+          return <FolderPicker clearable value={value} onChange={(folderUID) => onChange(folderUID)} />;
         },
       })
       .addCustomEditor({
diff --git a/public/locales/de-DE/grafana.json b/public/locales/de-DE/grafana.json
index 80d9534dce4..64078c4ac5e 100644
--- a/public/locales/de-DE/grafana.json
+++ b/public/locales/de-DE/grafana.json
@@ -76,6 +76,7 @@
     "folder-picker": {
       "accessible-label": "Ordner auswählen: {{ label }} aktuell ausgewählt",
       "button-label": "Ordner auswählen",
+      "clear-selection": "",
       "empty-message": "Keine Ordner gefunden",
       "error-title": "Fehler beim Laden der Ordner",
       "search-placeholder": "Ordner suchen",
diff --git a/public/locales/en-US/grafana.json b/public/locales/en-US/grafana.json
index d7dc250426c..23fb2ae1e95 100644
--- a/public/locales/en-US/grafana.json
+++ b/public/locales/en-US/grafana.json
@@ -76,6 +76,7 @@
     "folder-picker": {
       "accessible-label": "Select folder: {{ label }} currently selected",
       "button-label": "Select folder",
+      "clear-selection": "Clear selection",
       "empty-message": "No folders found",
       "error-title": "Error loading folders",
       "search-placeholder": "Search folders",
diff --git a/public/locales/es-ES/grafana.json b/public/locales/es-ES/grafana.json
index 047df60e828..738854ff300 100644
--- a/public/locales/es-ES/grafana.json
+++ b/public/locales/es-ES/grafana.json
@@ -81,6 +81,7 @@
     "folder-picker": {
       "accessible-label": "Seleccionar carpeta: {{ label }} seleccionada actualmente",
       "button-label": "Seleccionar carpeta",
+      "clear-selection": "",
       "empty-message": "No se ha encontrado ninguna carpeta",
       "error-title": "Error al cargar las carpetas",
       "search-placeholder": "Buscar carpetas",
diff --git a/public/locales/fr-FR/grafana.json b/public/locales/fr-FR/grafana.json
index 88f75d17d44..1a0ba83c858 100644
--- a/public/locales/fr-FR/grafana.json
+++ b/public/locales/fr-FR/grafana.json
@@ -81,6 +81,7 @@
     "folder-picker": {
       "accessible-label": "Sélectionnez un dossier : {{ label }} est sélectionné actuellement",
       "button-label": "Sélectionner un dossier",
+      "clear-selection": "",
       "empty-message": "Aucun dossier trouvé",
       "error-title": "Impossible de charger les dossiers",
       "search-placeholder": "Rechercher dans les dossiers",
diff --git a/public/locales/pseudo-LOCALE/grafana.json b/public/locales/pseudo-LOCALE/grafana.json
index e57f0726aa4..c96f41250c0 100644
--- a/public/locales/pseudo-LOCALE/grafana.json
+++ b/public/locales/pseudo-LOCALE/grafana.json
@@ -76,6 +76,7 @@
     "folder-picker": {
       "accessible-label": "Ŝęľęčŧ ƒőľđęř: {{ label }} čūřřęʼnŧľy şęľęčŧęđ",
       "button-label": "Ŝęľęčŧ ƒőľđęř",
+      "clear-selection": "Cľęäř şęľęčŧįőʼn",
       "empty-message": "Ńő ƒőľđęřş ƒőūʼnđ",
       "error-title": "Ēřřőř ľőäđįʼnģ ƒőľđęřş",
       "search-placeholder": "Ŝęäřčĥ ƒőľđęřş",
diff --git a/public/locales/zh-Hans/grafana.json b/public/locales/zh-Hans/grafana.json
index 94100e46fd0..7d42394d0f6 100644
--- a/public/locales/zh-Hans/grafana.json
+++ b/public/locales/zh-Hans/grafana.json
@@ -71,6 +71,7 @@
     "folder-picker": {
       "accessible-label": "选择文件夹：{{ label }} 当前已选择",
       "button-label": "选择文件夹",
+      "clear-selection": "",
       "empty-message": "未找到文件夹",
       "error-title": "加载文件夹时出错",
       "search-placeholder": "搜索文件夹",