diff --git a/packages/grafana-e2e-selectors/src/selectors/pages.ts b/packages/grafana-e2e-selectors/src/selectors/pages.ts
index b88dac9099c..154e27b4251 100644
--- a/packages/grafana-e2e-selectors/src/selectors/pages.ts
+++ b/packages/grafana-e2e-selectors/src/selectors/pages.ts
@@ -190,6 +190,9 @@ export const versionedPages = {
       outlineButton: {
         '12.4.0': 'data-testid Dashboard Sidebar outline button',
       },
+      addButton: {
+         '12.4.0': 'data-testid Dashboard Sidebar new button',
+      }
     },
     DashNav: {
       nav: {
diff --git a/packages/grafana-ui/src/components/Sidebar/SidebarButton.tsx b/packages/grafana-ui/src/components/Sidebar/SidebarButton.tsx
index 9f5e0f20d71..e059a5f5acc 100644
--- a/packages/grafana-ui/src/components/Sidebar/SidebarButton.tsx
+++ b/packages/grafana-ui/src/components/Sidebar/SidebarButton.tsx
@@ -16,10 +16,11 @@ export interface Props extends ButtonHTMLAttributes<HTMLButtonElement> {
   active?: boolean;
   tooltip?: string;
   title: string;
+  isAddButton?: boolean;
 }
 
 export const SidebarButton = React.forwardRef<HTMLButtonElement, Props>(
-  ({ icon, active, onClick, title, tooltip, ...restProps }, ref) => {
+  ({ icon, active, onClick, title, tooltip, isAddButton, ...restProps }, ref) => {
     const styles = useStyles2(getStyles);
     const context = useContext(SidebarContext);
 
@@ -31,7 +32,8 @@ export const SidebarButton = React.forwardRef<HTMLButtonElement, Props>(
       styles.button,
       context.compact && styles.compact,
       active && styles.active,
-      context.position === 'left' && styles.leftButton
+      context.position === 'left' && styles.leftButton,
+      isAddButton && 'primary'
     );
 
     return (
@@ -44,7 +46,7 @@ export const SidebarButton = React.forwardRef<HTMLButtonElement, Props>(
           onClick={onClick}
           {...restProps}
         >
-          <div className={styles.iconWrapper}>{renderIcon(icon, context.compact)}</div>
+          <div>{renderIcon(icon, isAddButton)}</div>
           {!context.compact && <div className={cx(styles.title, active && styles.titleActive)}>{title}</div>}
         </button>
       </Tooltip>
@@ -54,13 +56,13 @@ export const SidebarButton = React.forwardRef<HTMLButtonElement, Props>(
 
 SidebarButton.displayName = 'SidebarButton';
 
-function renderIcon(icon: IconName | React.ReactNode, compact?: boolean) {
+function renderIcon(icon: IconName | React.ReactNode, isAddButton?: boolean) {
   if (!icon) {
     return null;
   }
 
   if (isIconName(icon)) {
-    return <Icon name={icon} size={compact ? `lg` : `lg`} />;
+    return <Icon name={icon} size={isAddButton ? 'xl' : 'lg'} />;
   }
 
   return icon;
@@ -83,7 +85,14 @@ const getStyles = (theme: GrafanaTheme2) => {
       color: theme.colors.text.secondary,
       background: 'transparent',
       border: `none`,
-
+      '&.primary': css({
+        svg: {
+          backgroundColor: theme.colors.primary.main,
+          color: theme.colors.getContrastText(theme.colors.primary.main),
+          borderRadius: theme.shape.radius.sm,
+          padding: 2,
+        },
+      }),
       [theme.transitions.handleMotion('no-preference', 'reduce')]: {
         transition: theme.transitions.create(['background-color', 'border-color', 'color'], {
           duration: theme.transitions.duration.short,
@@ -145,7 +154,6 @@ const getStyles = (theme: GrafanaTheme2) => {
       width: '100%',
       whiteSpace: 'nowrap',
     }),
-    iconWrapper: css({}),
     title: css({
       fontSize: theme.typography.bodySmall.fontSize,
       color: theme.colors.text.secondary,
diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
index 64f0c774ea8..f49dd81ed4b 100644
--- a/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
+++ b/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
@@ -30,7 +30,7 @@ export interface DashboardEditPaneState extends SceneObjectState {
   isDocked?: boolean;
 }
 
-export type DashboardSidebarPaneName = 'element' | 'outline' | 'filters';
+export type DashboardSidebarPaneName = 'element' | 'outline' | 'filters' | 'add';
 
 export class DashboardEditPane extends SceneObjectBase<DashboardEditPaneState> {
   public constructor() {
diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx
index 950785c2ffd..34909cb49f9 100644
--- a/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx
+++ b/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx
@@ -1,38 +1,42 @@
-import { useMemo } from 'react';
+import { useMemo, useState } from 'react';
 
 import { selectors } from '@grafana/e2e-selectors';
 import { t } from '@grafana/i18n';
 import { config } from '@grafana/runtime';
-import { useSceneObjectState } from '@grafana/scenes';
+import { SceneObject, SceneObjectState, useSceneObjectState, VizPanel } from '@grafana/scenes';
 import { Sidebar } from '@grafana/ui';
 import { getDashboardSrv } from 'app/features/dashboard/services/DashboardSrv';
 
 import { DashboardScene } from '../scene/DashboardScene';
 import { onOpenSnapshotOriginalDashboard } from '../scene/GoToSnapshotOriginButton';
 import { ManagedDashboardNavBarBadge } from '../scene/ManagedDashboardNavBarBadge';
+import { RowItem } from '../scene/layout-rows/RowItem';
+import { TabItem } from '../scene/layout-tabs/TabItem';
 import { ToolbarActionProps } from '../scene/new-toolbar/types';
 import { dynamicDashNavActions } from '../utils/registerDynamicDashNavAction';
+import { getDefaultVizPanel } from '../utils/utils';
 
 import { DashboardEditPane } from './DashboardEditPane';
 import { ShareExportDashboardButton } from './DashboardExportButton';
 import { DashboardOutline } from './DashboardOutline';
+import { DashboardSidePaneNew } from './DashboardSidePaneNew';
 import { ElementEditPane } from './ElementEditPane';
 
 export interface Props {
   editPane: DashboardEditPane;
   dashboard: DashboardScene;
-  isDocked?: boolean;
 }
 
 /**
  * Making the EditPane rendering completely standalone (not using editPane.Component) in order to pass custom react props
  */
-export function DashboardEditPaneRenderer({ editPane, dashboard, isDocked }: Props) {
+export function DashboardEditPaneRenderer({ editPane, dashboard }: Props) {
   const { selection, openPane } = useSceneObjectState(editPane, { shouldActivateOrKeepAlive: true });
   const { isEditing, meta, uid } = dashboard.useState();
   const hasUid = Boolean(uid);
   const selectedObject = selection?.getFirstObject();
   const isNewElement = selection?.isNewElement() ?? false;
+  const [selectedLayoutElement, setSelectedLayoutElement] = useState(selectedObject);
 
   const editableElement = useMemo(() => {
     if (selection) {
@@ -42,6 +46,26 @@ export function DashboardEditPaneRenderer({ editPane, dashboard, isDocked }: Pro
     return undefined;
   }, [selection]);
 
+  // saves the row or tab selected when opening the 'add' pane, so new panels can later be added to it
+  const onSetLayoutElement = (obj: SceneObject<SceneObjectState> | undefined) => {
+    if (obj instanceof RowItem || obj instanceof TabItem) {
+      setSelectedLayoutElement(obj);
+    } else if (!(obj instanceof VizPanel)) {
+      setSelectedLayoutElement(dashboard);
+    }
+  };
+
+  const onAddNewPanel = () => {
+    if (selectedLayoutElement) {
+      const panel = getDefaultVizPanel();
+      if (selectedLayoutElement instanceof DashboardScene) {
+        dashboard.addPanel(panel);
+      } else if (selectedLayoutElement instanceof RowItem || selectedLayoutElement instanceof TabItem) {
+        selectedLayoutElement.getLayout().addPanel(panel);
+      }
+    }
+  };
+
   return (
     <>
       {editableElement && (
@@ -54,6 +78,11 @@ export function DashboardEditPaneRenderer({ editPane, dashboard, isDocked }: Pro
           />
         </Sidebar.OpenPane>
       )}
+      {openPane === 'add' && (
+        <Sidebar.OpenPane>
+          <DashboardSidePaneNew onAddPanel={onAddNewPanel} />
+        </Sidebar.OpenPane>
+      )}
       {openPane === 'outline' && (
         <Sidebar.OpenPane>
           <DashboardOutline editPane={editPane} isEditing={isEditing} />
@@ -68,6 +97,18 @@ export function DashboardEditPaneRenderer({ editPane, dashboard, isDocked }: Pro
                 <RedoButton dashboard={dashboard} />
               </>
             )}
+            <Sidebar.Button
+              icon="plus"
+              isAddButton
+              onClick={() => {
+                onSetLayoutElement(selectedObject);
+                editPane.openPane('add');
+              }}
+              title={t('dashboard.sidebar.add.title', 'Add')}
+              tooltip={t('dashboard.sidebar.add.tooltip', 'Add new element')}
+              data-testid={selectors.pages.Dashboard.Sidebar.addButton}
+              active={selectedObject === null || openPane === 'add'}
+            />
             <Sidebar.Button
               icon="cog"
               onClick={() => editPane.selectObject(dashboard, dashboard.state.key!)}
diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardSidePaneNew.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardSidePaneNew.tsx
new file mode 100644
index 00000000000..7e78ae6f584
--- /dev/null
+++ b/public/app/features/dashboard-scene/edit-pane/DashboardSidePaneNew.tsx
@@ -0,0 +1,56 @@
+import { css } from '@emotion/css';
+
+import { GrafanaTheme2 } from '@grafana/data';
+import { t } from '@grafana/i18n';
+import { Sidebar, Text, useStyles2 } from '@grafana/ui';
+import addPanelImg from 'img/dashboards/add-panel.png';
+
+
+export function DashboardSidePaneNew({ onAddPanel }: {onAddPanel: () => void}) {
+  const styles = useStyles2(getStyles);
+
+  return (
+    <div className={styles.sidePanel}>
+      <Sidebar.PaneHeader title={t('dashboard.add.pane-header', 'Add')} />
+      <div className={styles.sidePanelContainer}>
+        <Text weight="medium">{t('dashboard.add.new-panel.title', 'Panel')}</Text>
+        <Text variant="bodySmall">
+          {t('dashboard.add.new-panel.description', 'Drag or click to add a panel')}
+        </Text>
+
+        <div className={styles.imageContainer}>
+          <button className={styles.noStyles} onClick={onAddPanel} aria-label={t('dashboard.add.new-panel.title', 'Panel')}>
+            <img alt="Add panel click area" src={addPanelImg} />
+          </button>
+        </div>
+      </div>
+    </div>
+  );
+}
+
+function getStyles(theme: GrafanaTheme2) {
+  return {
+    sidePanel: css({
+      borderBottom: `1px solid ${theme.colors.border.weak}`,
+    }),
+    sidePanelContainer: css({
+      padding: theme.spacing(2),
+      span: {
+        display: 'block',
+      },
+    }),
+    imageContainer: css({
+        opacity: 0.8,
+      padding: theme.spacing(2, 0),
+      borderRadius: theme.shape.radius.sm,
+      cursor: 'pointer',
+      width: '100%',
+      '&:hover': {
+        opacity: 1,
+      }
+    }),
+    noStyles: css({
+      all: 'unset',
+    }),
+  };
+}
diff --git a/public/img/dashboards/add-panel.png b/public/img/dashboards/add-panel.png
new file mode 100644
index 00000000000..c64574cd392
Binary files /dev/null and b/public/img/dashboards/add-panel.png differ
diff --git a/public/locales/en-US/grafana.json b/public/locales/en-US/grafana.json
index 10967a7331c..fad346d0066 100644
--- a/public/locales/en-US/grafana.json
+++ b/public/locales/en-US/grafana.json
@@ -5216,6 +5216,13 @@
       "title-matched_one": "Matched {{count}}/{{totalCount}} options",
       "title-matched_other": "Matched {{count}}/{{totalCount}} options"
     },
+    "add": {
+      "pane-header": "Add",
+      "new-panel": {
+        "title": "Panel",
+        "description": "Drag or click to add a panel"
+      }
+    },
     "outline": {
       "pane-header": "Content outline",
       "repeated-item": "Repeat",
@@ -5433,6 +5440,10 @@
         "title": "Options",
         "tooltip": "Dashboard options"
       },
+      "add": {
+        "title": "Add",
+        "tooltip": "Add a new element"
+      },
       "edit-schema": {
         "title": "Code",
         "tooltip": "Edit as code"