diff --git a/packages/grafana-data/src/types/icon.ts b/packages/grafana-data/src/types/icon.ts
index a9fb6cf08d5..3570094ff31 100644
--- a/packages/grafana-data/src/types/icon.ts
+++ b/packages/grafana-data/src/types/icon.ts
@@ -172,6 +172,7 @@ export const availableIconsIndex = {
   'layer-group': true,
   'layers-alt': true,
   layers: true,
+  'layers-slash': true,
   'legend-hide': true,
   'legend-show': true,
   'library-panel': true,
diff --git a/public/app/features/dashboard-scene/scene/layout-rows/RowsLayoutManager.tsx b/public/app/features/dashboard-scene/scene/layout-rows/RowsLayoutManager.tsx
index b2da3a617f3..fb4240520af 100644
--- a/public/app/features/dashboard-scene/scene/layout-rows/RowsLayoutManager.tsx
+++ b/public/app/features/dashboard-scene/scene/layout-rows/RowsLayoutManager.tsx
@@ -16,7 +16,7 @@ import { DefaultGridLayoutManager } from '../layout-default/DefaultGridLayoutMan
 import { RowRepeaterBehavior } from '../layout-default/RowRepeaterBehavior';
 import { TabsLayoutManager } from '../layout-tabs/TabsLayoutManager';
 import { getRowFromClipboard } from '../layouts-shared/paste';
-import { generateUniqueTitle } from '../layouts-shared/utils';
+import { generateUniqueTitle, ungroupLayout } from '../layouts-shared/utils';
 import { DashboardLayoutManager } from '../types/DashboardLayoutManager';
 import { LayoutRegistryItem } from '../types/LayoutRegistryItem';
 
@@ -134,8 +134,14 @@ export class RowsLayoutManager extends SceneObjectBase<RowsLayoutManagerState> i
   }
 
   public removeRow(row: RowItem) {
+    // When removing last row replace ourselves with the inner row layout
+    if (this.state.rows.length === 1) {
+      ungroupLayout(this, row.state.layout);
+      return;
+    }
+
     const rows = this.state.rows.filter((r) => r !== row);
-    this.setState({ rows: rows.length === 0 ? [new RowItem()] : rows });
+    this.setState({ rows });
     this.publishEvent(new ObjectRemovedFromCanvasEvent(row), true);
   }
 
diff --git a/public/app/features/dashboard-scene/scene/layout-tabs/TabsLayoutManager.tsx b/public/app/features/dashboard-scene/scene/layout-tabs/TabsLayoutManager.tsx
index 039a889ec21..b73dc7eda73 100644
--- a/public/app/features/dashboard-scene/scene/layout-tabs/TabsLayoutManager.tsx
+++ b/public/app/features/dashboard-scene/scene/layout-tabs/TabsLayoutManager.tsx
@@ -18,7 +18,7 @@ import { getDashboardSceneFor } from '../../utils/utils';
 import { RowItem } from '../layout-rows/RowItem';
 import { RowsLayoutManager } from '../layout-rows/RowsLayoutManager';
 import { getTabFromClipboard } from '../layouts-shared/paste';
-import { generateUniqueTitle } from '../layouts-shared/utils';
+import { generateUniqueTitle, ungroupLayout } from '../layouts-shared/utils';
 import { DashboardLayoutManager } from '../types/DashboardLayoutManager';
 import { LayoutRegistryItem } from '../types/LayoutRegistryItem';
 
@@ -152,9 +152,9 @@ export class TabsLayoutManager extends SceneObjectBase<TabsLayoutManagerState> i
   }
 
   public removeTab(tabToRemove: TabItem) {
-    // Do not allow removing last tab (for now)
+    // When removing last tab replace ourselves with the inner tab layout
     if (this.state.tabs.length === 1) {
-      return;
+      ungroupLayout(this, tabToRemove.state.layout);
     }
 
     const currentTab = this.getCurrentTab();
diff --git a/public/app/features/dashboard-scene/scene/layouts-shared/CanvasGridAddActions.tsx b/public/app/features/dashboard-scene/scene/layouts-shared/CanvasGridAddActions.tsx
index 571a7c06ca0..cc70eb236ce 100644
--- a/public/app/features/dashboard-scene/scene/layouts-shared/CanvasGridAddActions.tsx
+++ b/public/app/features/dashboard-scene/scene/layouts-shared/CanvasGridAddActions.tsx
@@ -4,11 +4,15 @@ import { GrafanaTheme2 } from '@grafana/data';
 import { Button, Dropdown, Menu, useStyles2 } from '@grafana/ui';
 import { t, Trans } from 'app/core/internationalization';
 
+import { dashboardSceneGraph } from '../../utils/dashboardSceneGraph';
 import { getDefaultVizPanel } from '../../utils/utils';
+import { DashboardScene } from '../DashboardScene';
+import { RowsLayoutManager } from '../layout-rows/RowsLayoutManager';
+import { TabsLayoutManager } from '../layout-tabs/TabsLayoutManager';
 import { DashboardLayoutManager } from '../types/DashboardLayoutManager';
 
 import { addNewRowTo, addNewTabTo } from './addNew';
-import { useClipboardState } from './useClipboardState';
+import { ungroupLayout } from './utils';
 
 export interface Props {
   layoutManager: DashboardLayoutManager;
@@ -16,7 +20,6 @@ export interface Props {
 
 export function CanvasGridAddActions({ layoutManager }: Props) {
   const styles = useStyles2(getStyles);
-  const { hasCopiedPanel } = useClipboardState();
 
   return (
     <div className={cx(styles.addAction, 'dashboard-canvas-add-button')}>
@@ -52,22 +55,69 @@ export function CanvasGridAddActions({ layoutManager }: Props) {
           <Trans i18nKey="dashboard.canvas-actions.group-panels">Group panels</Trans>
         </Button>
       </Dropdown>
-      {hasCopiedPanel && layoutManager.pastePanel && (
-        <Button
-          variant="primary"
-          fill="text"
-          icon="layers"
-          onClick={() => {
-            layoutManager.pastePanel?.();
-          }}
-        >
-          <Trans i18nKey="dashboard.canvas-actions.paste-panel">Paste panel</Trans>
-        </Button>
-      )}
+      {}
+      {renderUngroupAction(layoutManager)}
     </div>
   );
 }
 
+function renderUngroupAction(layoutManager: DashboardLayoutManager) {
+  const parent = layoutManager.parent;
+
+  if (parent instanceof DashboardScene) {
+    return null;
+  }
+
+  const parentLayout = dashboardSceneGraph.getLayoutManagerFor(layoutManager.parent!);
+
+  const onUngroup = () => {
+    ungroupLayout(parentLayout, layoutManager);
+  };
+
+  if (parentLayout instanceof TabsLayoutManager) {
+    return <UngroupButtonTabs parentLayout={parentLayout} onClick={onUngroup} />;
+  }
+
+  if (parentLayout instanceof RowsLayoutManager) {
+    return <UngroupButtonRows parentLayout={parentLayout} onClick={onUngroup} />;
+  }
+
+  return null;
+}
+
+interface UngroupButtonProps<T> {
+  parentLayout: T;
+  onClick: () => void;
+}
+
+function UngroupButtonTabs({ parentLayout, onClick }: UngroupButtonProps<TabsLayoutManager>) {
+  const { tabs } = parentLayout.useState();
+
+  if (tabs.length > 1) {
+    return null;
+  }
+
+  return (
+    <Button variant="primary" fill="text" icon="layers-slash" onClick={onClick}>
+      <Trans i18nKey="dashboard.canvas-actions.un-group-panels">Ungroup</Trans>
+    </Button>
+  );
+}
+
+function UngroupButtonRows({ parentLayout, onClick }: UngroupButtonProps<RowsLayoutManager>) {
+  const { rows } = parentLayout.useState();
+
+  if (rows.length > 1) {
+    return null;
+  }
+
+  return (
+    <Button variant="primary" fill="text" icon="layers-slash" onClick={onClick}>
+      <Trans i18nKey="dashboard.canvas-actions.un-group-panels">Ungroup</Trans>
+    </Button>
+  );
+}
+
 const getStyles = (theme: GrafanaTheme2) => ({
   addAction: css({
     position: 'absolute',
diff --git a/public/app/features/dashboard-scene/scene/layouts-shared/utils.ts b/public/app/features/dashboard-scene/scene/layouts-shared/utils.ts
index 3d4b850d568..41402564081 100644
--- a/public/app/features/dashboard-scene/scene/layouts-shared/utils.ts
+++ b/public/app/features/dashboard-scene/scene/layouts-shared/utils.ts
@@ -3,6 +3,7 @@ import { useEffect, useRef } from 'react';
 import { SceneObject } from '@grafana/scenes';
 
 import { DashboardLayoutManager, isDashboardLayoutManager } from '../types/DashboardLayoutManager';
+import { isLayoutParent } from '../types/LayoutParent';
 
 export function findParentLayout(sceneObject: SceneObject): DashboardLayoutManager | null {
   let parent = sceneObject.parent;
@@ -66,3 +67,11 @@ export function generateUniqueTitle(title: string | undefined, existingTitles: S
 
   return baseTitle;
 }
+
+export function ungroupLayout(layout: DashboardLayoutManager, innerLayout: DashboardLayoutManager) {
+  const layoutParent = layout.parent!;
+  if (isLayoutParent(layoutParent)) {
+    innerLayout.clearParent();
+    layoutParent.switchLayout(innerLayout);
+  }
+}
diff --git a/public/locales/en-US/grafana.json b/public/locales/en-US/grafana.json
index fcd059380fc..10b1c45a9e0 100644
--- a/public/locales/en-US/grafana.json
+++ b/public/locales/en-US/grafana.json
@@ -1508,9 +1508,9 @@
       "group-panels": "Group panels",
       "new-row": "New row",
       "new-tab": "New tab",
-      "paste-panel": "Paste panel",
       "paste-row": "Paste row",
-      "paste-tab": "Paste tab"
+      "paste-tab": "Paste tab",
+      "un-group-panels": "Ungroup"
     },
     "conditional-rendering": {
       "conditions": {