diff --git a/public/app/core/components/NavBar/Next/NavBarItem.tsx b/public/app/core/components/NavBar/Next/NavBarItem.tsx
index 61c3b9400a2..752e8807431 100644
--- a/public/app/core/components/NavBar/Next/NavBarItem.tsx
+++ b/public/app/core/components/NavBar/Next/NavBarItem.tsx
@@ -8,7 +8,7 @@ import { locationService } from '@grafana/runtime';
 import { NavBarMenuItem } from './NavBarMenuItem';
 import { getNavBarItemWithoutMenuStyles, NavBarItemWithoutMenu } from './NavBarItemWithoutMenu';
 import { NavBarItemMenuTrigger } from './NavBarItemMenuTrigger';
-import { NavBarItemMenu } from '../NavBarItemMenu';
+import { NavBarItemMenu } from './NavBarItemMenu';
 import { getNavModelItemKey } from '../utils';
 import { useLingui } from '@lingui/react';
 import menuItemTranslations from '../navBarItem-translations';
@@ -82,7 +82,12 @@ const NavBarItem = ({
   } else {
     return (
       <li className={cx(styles.container, className)}>
-        <NavBarItemMenuTrigger item={section} isActive={isActive} label={linkText}>
+        <NavBarItemMenuTrigger
+          item={section}
+          isActive={isActive}
+          label={linkText}
+          reverseMenuDirection={reverseMenuDirection}
+        >
           <NavBarItemMenu
             items={items}
             reverseMenuDirection={reverseMenuDirection}
diff --git a/public/app/core/components/NavBar/Next/NavBarItemMenu.tsx b/public/app/core/components/NavBar/Next/NavBarItemMenu.tsx
new file mode 100644
index 00000000000..9b9695a8f97
--- /dev/null
+++ b/public/app/core/components/NavBar/Next/NavBarItemMenu.tsx
@@ -0,0 +1,103 @@
+import React, { ReactElement, useEffect, useRef } from 'react';
+import { css } from '@emotion/css';
+import { useTheme2 } from '@grafana/ui';
+import { GrafanaTheme2, NavMenuItemType, NavModelItem } from '@grafana/data';
+import { SpectrumMenuProps } from '@react-types/menu';
+import { useMenu } from '@react-aria/menu';
+import { useTreeState } from '@react-stately/tree';
+import { mergeProps } from '@react-aria/utils';
+
+import { getNavModelItemKey } from '../utils';
+import { useNavBarItemMenuContext } from '../context';
+import { NavBarItemMenuItem } from '../NavBarItemMenuItem';
+
+export interface NavBarItemMenuProps extends SpectrumMenuProps<NavModelItem> {
+  onNavigate: (item: NavModelItem) => void;
+  adjustHeightForBorder: boolean;
+  reverseMenuDirection?: boolean;
+}
+
+export function NavBarItemMenu(props: NavBarItemMenuProps): ReactElement | null {
+  const { reverseMenuDirection, adjustHeightForBorder, disabledKeys, onNavigate, ...rest } = props;
+  const contextProps = useNavBarItemMenuContext();
+  const completeProps = {
+    ...mergeProps(contextProps, rest),
+  };
+  const { menuHasFocus, menuProps: contextMenuProps = {} } = contextProps;
+  const theme = useTheme2();
+  const styles = getStyles(theme, reverseMenuDirection);
+  const state = useTreeState<NavModelItem>({ ...rest, disabledKeys });
+  const ref = useRef(null);
+  const { menuProps } = useMenu(completeProps, { ...state }, ref);
+  const allItems = [...state.collection];
+  const items = allItems.filter((item) => item.value.menuItemType === NavMenuItemType.Item);
+  const section = allItems.find((item) => item.value.menuItemType === NavMenuItemType.Section);
+
+  useEffect(() => {
+    if (menuHasFocus && !state.selectionManager.isFocused) {
+      state.selectionManager.setFocusedKey(section?.key ?? '');
+      state.selectionManager.setFocused(true);
+    } else if (!menuHasFocus) {
+      state.selectionManager.setFocused(false);
+      state.selectionManager.setFocusedKey('');
+      state.selectionManager.clearSelection();
+    }
+  }, [menuHasFocus, state.selectionManager, reverseMenuDirection, section?.key]);
+
+  if (!section) {
+    return null;
+  }
+
+  const menuSubTitle = section.value.subTitle;
+
+  const sectionComponent = (
+    <NavBarItemMenuItem key={section.key} item={section} state={state} onNavigate={onNavigate} />
+  );
+
+  const itemComponents = items.map((item) => (
+    <NavBarItemMenuItem key={getNavModelItemKey(item.value)} item={item} state={state} onNavigate={onNavigate} />
+  ));
+
+  const subTitleComponent = menuSubTitle && (
+    <li key={menuSubTitle} className={styles.subtitle}>
+      {menuSubTitle}
+    </li>
+  );
+
+  const menu = [sectionComponent, itemComponents, subTitleComponent];
+
+  return (
+    <ul className={styles.menu} ref={ref} {...mergeProps(menuProps, contextMenuProps)} tabIndex={menuHasFocus ? 0 : -1}>
+      {reverseMenuDirection ? menu.reverse() : menu}
+    </ul>
+  );
+}
+
+function getStyles(theme: GrafanaTheme2, reverseDirection?: boolean) {
+  return {
+    menu: css`
+      background-color: ${theme.colors.background.primary};
+      border: 1px solid ${theme.components.panel.borderColor};
+      bottom: ${reverseDirection ? 0 : 'auto'};
+      box-shadow: ${theme.shadows.z3};
+      display: flex;
+      flex-direction: column;
+      left: 100%;
+      list-style: none;
+      min-width: 140px;
+      top: ${reverseDirection ? 'auto' : 0};
+      transition: ${theme.transitions.create('opacity')};
+      z-index: ${theme.zIndex.sidemenu};
+    `,
+    subtitle: css`
+      background-color: transparent;
+      border-${reverseDirection ? 'bottom' : 'top'}: 1px solid ${theme.colors.border.weak};
+      color: ${theme.colors.text.secondary};
+      font-size: ${theme.typography.bodySmall.fontSize};
+      font-weight: ${theme.typography.bodySmall.fontWeight};
+      padding: ${theme.spacing(1)} ${theme.spacing(2)} ${theme.spacing(1)};
+      text-align: left;
+      white-space: nowrap;
+    `,
+  };
+}
diff --git a/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx b/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx
index edd29e0cd48..9d81447e735 100644
--- a/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx
+++ b/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx
@@ -8,10 +8,10 @@ import { useMenuTrigger } from '@react-aria/menu';
 import { useFocusWithin, useHover, useKeyboard } from '@react-aria/interactions';
 import { useButton } from '@react-aria/button';
 import { useDialog } from '@react-aria/dialog';
-import { DismissButton, useOverlay } from '@react-aria/overlays';
+import { DismissButton, OverlayContainer, useOverlay, useOverlayPosition } from '@react-aria/overlays';
 import { FocusScope } from '@react-aria/focus';
 
-import { NavBarItemMenuContext } from '../context';
+import { NavBarItemMenuContext, useNavBarContext } from '../context';
 import { NavFeatureHighlight } from '../NavFeatureHighlight';
 import { reportExperimentView } from '@grafana/runtime';
 
@@ -20,11 +20,13 @@ export interface NavBarItemMenuTriggerProps extends MenuTriggerProps {
   item: NavModelItem;
   isActive?: boolean;
   label: string;
+  reverseMenuDirection: boolean;
 }
 
 export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactElement {
-  const { item, isActive, label, children: menu, ...rest } = props;
+  const { item, isActive, label, children: menu, reverseMenuDirection, ...rest } = props;
   const [menuHasFocus, setMenuHasFocus] = useState(false);
+  const { menuIdOpen, setMenuIdOpen } = useNavBarContext();
   const theme = useTheme2();
   const styles = getStyles(theme, isActive);
 
@@ -45,23 +47,23 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
     onHoverChange: (isHovering) => {
       if (isHovering) {
         state.open();
+        setMenuIdOpen(ref.current?.id || null);
       } else {
         state.close();
       }
     },
   });
 
-  const { focusWithinProps } = useFocusWithin({
-    onFocusWithinChange: (isFocused) => {
-      if (isFocused) {
-        state.open();
-      }
-      if (!isFocused) {
-        state.close();
-        setMenuHasFocus(false);
-      }
-    },
-  });
+  useEffect(() => {
+    // close the menu when changing submenus
+    // or when the state of the overlay changes (i.e hovering outside)
+    if (menuIdOpen !== ref.current?.id || !state.isOpen) {
+      state.close();
+      setMenuHasFocus(false);
+    } else {
+      state.open();
+    }
+  }, [menuIdOpen, state]);
 
   const { keyboardProps } = useKeyboard({
     onKeyDown: (e) => {
@@ -72,6 +74,9 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
           }
           setMenuHasFocus(true);
           break;
+        case 'Tab':
+          setMenuIdOpen(null);
+          break;
         default:
           break;
       }
@@ -133,7 +138,7 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
       );
   }
 
-  const overlayRef = React.useRef(null);
+  const overlayRef = React.useRef<HTMLDivElement>(null);
   const { dialogProps } = useDialog({}, overlayRef);
   const { overlayProps } = useOverlay(
     {
@@ -144,29 +149,55 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
     overlayRef
   );
 
+  let { overlayProps: overlayPositionProps } = useOverlayPosition({
+    targetRef: ref,
+    overlayRef,
+    placement: reverseMenuDirection ? 'right bottom' : 'right top',
+    isOpen: state.isOpen,
+  });
+
+  const { focusWithinProps } = useFocusWithin({
+    onFocusWithin: (e) => {
+      if (e.target.id === ref.current?.id) {
+        // If focussing on the trigger itself, set the menu id that is open
+        setMenuIdOpen(ref.current?.id);
+        state.open();
+      }
+    },
+    onBlurWithin: (e) => {
+      if (e.target?.getAttribute('role') === 'menuitem' && !overlayRef.current?.contains(e.relatedTarget)) {
+        // If it is blurring from a menuitem to an element outside the current overlay
+        // close the menu that is open
+        setMenuIdOpen(null);
+      }
+    },
+  });
+
   return (
     <div className={cx(styles.element, 'dropdown')} {...focusWithinProps} {...hoverProps}>
       {element}
       {state.isOpen && (
-        <NavBarItemMenuContext.Provider
-          value={{
-            menuProps,
-            menuHasFocus,
-            onClose: () => state.close(),
-            onLeft: () => {
-              setMenuHasFocus(false);
-              ref.current?.focus();
-            },
-          }}
-        >
-          <FocusScope restoreFocus>
-            <div {...overlayProps} {...dialogProps} ref={overlayRef}>
-              <DismissButton onDismiss={() => state.close()} />
-              {menu}
-              <DismissButton onDismiss={() => state.close()} />
-            </div>
-          </FocusScope>
-        </NavBarItemMenuContext.Provider>
+        <OverlayContainer>
+          <NavBarItemMenuContext.Provider
+            value={{
+              menuProps,
+              menuHasFocus,
+              onClose: () => state.close(),
+              onLeft: () => {
+                setMenuHasFocus(false);
+                ref.current?.focus();
+              },
+            }}
+          >
+            <FocusScope restoreFocus>
+              <div {...overlayProps} {...overlayPositionProps} {...dialogProps} {...hoverProps} ref={overlayRef}>
+                <DismissButton onDismiss={() => state.close()} />
+                {menu}
+                <DismissButton onDismiss={() => state.close()} />
+              </div>
+            </FocusScope>
+          </NavBarItemMenuContext.Provider>
+        </OverlayContainer>
       )}
     </div>
   );
diff --git a/public/app/core/components/NavBar/Next/NavBarItemWithoutMenu.tsx b/public/app/core/components/NavBar/Next/NavBarItemWithoutMenu.tsx
index f4de8e34142..35a700d6c1c 100644
--- a/public/app/core/components/NavBar/Next/NavBarItemWithoutMenu.tsx
+++ b/public/app/core/components/NavBar/Next/NavBarItemWithoutMenu.tsx
@@ -76,12 +76,6 @@ export function getNavBarItemWithoutMenuStyles(theme: GrafanaTheme2, isActive?:
       '&:hover': {
         backgroundColor: theme.colors.action.hover,
         color: theme.colors.text.primary,
-
-        // TODO don't use a hardcoded class here, use isVisible in NavBarDropdown
-        '.navbar-dropdown': {
-          opacity: 1,
-          visibility: 'visible',
-        },
       },
     }),
     element: css({
diff --git a/public/app/core/components/NavBar/Next/NavBarNext.tsx b/public/app/core/components/NavBar/Next/NavBarNext.tsx
index f5b2a1895c0..6a86d4b71d4 100644
--- a/public/app/core/components/NavBar/Next/NavBarNext.tsx
+++ b/public/app/core/components/NavBar/Next/NavBarNext.tsx
@@ -14,6 +14,8 @@ import { NavBarMenu } from './NavBarMenu';
 import NavBarItem from './NavBarItem';
 import { useSelector } from 'react-redux';
 import { NavBarItemWithoutMenu } from './NavBarItemWithoutMenu';
+import { FocusScope } from '@react-aria/focus';
+import { NavBarContext } from '../context';
 
 const onOpenSearch = () => {
   locationService.partial({ search: 'open' });
@@ -57,6 +59,7 @@ export const NavBarNext = React.memo(() => {
   );
   const activeItem = isSearchActive(location) ? searchItem : getActiveItem(navTree, location.pathname);
   const [menuOpen, setMenuOpen] = useState(false);
+  const [menuIdOpen, setMenuIdOpen] = useState<string | null>(null);
 
   if (kiosk !== KioskMode.Off) {
     return null;
@@ -65,55 +68,64 @@ export const NavBarNext = React.memo(() => {
   return (
     <div className={styles.navWrapper}>
       <nav className={cx(styles.sidemenu, 'sidemenu')} data-testid="sidemenu" aria-label="Main menu">
-        <div className={styles.mobileSidemenuLogo} onClick={() => setMenuOpen(!menuOpen)} key="hamburger">
-          <Icon name="bars" size="xl" />
-        </div>
+        <NavBarContext.Provider
+          value={{
+            menuIdOpen: menuIdOpen,
+            setMenuIdOpen: setMenuIdOpen,
+          }}
+        >
+          <FocusScope>
+            <div className={styles.mobileSidemenuLogo} onClick={() => setMenuOpen(!menuOpen)} key="hamburger">
+              <Icon name="bars" size="xl" />
+            </div>
 
-        <ul className={styles.itemList}>
-          <NavBarItemWithoutMenu
-            isActive={isMatchOrChildMatch(homeItem, activeItem)}
-            label="Home"
-            className={styles.grafanaLogo}
-            url={homeItem.url}
-          >
-            <Icon name="grafana" size="xl" />
-          </NavBarItemWithoutMenu>
-          <NavBarItem className={styles.search} isActive={activeItem === searchItem} link={searchItem}>
-            <Icon name="search" size="xl" />
-          </NavBarItem>
-
-          {coreItems.map((link, index) => (
-            <NavBarItem
-              key={`${link.id}-${index}`}
-              isActive={isMatchOrChildMatch(link, activeItem)}
-              link={{ ...link, subTitle: undefined, onClick: undefined }}
-            >
-              {link.icon && <Icon name={link.icon as IconName} size="xl" />}
-              {link.img && <img src={link.img} alt={`${link.text} logo`} />}
-            </NavBarItem>
-          ))}
-
-          {pluginItems.length > 0 &&
-            pluginItems.map((link, index) => (
-              <NavBarItem key={`${link.id}-${index}`} isActive={isMatchOrChildMatch(link, activeItem)} link={link}>
-                {link.icon && <Icon name={link.icon as IconName} size="xl" />}
-                {link.img && <img src={link.img} alt={`${link.text} logo`} />}
+            <ul className={styles.itemList}>
+              <NavBarItemWithoutMenu
+                isActive={isMatchOrChildMatch(homeItem, activeItem)}
+                label="Home"
+                className={styles.grafanaLogo}
+                url={homeItem.url}
+              >
+                <Icon name="grafana" size="xl" />
+              </NavBarItemWithoutMenu>
+              <NavBarItem className={styles.search} isActive={activeItem === searchItem} link={searchItem}>
+                <Icon name="search" size="xl" />
               </NavBarItem>
-            ))}
 
-          {configItems.map((link, index) => (
-            <NavBarItem
-              key={`${link.id}-${index}`}
-              isActive={isMatchOrChildMatch(link, activeItem)}
-              reverseMenuDirection
-              link={link}
-              className={cx({ [styles.verticalSpacer]: index === 0 })}
-            >
-              {link.icon && <Icon name={link.icon as IconName} size="xl" />}
-              {link.img && <img src={link.img} alt={`${link.text} logo`} />}
-            </NavBarItem>
-          ))}
-        </ul>
+              {coreItems.map((link, index) => (
+                <NavBarItem
+                  key={`${link.id}-${index}`}
+                  isActive={isMatchOrChildMatch(link, activeItem)}
+                  link={{ ...link, subTitle: undefined, onClick: undefined }}
+                >
+                  {link.icon && <Icon name={link.icon as IconName} size="xl" />}
+                  {link.img && <img src={link.img} alt={`${link.text} logo`} />}
+                </NavBarItem>
+              ))}
+
+              {pluginItems.length > 0 &&
+                pluginItems.map((link, index) => (
+                  <NavBarItem key={`${link.id}-${index}`} isActive={isMatchOrChildMatch(link, activeItem)} link={link}>
+                    {link.icon && <Icon name={link.icon as IconName} size="xl" />}
+                    {link.img && <img src={link.img} alt={`${link.text} logo`} />}
+                  </NavBarItem>
+                ))}
+
+              {configItems.map((link, index) => (
+                <NavBarItem
+                  key={`${link.id}-${index}`}
+                  isActive={isMatchOrChildMatch(link, activeItem)}
+                  reverseMenuDirection
+                  link={link}
+                  className={cx({ [styles.verticalSpacer]: index === 0 })}
+                >
+                  {link.icon && <Icon name={link.icon as IconName} size="xl" />}
+                  {link.img && <img src={link.img} alt={`${link.text} logo`} />}
+                </NavBarItem>
+              ))}
+            </ul>
+          </FocusScope>
+        </NavBarContext.Provider>
       </nav>
       {showSwitcherModal && <OrgSwitcher onDismiss={toggleSwitcherModal} />}
       <div className={styles.menuWrapper}>
diff --git a/public/app/core/components/NavBar/context.tsx b/public/app/core/components/NavBar/context.tsx
index e2c5b0c0759..2beb99d8ab6 100644
--- a/public/app/core/components/NavBar/context.tsx
+++ b/public/app/core/components/NavBar/context.tsx
@@ -16,3 +16,17 @@ export const NavBarItemMenuContext = createContext<NavBarItemMenuContextProps>({
 export function useNavBarItemMenuContext(): NavBarItemMenuContextProps {
   return useContext(NavBarItemMenuContext);
 }
+
+export interface NavBarContextProps {
+  menuIdOpen: string | null;
+  setMenuIdOpen: (id: string | null) => void;
+}
+
+export const NavBarContext = createContext<NavBarContextProps>({
+  menuIdOpen: null,
+  setMenuIdOpen: () => undefined,
+});
+
+export function useNavBarContext(): NavBarContextProps {
+  return useContext(NavBarContext);
+}