diff --git a/e2e/dashboard-new-layouts/dashboards-edit-adhoc-variables.spec.ts b/e2e/dashboard-new-layouts/dashboards-edit-adhoc-variables.spec.ts
new file mode 100644
index 00000000000..6a35cedbe9a
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+++ b/e2e/dashboard-new-layouts/dashboards-edit-adhoc-variables.spec.ts
@@ -0,0 +1,72 @@
+import { e2e } from '../utils';
+
+import { flows, Variable } from './dashboard-edit-flows';
+
+const PAGE_UNDER_TEST = 'kVi2Gex7z/test-variable-output';
+const DASHBOARD_NAME = 'Test variable output';
+
+describe('Dashboard edit - Ad hoc variables', () => {
+  beforeEach(() => {
+    e2e.flows.login(Cypress.env('USERNAME'), Cypress.env('PASSWORD'));
+  });
+
+  it('can add a new adhoc variable', () => {
+    e2e.pages.Dashboards.visit();
+
+    e2e.flows.openDashboard({ uid: `${PAGE_UNDER_TEST}?orgId=1` });
+    cy.contains(DASHBOARD_NAME).should('be.visible');
+
+    const variable: Variable = {
+      type: 'adhoc',
+      name: 'VariableUnderTest',
+      value: 'label1',
+      label: 'VariableUnderTest',
+    };
+
+    // common steps to add a new variable
+    flows.newEditPaneVariableClick();
+    flows.newEditPanelCommonVariableInputs(variable);
+
+    e2e.pages.Dashboard.Settings.Variables.Edit.AdHocFiltersVariable.datasourceSelect().should('be.visible').click();
+    const dataSource = 'gdev-loki';
+    cy.contains(dataSource).scrollIntoView().should('be.visible').click();
+
+    // mock the API call to get the labels
+    const labels = ['label1', 'label2'];
+    cy.intercept('GET', '**/resources/labels*', {
+      statusCode: 200,
+      body: {
+        status: 'success',
+        data: labels,
+      },
+    }).as('labels');
+
+    // select the variable in the dashboard and confirm the variable value is set
+    e2e.pages.Dashboard.SubMenu.submenuItem().should('be.visible').click();
+    e2e.pages.Dashboard.SubMenu.submenuItemLabels(variable.label).should('be.visible').contains(variable.label);
+
+    // mock the API call to get the label values
+    const labelValues = ['label2Value1'];
+    cy.intercept('GET', `**/resources/label/${labels[1]}/values*`, {
+      statusCode: 200,
+      body: {
+        status: 'success',
+        data: labelValues,
+      },
+    }).as('label-values');
+
+    // choose the label and value
+    cy.get('div[data-testid]').contains(labels[1]).click();
+    cy.get('div[data-testid]').contains('=').click();
+    cy.get('div[data-testid]').contains(labelValues[0]).click();
+    cy.focused().type('{esc}');
+
+    // assert the panel is visible and has the correct value
+    e2e.components.Panels.Panel.content()
+      .should('be.visible')
+      .first()
+      .within(() => {
+        cy.get('.markdown-html').should('include.text', `VariableUnderTest: ${labels[1]}="${labelValues[0]}"`);
+      });
+  });
+});