diff --git a/e2e-playwright/dashboard-new-layouts/dashboard-outline.spec.ts b/e2e-playwright/dashboard-new-layouts/dashboard-outline.spec.ts
index 49d55f8ca04..ef38379f006 100644
--- a/e2e-playwright/dashboard-new-layouts/dashboard-outline.spec.ts
+++ b/e2e-playwright/dashboard-new-layouts/dashboard-outline.spec.ts
@@ -22,8 +22,6 @@ test.describe(
 
       await dashboardPage.getByGrafanaSelector(selectors.components.NavToolbar.editDashboard.editButton).click();
 
-      await dashboardPage.getByGrafanaSelector(selectors.components.PanelEditor.Outline.section).click();
-
       // Should be able to click Variables item in outline to see add variable button
       await dashboardPage.getByGrafanaSelector(selectors.components.PanelEditor.Outline.item('Variables')).click();
       await expect(
diff --git a/e2e-playwright/dashboard-new-layouts/dashboards-edit-custom-variables.spec.ts b/e2e-playwright/dashboard-new-layouts/dashboards-edit-custom-variables.spec.ts
index ce5465c1e33..24c61e5e960 100644
--- a/e2e-playwright/dashboard-new-layouts/dashboards-edit-custom-variables.spec.ts
+++ b/e2e-playwright/dashboard-new-layouts/dashboards-edit-custom-variables.spec.ts
@@ -199,7 +199,6 @@ test.describe(
         .click();
 
       // Open the modal editor in the side pane
-      await dashboardPage.getByGrafanaSelector(selectors.components.PanelEditor.Outline.section).click();
       await dashboardPage.getByGrafanaSelector(selectors.components.PanelEditor.Outline.node('Variables')).click();
       await dashboardPage.getByGrafanaSelector(selectors.components.PanelEditor.Outline.item('foo')).click();
       await openModal(dashboardPage, selectors);
diff --git a/e2e-playwright/dashboard-new-layouts/utils.ts b/e2e-playwright/dashboard-new-layouts/utils.ts
index c59f782b37a..da629ac8141 100644
--- a/e2e-playwright/dashboard-new-layouts/utils.ts
+++ b/e2e-playwright/dashboard-new-layouts/utils.ts
@@ -48,7 +48,6 @@ export const flows = {
   },
   async newEditPaneVariableClick(dashboardPage: DashboardPage, selectors: E2ESelectorGroups) {
     await dashboardPage.getByGrafanaSelector(selectors.components.NavToolbar.editDashboard.editButton).click();
-    await dashboardPage.getByGrafanaSelector(selectors.components.PanelEditor.Outline.section).click();
     await dashboardPage.getByGrafanaSelector(selectors.components.PanelEditor.Outline.item('Variables')).click();
     await dashboardPage
       .getByGrafanaSelector(selectors.components.PanelEditor.ElementEditPane.addVariableButton)
diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx
index c2e896fce83..9ca7fbab86e 100644
--- a/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx
+++ b/public/app/features/dashboard-scene/edit-pane/DashboardEditPaneRenderer.tsx
@@ -35,7 +35,7 @@ export function DashboardEditPaneRenderer({ editPane, isEditPaneCollapsed, onTog
   const isNewElement = selection?.isNewElement() ?? false;
   const [outlineCollapsed, setOutlineCollapsed] = useLocalStorage(
     'grafana.dashboard.edit-pane.outline.collapsed',
-    true
+    false
   );
   const [outlinePaneSize = 0.4, setOutlinePaneSize] = useLocalStorage('grafana.dashboard.edit-pane.outline.size', 0.4);
 
diff --git a/public/app/features/dashboard-scene/scene/NavToolbarActions.test.tsx b/public/app/features/dashboard-scene/scene/NavToolbarActions.test.tsx
index e42df99d74a..e276bf80e46 100644
--- a/public/app/features/dashboard-scene/scene/NavToolbarActions.test.tsx
+++ b/public/app/features/dashboard-scene/scene/NavToolbarActions.test.tsx
@@ -162,7 +162,7 @@ describe('NavToolbarActions', () => {
         await userEvent.click(await screen.findByTestId(selectors.components.NavToolbar.editDashboard.editButton));
         expect(DashboardInteractions.editButtonClicked).toHaveBeenCalledWith({
           dashboardUid: 'dash-1',
-          outlineExpanded: false,
+          outlineExpanded: true,
         });
       });
 
diff --git a/public/app/features/dashboard-scene/scene/new-toolbar/actions/EditDashboardSwitch.test.tsx b/public/app/features/dashboard-scene/scene/new-toolbar/actions/EditDashboardSwitch.test.tsx
index 583a3da8818..e941c98cadb 100644
--- a/public/app/features/dashboard-scene/scene/new-toolbar/actions/EditDashboardSwitch.test.tsx
+++ b/public/app/features/dashboard-scene/scene/new-toolbar/actions/EditDashboardSwitch.test.tsx
@@ -58,7 +58,7 @@ describe('EditDashboardSwitch', () => {
     it('should call DashboardInteractions.editButtonClicked with outlineExpanded:true if grafana.dashboard.edit-pane.outline.collapsed is undefined', async () => {
       render(<EditDashboardSwitch dashboard={buildTestScene()} />);
       await userEvent.click(await screen.findByTestId(selectors.components.NavToolbar.editDashboard.editButton));
-      expect(DashboardInteractions.editButtonClicked).toHaveBeenCalledWith({ outlineExpanded: false });
+      expect(DashboardInteractions.editButtonClicked).toHaveBeenCalledWith({ outlineExpanded: true });
     });
 
     it('should call DashboardInteractions.editButtonClicked with outlineExpanded:true if grafana.dashboard.edit-pane.outline.collapsed is false', async () => {
diff --git a/public/app/features/dashboard-scene/scene/new-toolbar/actions/MakeDashboardEditableButton.test.tsx b/public/app/features/dashboard-scene/scene/new-toolbar/actions/MakeDashboardEditableButton.test.tsx
index 05ce93adde1..87788a2b187 100644
--- a/public/app/features/dashboard-scene/scene/new-toolbar/actions/MakeDashboardEditableButton.test.tsx
+++ b/public/app/features/dashboard-scene/scene/new-toolbar/actions/MakeDashboardEditableButton.test.tsx
@@ -59,7 +59,7 @@ describe('MakeDashboardEditableButton', () => {
     it('should call DashboardInteractions.editButtonClicked with outlineExpanded:true if grafana.dashboard.edit-pane.outline.collapsed is undefined', async () => {
       render(<MakeDashboardEditableButton dashboard={buildTestScene()} />);
       await userEvent.click(await screen.findByTestId(selectors.components.NavToolbar.editDashboard.editButton));
-      expect(DashboardInteractions.editButtonClicked).toHaveBeenCalledWith({ outlineExpanded: false });
+      expect(DashboardInteractions.editButtonClicked).toHaveBeenCalledWith({ outlineExpanded: true });
     });
 
     it('should call DashboardInteractions.editButtonClicked with outlineExpanded:true if grafana.dashboard.edit-pane.outline.collapsed is false', async () => {
diff --git a/public/app/features/dashboard-scene/utils/tracking.ts b/public/app/features/dashboard-scene/utils/tracking.ts
index fde95ce2ead..638f5bd781b 100644
--- a/public/app/features/dashboard-scene/utils/tracking.ts
+++ b/public/app/features/dashboard-scene/utils/tracking.ts
@@ -46,7 +46,7 @@ export const trackDeleteDashboardElement = (element: EditableDashboardElementInf
 
 export const trackDashboardSceneEditButtonClicked = (dashboardUid?: string) => {
   DashboardInteractions.editButtonClicked({
-    outlineExpanded: !store.getBool('grafana.dashboard.edit-pane.outline.collapsed', true),
+    outlineExpanded: !store.getBool('grafana.dashboard.edit-pane.outline.collapsed', false),
     dashboardUid,
   });
 };