diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardAddPane.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardAddPane.tsx
deleted file mode 100644
index 1edf168e6de..00000000000
--- a/public/app/features/dashboard-scene/edit-pane/DashboardAddPane.tsx
+++ /dev/null
@@ -1,105 +0,0 @@
-import { css } from '@emotion/css';
-
-import { GrafanaTheme2 } from '@grafana/data';
-import { selectors } from '@grafana/e2e-selectors';
-import { Box, Card, Icon, IconButton, IconName, useStyles2 } from '@grafana/ui';
-import { t } from 'app/core/internationalization';
-
-import { DashboardInteractions } from '../utils/interactions';
-import { getDashboardSceneFor } from '../utils/utils';
-
-import { DashboardEditPane } from './DashboardEditPane';
-
-export interface Props {
-  editPane: DashboardEditPane;
-}
-
-interface CardConfig {
-  icon: IconName;
-  heading: string;
-  title: string;
-  testId: string;
-  onClick: () => void;
-  hide?: boolean;
-}
-
-export function DashboardAddPane({ editPane }: Props) {
-  const styles = useStyles2(getStyles);
-  const dashboard = getDashboardSceneFor(editPane);
-
-  const cards: CardConfig[] = [
-    {
-      icon: 'graph-bar',
-      heading: t('dashboard.edit-pane.add.panel.heading', 'Panel'),
-      title: t('dashboard.edit-pane.add.panel.title', 'A container for visualizations and other content'),
-      testId: selectors.components.PageToolbar.itemButton('add_visualization'),
-      onClick: () => dashboard.onCreateNewPanel(),
-    },
-    {
-      icon: 'import',
-      heading: t('dashboard.edit-pane.add.lib-panel.heading', 'Library panel'),
-      title: t(
-        'dashboard.edit-pane.add.lib-panel.title',
-        'Library panels allow you share and reuse panels between dashboards'
-      ),
-      testId: selectors.pages.AddDashboard.itemButton('Add new panel from panel library menu item'),
-      onClick: () => {
-        dashboard.onShowAddLibraryPanelDrawer();
-        DashboardInteractions.toolbarAddButtonClicked({ item: 'add_library_panel' });
-      },
-    },
-    {
-      icon: 'list-ul',
-      heading: t('dashboard.edit-pane.add.row.heading', 'Row'),
-      title: t('dashboard.edit-pane.add.row.title', 'A group of panels with an optional header'),
-      testId: selectors.components.PageToolbar.itemButton('add_row'),
-      onClick: () => dashboard.onCreateNewRow(),
-    },
-    {
-      icon: 'layer-group',
-      heading: t('dashboard.edit-pane.add.tab.heading', 'Tab'),
-      title: t('dashboard.edit-pane.add.tab.title', 'Break up your dashboard into different horizontal tabs'),
-      testId: selectors.components.PageToolbar.itemButton('add_tab'),
-      onClick: () => dashboard.onCreateNewTab(),
-    },
-  ];
-
-  return (
-    <>
-      <div className={styles.header}>
-        <IconButton
-          name="arrow-left"
-          size="lg"
-          onClick={() => editPane.toggleAddPane()}
-          aria-label={t('dashboard-scene.dashboard-add-pane.aria-label-close-add-pane', 'Close add pane')}
-        />
-        {t('dashboard.edit-pane.add.title', 'Add element')}
-      </div>
-      <Box display="flex" direction="column" gap={1} padding={2}>
-        {cards.map(({ icon, heading, title, testId, onClick, hide }) =>
-          hide ? null : (
-            <Card onClick={onClick} data-testid={testId} title={title} key={title}>
-              <Card.Heading>{heading}</Card.Heading>
-              <Card.Figure className={styles.figure}>
-                <Icon name={icon} size="xl" />
-              </Card.Figure>
-            </Card>
-          )
-        )}
-      </Box>
-    </>
-  );
-}
-
-const getStyles = (theme: GrafanaTheme2) => ({
-  header: css({
-    display: 'flex',
-    alignItems: 'center',
-    padding: theme.spacing(1, 2),
-    gap: theme.spacing(1),
-    borderBottom: `1px solid ${theme.colors.border.weak}`,
-  }),
-  figure: css({
-    pointerEvents: 'none',
-  }),
-});
diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
index d1f88d9922b..c8393493ef2 100644
--- a/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
+++ b/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
@@ -21,7 +21,6 @@ import { t, Trans } from 'app/core/internationalization';
 import { isInCloneChain } from '../utils/clone';
 import { getDashboardSceneFor } from '../utils/utils';
 
-import { DashboardAddPane } from './DashboardAddPane';
 import { DashboardOutline } from './DashboardOutline';
 import { ElementEditPane } from './ElementEditPane';
 import { ElementSelection } from './ElementSelection';
@@ -31,7 +30,6 @@ import { useEditableElement } from './useEditableElement';
 export interface DashboardEditPaneState extends SceneObjectState {
   selection?: ElementSelection;
   selectionContext: ElementSelectionContextState;
-  showAddPane?: boolean;
 }
 
 export class DashboardEditPane extends SceneObjectBase<DashboardEditPaneState> {
@@ -103,10 +101,6 @@ export class DashboardEditPane extends SceneObjectBase<DashboardEditPaneState> {
     return this.state.selection?.getSelection();
   }
 
-  public toggleAddPane() {
-    this.setState({ showAddPane: !this.state.showAddPane });
-  }
-
   public selectObject(obj: SceneObject, id: string, { multi, force }: ElementSelectionOnSelectOptions = {}) {
     if (!force) {
       if (multi) {
@@ -132,7 +126,6 @@ export class DashboardEditPane extends SceneObjectBase<DashboardEditPaneState> {
         ...this.state.selectionContext,
         selected,
       },
-      showAddPane: false,
     });
   }
 
@@ -173,10 +166,6 @@ export class DashboardEditPane extends SceneObjectBase<DashboardEditPaneState> {
 
   private newObjectAddedToCanvas(obj: SceneObject) {
     this.selectObject(obj, obj.state.key!);
-
-    if (this.state.showAddPane) {
-      this.setState({ showAddPane: false });
-    }
   }
 }
 
@@ -206,7 +195,7 @@ export function DashboardEditPaneRenderer({ editPane, isCollapsed, onToggleColla
     }
   }, [editPane, isCollapsed]);
 
-  const { selection, showAddPane } = useSceneObjectState(editPane, { shouldActivateOrKeepAlive: true });
+  const { selection } = useSceneObjectState(editPane, { shouldActivateOrKeepAlive: true });
   const styles = useStyles2(getStyles);
   const editableElement = useEditableElement(selection, editPane);
   const selectedObject = selection?.getFirstObject();
@@ -266,14 +255,6 @@ export function DashboardEditPaneRenderer({ editPane, isCollapsed, onToggleColla
     splitter.secondaryProps.style.minHeight = 'unset';
   }
 
-  if (showAddPane) {
-    return (
-      <div className={styles.wrapper}>
-        <DashboardAddPane editPane={editPane} />
-      </div>
-    );
-  }
-
   return (
     <div className={styles.wrapper}>
       <div {...splitter.containerProps}>
diff --git a/public/app/features/dashboard-scene/scene/new-toolbar/actions/DashboardAddButton.tsx b/public/app/features/dashboard-scene/scene/new-toolbar/actions/DashboardAddButton.tsx
index 41104d28c31..db6df0067d9 100644
--- a/public/app/features/dashboard-scene/scene/new-toolbar/actions/DashboardAddButton.tsx
+++ b/public/app/features/dashboard-scene/scene/new-toolbar/actions/DashboardAddButton.tsx
@@ -1,21 +1,55 @@
 import { selectors } from '@grafana/e2e-selectors';
-import { Button } from '@grafana/ui';
+import { Button, Dropdown, Menu } from '@grafana/ui';
 import { t, Trans } from 'app/core/internationalization';
 
+import { DashboardInteractions } from '../../../utils/interactions';
 import { ToolbarActionProps } from '../types';
 
 export function DashboardAddButton({ dashboard }: ToolbarActionProps) {
   return (
-    <Button
-      tooltip={t('dashboard.toolbar.add-new.tooltip', 'Add panels and other elements')}
-      icon="plus"
-      onClick={() => dashboard.state.editPane.toggleAddPane()}
-      variant="primary"
-      size="sm"
-      fill="outline"
-      data-testid={selectors.components.PageToolbar.itemButton('Add button')}
+    <Dropdown
+      overlay={
+        <Menu>
+          <Menu.Item
+            icon="graph-bar"
+            label={t('dashboard.toolbar.add-new.menu.panel', 'Panel')}
+            testId={selectors.components.PageToolbar.itemButton('add_visualization')}
+            onClick={() => dashboard.onCreateNewPanel()}
+          />
+          <Menu.Item
+            icon="import"
+            label={t('dashboard.toolbar.add-new.menu.lib-panel', 'Library panel')}
+            testId={selectors.pages.AddDashboard.itemButton('Add new panel from panel library menu item')}
+            onClick={() => {
+              dashboard.onShowAddLibraryPanelDrawer();
+              DashboardInteractions.toolbarAddButtonClicked({ item: 'add_library_panel' });
+            }}
+          />
+          <Menu.Item
+            icon="list-ul"
+            label={t('dashboard.toolbar.add-new.menu.row', 'Row')}
+            testId={selectors.components.PageToolbar.itemButton('add_row')}
+            onClick={() => dashboard.onCreateNewRow()}
+          />
+          <Menu.Item
+            icon="layer-group"
+            label={t('dashboard.toolbar.add-new.menu.tab', 'Tab')}
+            testId={selectors.components.PageToolbar.itemButton('add_tab')}
+            onClick={() => dashboard.onCreateNewTab()}
+          />
+        </Menu>
+      }
     >
-      <Trans i18nKey="dashboard.toolbar.add">Add</Trans>
-    </Button>
+      <Button
+        tooltip={t('dashboard.toolbar.add-new.button.tooltip', 'Add panels and other elements')}
+        icon="plus"
+        variant="primary"
+        size="sm"
+        fill="outline"
+        data-testid={selectors.components.PageToolbar.itemButton('Add button')}
+      >
+        <Trans i18nKey="dashboard.toolbar.add-new.button.label">Add</Trans>
+      </Button>
+    </Dropdown>
   );
 }
diff --git a/public/locales/en-US/grafana.json b/public/locales/en-US/grafana.json
index eb74f4a20b1..672a329ba3b 100644
--- a/public/locales/en-US/grafana.json
+++ b/public/locales/en-US/grafana.json
@@ -1517,25 +1517,6 @@
       }
     },
     "edit-pane": {
-      "add": {
-        "lib-panel": {
-          "heading": "Library panel",
-          "title": "Library panels allow you share and reuse panels between dashboards"
-        },
-        "panel": {
-          "heading": "Panel",
-          "title": "A container for visualizations and other content"
-        },
-        "row": {
-          "heading": "Row",
-          "title": "A group of panels with an optional header"
-        },
-        "tab": {
-          "heading": "Tab",
-          "title": "Break up your dashboard into different horizontal tabs"
-        },
-        "title": "Add element"
-      },
       "elements": {
         "dashboard": "Dashboard",
         "objects": "Objects",
@@ -1695,7 +1676,16 @@
     "toolbar": {
       "add": "Add",
       "add-new": {
-        "tooltip": "Add panels and other elements"
+        "button": {
+          "label": "Add",
+          "tooltip": "Add panels and other elements"
+        },
+        "menu": {
+          "lib-panel": "Library panel",
+          "panel": "Panel",
+          "row": "Row",
+          "tab": "Tab"
+        }
       },
       "alert-rules": "Alert rules",
       "back-to-dashboard": "Back to dashboard",
@@ -1904,9 +1894,6 @@
       "custom-options": "Custom options",
       "selection-options": "Selection options"
     },
-    "dashboard-add-pane": {
-      "aria-label-close-add-pane": "Close add pane"
-    },
     "dashboard-edit-pane-renderer": {
       "outline": "Outline"
     },