diff --git a/e2e/dashboards-edit-v2-suite/dashboards-edit-variables.spec.ts b/e2e/dashboards-edit-v2-suite/dashboards-edit-variables.spec.ts
new file mode 100644
index 00000000000..e6f15f8e2e5
--- /dev/null
+++ b/e2e/dashboards-edit-v2-suite/dashboards-edit-variables.spec.ts
@@ -0,0 +1,60 @@
+import { e2e } from '../utils';
+
+const PAGE_UNDER_TEST = 'kVi2Gex7z/test-variable-output';
+const DASHBOARD_NAME = 'Test variable output';
+
+describe('Dashboard edit variables', () => {
+  beforeEach(() => {
+    e2e.flows.login(Cypress.env('USERNAME'), Cypress.env('PASSWORD'));
+  });
+
+  it('can add a new custom 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: 'custom',
+      name: 'foo',
+      label: 'Foo',
+      value: 'one,two,three',
+    };
+
+    // common steps to add a new variable
+    flows.newEditPaneVariableClick();
+    flows.newEditPanelCommonVariableInputs(variable);
+
+    // set the custom variable value
+    e2e.pages.Dashboard.Settings.Variables.Edit.CustomVariable.customValueInput().clear().type(variable.value).blur();
+
+    // assert the dropdown for the variable is visible and has the correct values
+    e2e.pages.Dashboard.SubMenu.submenuItemLabels(variable.label).should('be.visible').contains(variable.label);
+    const values = variable.value.split(',');
+    e2e.pages.Dashboard.SubMenu.submenuItemValueDropDownValueLinkTexts(values[0]).should('be.visible');
+  });
+});
+
+// Common flows for adding/editing variables
+// TODO: maybe move to e2e flows
+const flows = {
+  newEditPaneVariableClick() {
+    e2e.components.NavToolbar.editDashboard.editButton().should('be.visible').click();
+    e2e.components.PanelEditor.Outline.section().should('be.visible').click();
+    e2e.components.PanelEditor.Outline.item('Variables').should('be.visible').click();
+    e2e.components.PanelEditor.ElementEditPane.addVariableButton().should('be.visible').click();
+  },
+  newEditPanelCommonVariableInputs(variable: Variable) {
+    e2e.components.PanelEditor.ElementEditPane.variableType(variable.type).should('be.visible').click();
+    e2e.components.PanelEditor.ElementEditPane.variableNameInput().clear().type(variable.name).blur();
+    e2e.components.PanelEditor.ElementEditPane.variableLabelInput().clear().type(variable.label).blur();
+  },
+};
+
+type Variable = {
+  type: string;
+  name: string;
+  label: string;
+  description?: string;
+  value: string;
+};
diff --git a/e2e/run-suite b/e2e/run-suite
index 28ed2f6bd8d..c5d1f896a35 100755
--- a/e2e/run-suite
+++ b/e2e/run-suite
@@ -30,6 +30,7 @@ rootForEnterpriseSuite="./e2e/extensions-suite"
 rootForOldArch="./e2e/old-arch"
 rootForKubernetesDashboards="./e2e/dashboards-suite"
 rootForSearchDashboards="./e2e/dashboards-search-suite"
+rootForEditDashboards="./e2e/dashboards-edit-v2-suite"
 
 declare -A cypressConfig=(
   [screenshotsFolder]=./e2e/"${args[0]}"/screenshots
@@ -149,6 +150,25 @@ case "$1" in
                 ;;
           esac
       ;;
+      "dashboards-edit-v2")
+      env[kubernetesDashboards]=true
+      env[dashboardNewLayouts]=true
+      cypressConfig[specPattern]=$rootForEditDashboards/$testFilesForSingleSuite
+      cypressConfig[video]=false
+          case "$2" in
+            "debug")
+                echo -e "Debug mode"
+                env[SLOWMO]=1
+                PARAMS="--no-exit"
+                enterpriseSuite=$(basename "${args[2]}")
+                ;;
+            "dev")
+                echo "Dev mode"
+                CMD="cypress open"
+                enterpriseSuite=$(basename "${args[2]}")
+                ;;
+          esac
+      ;;
    "enterprise-smtp")
       env[SMTP_PLUGIN_ENABLED]=true
       cypressConfig[specPattern]=./e2e/extensions/enterprise/smtp-suite/$testFilesForSingleSuite
diff --git a/package.json b/package.json
index 1fb6e4e45f5..6251c0d989f 100644
--- a/package.json
+++ b/package.json
@@ -14,6 +14,8 @@
     "e2e:old-arch": "./e2e/start-and-run-suite old-arch",
     "e2e:schema-v2": "./e2e/start-and-run-suite dashboards-schema-v2",
     "e2e:dashboards-search": "./e2e/start-and-run-suite dashboards-search",
+    "e2e:dashboards-edit-v2": "./e2e/start-and-run-suite dashboards-edit-v2",
+    "e2e:dashboards-edit-v2:dev": "./e2e/start-and-run-suite dashboards-edit-v2 dev",
     "e2e:debug": "./e2e/start-and-run-suite debug",
     "e2e:dev": "./e2e/start-and-run-suite dev",
     "e2e:benchmark:live": "./e2e/start-and-run-suite benchmark live",
diff --git a/packages/grafana-e2e-selectors/src/selectors/components.ts b/packages/grafana-e2e-selectors/src/selectors/components.ts
index 1d708a77a14..df16879214a 100644
--- a/packages/grafana-e2e-selectors/src/selectors/components.ts
+++ b/packages/grafana-e2e-selectors/src/selectors/components.ts
@@ -532,6 +532,33 @@ export const versionedComponents = {
     measureButton: {
       '9.2.0': 'show measure tools',
     },
+
+    Outline: {
+      section: {
+        '12.0.0': 'data-testid Outline section',
+      },
+      node: {
+        '12.0.0': (type: string) => `data-testid outline node ${type}`,
+      },
+      item: {
+        '12.0.0': (type: string) => `data-testid outline item ${type}`,
+      },
+    },
+
+    ElementEditPane: {
+      variableType: {
+        '12.0.0': (type?: string) => `data-testid variable type ${type}`,
+      },
+      addVariableButton: {
+        '12.0.0': 'data-testid add variable button',
+      },
+      variableNameInput: {
+        '12.0.0': 'data-testid variable name input',
+      },
+      variableLabelInput: {
+        '12.0.0': 'data-testid variable label input',
+      },
+    },
   },
   PanelInspector: {
     Data: {
diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
index a667b877357..490ac81bd09 100644
--- a/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
+++ b/public/app/features/dashboard-scene/edit-pane/DashboardEditPane.tsx
@@ -3,6 +3,7 @@ import { Resizable } from 're-resizable';
 import { useLocalStorage } from 'react-use';
 
 import { GrafanaTheme2 } from '@grafana/data';
+import { selectors } from '@grafana/e2e-selectors';
 import { SceneObjectState, SceneObjectBase, SceneObject, sceneGraph, useSceneObjectState } from '@grafana/scenes';
 import {
   ElementSelectionContextItem,
@@ -272,11 +273,12 @@ export function DashboardEditPaneRenderer({ editPane, isCollapsed, onToggleColla
             role="button"
             onClick={() => setOutlineCollapsed(!outlineCollapsed)}
             className={styles.outlineCollapseButton}
+            data-testid={selectors.components.PanelEditor.Outline.section}
           >
             <Text weight="medium">
               <Trans i18nKey="dashboard-scene.dashboard-edit-pane-renderer.outline">Outline</Trans>
             </Text>
-            <Icon name="angle-up" />
+            <Icon name={outlineCollapsed ? 'angle-up' : 'angle-down'} />
           </div>
           {!outlineCollapsed && (
             <div className={styles.outlineContainer}>
diff --git a/public/app/features/dashboard-scene/edit-pane/DashboardOutline.tsx b/public/app/features/dashboard-scene/edit-pane/DashboardOutline.tsx
index 58076081f00..725714df3d8 100644
--- a/public/app/features/dashboard-scene/edit-pane/DashboardOutline.tsx
+++ b/public/app/features/dashboard-scene/edit-pane/DashboardOutline.tsx
@@ -3,6 +3,7 @@ import { sortBy } from 'lodash';
 import React, { useEffect, useMemo, useState } from 'react';
 
 import { GrafanaTheme2 } from '@grafana/data';
+import { selectors } from '@grafana/e2e-selectors';
 import { SceneObject } from '@grafana/scenes';
 import { Box, Icon, Text, useElementSelection, useStyles2, useTheme2 } from '@grafana/ui';
 import { t, Trans } from 'app/core/internationalization';
@@ -88,7 +89,12 @@ function DashboardOutlineNode({
         onPointerDown={onNodeClicked}
       >
         {elementInfo.isContainer && (
-          <button role="treeitem" className={styles.angleButton} onPointerDown={onToggleCollapse}>
+          <button
+            role="treeitem"
+            className={styles.angleButton}
+            onPointerDown={onToggleCollapse}
+            data-testid={selectors.components.PanelEditor.Outline.node(instanceName)}
+          >
             <Icon name={!isCollapsed ? 'angle-down' : 'angle-right'} />
           </button>
         )}
@@ -96,6 +102,7 @@ function DashboardOutlineNode({
           role="button"
           className={cx(styles.nodeName, isCloned && styles.nodeNameClone)}
           onDoubleClick={outlineRename.onNameDoubleClicked}
+          data-testid={selectors.components.PanelEditor.Outline.item(instanceName)}
         >
           <Icon size="sm" name={elementInfo.icon} />
           {outlineRename.isRenaming ? (
diff --git a/public/app/features/dashboard-scene/scene/new-toolbar/actions/ToolbarSwitch.tsx b/public/app/features/dashboard-scene/scene/new-toolbar/actions/ToolbarSwitch.tsx
index bd693d10e09..c057a50be2b 100644
--- a/public/app/features/dashboard-scene/scene/new-toolbar/actions/ToolbarSwitch.tsx
+++ b/public/app/features/dashboard-scene/scene/new-toolbar/actions/ToolbarSwitch.tsx
@@ -11,7 +11,7 @@ interface Props {
   checkedIcon?: IconName;
   checkedLabel?: string;
   disabled?: boolean;
-  'data-testId'?: string;
+  'data-testid'?: string;
   onClick: (evt: MouseEvent<HTMLDivElement>) => void;
 }
 
@@ -23,7 +23,7 @@ export const ToolbarSwitch = ({
   checkedLabel,
   disabled,
   onClick,
-  'data-testId': dataTestId,
+  'data-testid': dataTestId,
 }: Props) => {
   const styles = useStyles2(getStyles);
 
diff --git a/public/app/features/dashboard-scene/settings/variables/VariableEditableElement.tsx b/public/app/features/dashboard-scene/settings/variables/VariableEditableElement.tsx
index 213557fc8c4..2a639a2e5c8 100644
--- a/public/app/features/dashboard-scene/settings/variables/VariableEditableElement.tsx
+++ b/public/app/features/dashboard-scene/settings/variables/VariableEditableElement.tsx
@@ -1,6 +1,7 @@
 import { FormEvent, useMemo, useState } from 'react';
 
 import { VariableHide } from '@grafana/data';
+import { selectors } from '@grafana/e2e-selectors';
 import { locationService } from '@grafana/runtime';
 import { LocalValueVariable, MultiValueVariable, SceneVariable, SceneVariableSet } from '@grafana/scenes';
 import { Input, TextArea, Button, Field, Box, Stack } from '@grafana/ui';
@@ -143,14 +144,27 @@ function VariableNameInput({ variable, isNewElement }: { variable: SceneVariable
 
   return (
     <Field label={t('dashboard.edit-pane.variable.name', 'Name')} invalid={!!nameError} error={nameError}>
-      <Input ref={ref} value={name} onChange={onChange} required onBlur={onBlur} />
+      <Input
+        ref={ref}
+        value={name}
+        onChange={onChange}
+        required
+        onBlur={onBlur}
+        data-testid={selectors.components.PanelEditor.ElementEditPane.variableNameInput}
+      />
     </Field>
   );
 }
 
 function VariableLabelInput({ variable }: VariableInputProps) {
   const { label } = variable.useState();
-  return <Input value={label} onChange={(e) => variable.setState({ label: e.currentTarget.value })} />;
+  return (
+    <Input
+      value={label}
+      onChange={(e) => variable.setState({ label: e.currentTarget.value })}
+      data-testid={selectors.components.PanelEditor.ElementEditPane.variableLabelInput}
+    />
+  );
 }
 
 function VariableDescriptionTextArea({ variable }: VariableInputProps) {
diff --git a/public/app/features/dashboard-scene/settings/variables/VariableSetEditableElement.tsx b/public/app/features/dashboard-scene/settings/variables/VariableSetEditableElement.tsx
index 442f7c58b47..b52127ad95b 100644
--- a/public/app/features/dashboard-scene/settings/variables/VariableSetEditableElement.tsx
+++ b/public/app/features/dashboard-scene/settings/variables/VariableSetEditableElement.tsx
@@ -3,6 +3,7 @@ import { useMemo } from 'react';
 import { useToggle } from 'react-use';
 
 import { GrafanaTheme2 } from '@grafana/data';
+import { selectors } from '@grafana/e2e-selectors';
 import { SceneVariable, SceneVariableSet } from '@grafana/scenes';
 import { Stack, Button, useStyles2, Text, Box, Card } from '@grafana/ui';
 import { t, Trans } from 'app/core/internationalization';
@@ -87,7 +88,14 @@ function VariableList({ set }: { set: SceneVariableSet }) {
       ))}
       {canAdd && (
         <Box paddingBottom={1} display={'flex'}>
-          <Button fullWidth icon="plus" size="sm" variant="secondary" onClick={setIsAdding}>
+          <Button
+            fullWidth
+            icon="plus"
+            size="sm"
+            variant="secondary"
+            onClick={setIsAdding}
+            data-testid={selectors.components.PanelEditor.ElementEditPane.addVariableButton}
+          >
             <Trans i18nKey="dashboard.edit-pane.variables.add-variable">Add variable</Trans>
           </Button>
         </Box>
@@ -115,6 +123,7 @@ function VariableTypeSelection({ onAddVariable }: VariableTypeSelectionProps) {
           onClick={() => onAddVariable(option.value!)}
           key={option.value}
           title={t('dashboard.edit-pane.variables.select-type-card-tooltip', 'Click to select type')}
+          data-testid={selectors.components.PanelEditor.ElementEditPane.variableType(option.value!)}
         >
           <Card.Heading>{option.label}</Card.Heading>
           <Card.Description className={styles.cardDescription}>{option.description}</Card.Description>