diff --git a/packages/grafana-e2e-selectors/src/selectors/components.ts b/packages/grafana-e2e-selectors/src/selectors/components.ts
index 3d1266e649a..069c69d4a30 100644
--- a/packages/grafana-e2e-selectors/src/selectors/components.ts
+++ b/packages/grafana-e2e-selectors/src/selectors/components.ts
@@ -15,6 +15,7 @@ export const Components = {
   },
   TimePicker: {
     openButton: 'data-testid TimePicker Open Button',
+    overlayContent: 'data-testid TimePicker Overlay Content',
     fromField: 'Time Range from field',
     toField: 'Time Range to field',
     applyTimeRange: 'data-testid TimePicker submit button',
diff --git a/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.test.tsx b/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.test.tsx
index fcbdb834914..13b46255d37 100644
--- a/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.test.tsx
+++ b/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.test.tsx
@@ -1,10 +1,14 @@
-import { render } from '@testing-library/react';
+import { render, screen } from '@testing-library/react';
+import userEvent from '@testing-library/user-event';
 import React from 'react';
 
 import { dateTime, TimeRange } from '@grafana/data';
+import { selectors as e2eSelectors } from '@grafana/e2e-selectors';
 
 import { TimeRangePicker } from './TimeRangePicker';
 
+const selectors = e2eSelectors.components.TimePicker;
+
 const from = dateTime('2019-12-17T07:48:27.433Z');
 const to = dateTime('2019-12-18T07:48:27.433Z');
 
@@ -29,4 +33,25 @@ describe('TimePicker', () => {
 
     expect(container.queryByLabelText(/Time range selected/i)).toBeInTheDocument();
   });
+  it('switches overlay content visibility when toolbar button is clicked twice', async () => {
+    render(
+      <TimeRangePicker
+        onChangeTimeZone={() => {}}
+        onChange={(value) => {}}
+        value={value}
+        onMoveBackward={() => {}}
+        onMoveForward={() => {}}
+        onZoom={() => {}}
+      />
+    );
+
+    const openButton = screen.getByTestId(selectors.openButton);
+    const overlayContent = screen.queryByTestId(selectors.overlayContent);
+
+    expect(overlayContent).not.toBeInTheDocument();
+    await userEvent.click(openButton);
+    expect(screen.getByTestId(selectors.overlayContent)).toBeInTheDocument();
+    await userEvent.click(openButton);
+    expect(overlayContent).not.toBeInTheDocument();
+  });
 });
diff --git a/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.tsx b/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.tsx
index 1ce6ba3627e..8f6640fc32c 100644
--- a/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.tsx
+++ b/packages/grafana-ui/src/components/DateTimePickers/TimeRangePicker.tsx
@@ -2,7 +2,7 @@ import { css, cx } from '@emotion/css';
 import { useDialog } from '@react-aria/dialog';
 import { FocusScope } from '@react-aria/focus';
 import { useOverlay } from '@react-aria/overlays';
-import React, { memo, FormEvent, createRef, useState } from 'react';
+import React, { memo, createRef, useState } from 'react';
 
 import {
   isDateTime,
@@ -75,19 +75,28 @@ export function TimeRangePicker(props: TimeRangePickerProps) {
     setOpen(false);
   };
 
-  const onOpen = (event: FormEvent<HTMLButtonElement>) => {
-    event.stopPropagation();
-    event.preventDefault();
-    setOpen(!isOpen);
+  const onToolbarButtonSwitch = () => {
+    setOpen((prevState) => !prevState);
   };
 
   const onClose = () => {
     setOpen(false);
   };
 
-  const ref = createRef<HTMLElement>();
-  const { overlayProps, underlayProps } = useOverlay({ onClose, isDismissable: true, isOpen }, ref);
-  const { dialogProps } = useDialog({}, ref);
+  const overlayRef = createRef<HTMLElement>();
+  const buttonRef = createRef<HTMLElement>();
+  const { overlayProps, underlayProps } = useOverlay(
+    {
+      onClose,
+      isDismissable: true,
+      isOpen,
+      shouldCloseOnInteractOutside: (element) => {
+        return !buttonRef.current?.contains(element);
+      },
+    },
+    overlayRef
+  );
+  const { dialogProps } = useDialog({}, overlayRef);
 
   const theme = useTheme2();
   const styles = useStyles2(getStyles);
@@ -109,14 +118,19 @@ export function TimeRangePicker(props: TimeRangePickerProps) {
         />
       )}
 
-      <Tooltip content={<TimePickerTooltip timeRange={value} timeZone={timeZone} />} placement="bottom" interactive>
+      <Tooltip
+        ref={buttonRef}
+        content={<TimePickerTooltip timeRange={value} timeZone={timeZone} />}
+        placement="bottom"
+        interactive
+      >
         <ToolbarButton
           data-testid={selectors.components.TimePicker.openButton}
           aria-label={t('time-picker.range-picker.current-time-selected', 'Time range selected: {{currentTimeRange}}', {
             currentTimeRange,
           })}
           aria-controls="TimePickerContent"
-          onClick={onOpen}
+          onClick={onToolbarButtonSwitch}
           icon="clock-nine"
           isOpen={isOpen}
           variant={variant}
@@ -125,10 +139,10 @@ export function TimeRangePicker(props: TimeRangePickerProps) {
         </ToolbarButton>
       </Tooltip>
       {isOpen && (
-        <div>
+        <div data-testid={selectors.components.TimePicker.overlayContent}>
           <div role="presentation" className={cx(modalBackdrop, styles.backdrop)} {...underlayProps} />
           <FocusScope contain autoFocus>
-            <section className={styles.content} ref={ref} {...overlayProps} {...dialogProps}>
+            <section className={styles.content} ref={overlayRef} {...overlayProps} {...dialogProps}>
               <TimePickerContent
                 timeZone={timeZone}
                 fiscalYearStartMonth={fiscalYearStartMonth}
diff --git a/public/app/core/components/TimePicker/TimePickerWithHistory.test.tsx b/public/app/core/components/TimePicker/TimePickerWithHistory.test.tsx
index 87ab11d13c8..87a4e6195a2 100644
--- a/public/app/core/components/TimePicker/TimePickerWithHistory.test.tsx
+++ b/public/app/core/components/TimePicker/TimePickerWithHistory.test.tsx
@@ -113,7 +113,6 @@ describe('TimePickerWithHistory', () => {
 
     const timeRange = getDefaultTimeRange();
     render(<TimePickerWithHistory value={timeRange} {...props} />);
-    await userEvent.click(screen.getByLabelText(/Time range selected/));
 
     for (const [inputFrom, inputTo] of inputRanges) {
       await userEvent.click(screen.getByLabelText(/Time range selected/));