diff --git a/src/vs/workbench/contrib/chat/browser/actions/chatNewActions.ts b/src/vs/workbench/contrib/chat/browser/actions/chatNewActions.ts
index d662fd086eb..648d7fd1329 100644
--- a/src/vs/workbench/contrib/chat/browser/actions/chatNewActions.ts
+++ b/src/vs/workbench/contrib/chat/browser/actions/chatNewActions.ts
@@ -24,12 +24,12 @@ import { localChatSessionType } from '../../common/chatSessionsService.js';
 import { ChatAgentLocation, ChatModeKind } from '../../common/constants.js';
 import { getChatSessionType, LocalChatSessionUri } from '../../common/model/chatUri.js';
 import { ChatViewId, IChatWidgetService, isIChatViewViewContext } from '../chat.js';
-import { EditingSessionAction, getEditingSessionContext } from '../chatEditing/chatEditingActions.js';
+import { EditingSessionAction, EditingSessionActionContext, getEditingSessionContext } from '../chatEditing/chatEditingActions.js';
 import { ChatEditorInput } from '../widgetHosts/editor/chatEditorInput.js';
 import { ChatViewPane } from '../widgetHosts/viewPane/chatViewPane.js';
 import { ACTION_ID_NEW_CHAT, ACTION_ID_NEW_EDIT_SESSION, CHAT_CATEGORY, handleCurrentEditingSession } from './chatActions.js';
 import { clearChatEditor } from './chatClear.js';
-import { AgentSessionsViewerOrientation } from '../agentSessions/agentSessions.js';
+import { AgentSessionProviders, AgentSessionsViewerOrientation } from '../agentSessions/agentSessions.js';
 
 export interface INewEditSessionActionContext {
 
@@ -51,6 +51,23 @@ export interface INewEditSessionActionContext {
 	isPartialQuery?: boolean;
 }
 
+function isNewEditSessionActionContext(arg: unknown): arg is INewEditSessionActionContext {
+	if (arg && typeof arg === 'object') {
+		const obj = arg as Record<string, unknown>;
+		if (obj.inputValue !== undefined && typeof obj.inputValue !== 'string') {
+			return false;
+		}
+		if (obj.agentMode !== undefined && typeof obj.agentMode !== 'boolean') {
+			return false;
+		}
+		if (obj.isPartialQuery !== undefined && typeof obj.isPartialQuery !== 'boolean') {
+			return false;
+		}
+		return true;
+	}
+	return false;
+}
+
 export function registerNewChatActions() {
 
 	// Add "New Chat" submenu to Chat view menu
@@ -119,64 +136,36 @@ export function registerNewChatActions() {
 		}
 
 		async run(accessor: ServicesAccessor, ...args: unknown[]) {
-			const accessibilityService = accessor.get(IAccessibilityService);
-			const viewsService = accessor.get(IViewsService);
-
-			const executeCommandContext = args[0] as INewEditSessionActionContext | undefined;
+			const executeCommandContext = isNewEditSessionActionContext(args[0]) ? args[0] : undefined;
 
 			// Context from toolbar or lastFocusedWidget
 			const context = getEditingSessionContext(accessor, args);
-			const { editingSession, chatWidget: widget } = context ?? {};
-			if (!widget) {
-				return;
-			}
+			await runNewChatAction(accessor, context, executeCommandContext);
+		}
+	}
+	);
+	CommandsRegistry.registerCommandAlias(ACTION_ID_NEW_EDIT_SESSION, ACTION_ID_NEW_CHAT);
 
-			const dialogService = accessor.get(IDialogService);
+	registerAction2(class NewLocalChatAction extends Action2 {
+		constructor() {
+			super({
+				id: 'workbench.action.chat.newLocalChat',
+				title: localize2('chat.newLocalChat.label', "New Local Chat"),
+				category: CHAT_CATEGORY,
+				icon: Codicon.plus,
+				precondition: ContextKeyExpr.and(ChatContextKeys.enabled, ChatContextKeys.location.isEqualTo(ChatAgentLocation.Chat)),
+				f1: false,
+			});
+		}
 
-			const model = widget.viewModel?.model;
-			if (model && !(await handleCurrentEditingSession(model, undefined, dialogService))) {
-				return;
-			}
+		async run(accessor: ServicesAccessor, ...args: unknown[]) {
+			const executeCommandContext = isNewEditSessionActionContext(args[0]) ? args[0] : undefined;
 
-			await editingSession?.stop();
-
-			// Create a new session with the same type as the current session
-			const currentResource = widget.viewModel?.model.sessionResource;
-			const sessionType = currentResource ? getChatSessionType(currentResource) : localChatSessionType;
-			if (isIChatViewViewContext(widget.viewContext) && sessionType !== localChatSessionType) {
-				// For the sidebar, we need to explicitly load a session with the same type
-				const newResource = getResourceForNewChatSession(sessionType);
-				const view = await viewsService.openView(ChatViewId) as ChatViewPane;
-				await view.loadSession(newResource);
-			} else {
-				// For the editor, widget.clear() already preserves the session type via clearChatEditor
-				await widget.clear();
-			}
-
-			widget.attachmentModel.clear(true);
-			widget.input.relatedFiles?.clear();
-			widget.focusInput();
-
-			accessibilityService.alert(localize('newChat', "New chat"));
-
-			if (!executeCommandContext) {
-				return;
-			}
-
-			if (typeof executeCommandContext.agentMode === 'boolean') {
-				widget.input.setChatMode(executeCommandContext.agentMode ? ChatModeKind.Agent : ChatModeKind.Edit);
-			}
-
-			if (executeCommandContext.inputValue) {
-				if (executeCommandContext.isPartialQuery) {
-					widget.setInput(executeCommandContext.inputValue);
-				} else {
-					widget.acceptInput(executeCommandContext.inputValue);
-				}
-			}
+			// Context from toolbar or lastFocusedWidget
+			const context = getEditingSessionContext(accessor, args);
+			await runNewChatAction(accessor, context, executeCommandContext, AgentSessionProviders.Local);
 		}
 	});
-	CommandsRegistry.registerCommandAlias(ACTION_ID_NEW_EDIT_SESSION, ACTION_ID_NEW_CHAT);
 
 	MenuRegistry.appendMenuItem(MenuId.ChatViewSessionTitleNavigationToolbar, {
 		command: {
@@ -296,3 +285,62 @@ function getResourceForNewChatSession(sessionType: string): URI {
 
 	return LocalChatSessionUri.forSession(generateUuid());
 }
+
+async function runNewChatAction(
+	accessor: ServicesAccessor,
+	context: EditingSessionActionContext | undefined,
+	executeCommandContext?: INewEditSessionActionContext,
+	sessionType?: AgentSessionProviders
+) {
+	const accessibilityService = accessor.get(IAccessibilityService);
+	const viewsService = accessor.get(IViewsService);
+
+	const { editingSession, chatWidget: widget } = context ?? {};
+	if (!widget) {
+		return;
+	}
+
+	const dialogService = accessor.get(IDialogService);
+
+	const model = widget.viewModel?.model;
+	if (model && !(await handleCurrentEditingSession(model, undefined, dialogService))) {
+		return;
+	}
+
+	await editingSession?.stop();
+
+	// Create a new session with the same type as the current session
+	const currentResource = widget.viewModel?.model.sessionResource;
+	const newSessionType = sessionType ?? (currentResource ? getChatSessionType(currentResource) : localChatSessionType);
+	if (isIChatViewViewContext(widget.viewContext) && newSessionType !== localChatSessionType) {
+		// For the sidebar, we need to explicitly load a session with the same type
+		const newResource = getResourceForNewChatSession(newSessionType);
+		const view = await viewsService.openView(ChatViewId) as ChatViewPane;
+		await view.loadSession(newResource);
+	} else {
+		// For the editor, widget.clear() already preserves the session type via clearChatEditor
+		await widget.clear();
+	}
+
+	widget.attachmentModel.clear(true);
+	widget.input.relatedFiles?.clear();
+	widget.focusInput();
+
+	accessibilityService.alert(localize('newChat', "New chat"));
+
+	if (!executeCommandContext) {
+		return;
+	}
+
+	if (typeof executeCommandContext.agentMode === 'boolean') {
+		widget.input.setChatMode(executeCommandContext.agentMode ? ChatModeKind.Agent : ChatModeKind.Edit);
+	}
+
+	if (executeCommandContext.inputValue) {
+		if (executeCommandContext.isPartialQuery) {
+			widget.setInput(executeCommandContext.inputValue);
+		} else {
+			widget.acceptInput(executeCommandContext.inputValue);
+		}
+	}
+}
diff --git a/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingActions.ts b/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingActions.ts
index a2cde761222..30404affd13 100644
--- a/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingActions.ts
+++ b/src/vs/workbench/contrib/chat/browser/chatEditing/chatEditingActions.ts
@@ -58,11 +58,13 @@ export abstract class EditingSessionAction extends Action2 {
 	abstract runEditingSessionAction(accessor: ServicesAccessor, editingSession: IChatEditingSession, chatWidget: IChatWidget, ...args: unknown[]): any;
 }
 
+export type EditingSessionActionContext = { editingSession?: IChatEditingSession; chatWidget: IChatWidget };
+
 /**
  * Resolve view title toolbar context. If none, return context from the lastFocusedWidget.
  */
 // eslint-disable-next-line @typescript-eslint/no-explicit-any
-export function getEditingSessionContext(accessor: ServicesAccessor, args: any[]): { editingSession?: IChatEditingSession; chatWidget: IChatWidget } | undefined {
+export function getEditingSessionContext(accessor: ServicesAccessor, args: any[]): EditingSessionActionContext | undefined {
 	const arg0 = args.at(0);
 	const context = isChatViewTitleActionContext(arg0) ? arg0 : undefined;