diff --git a/src/vs/workbench/contrib/chat/browser/widgetHosts/viewPane/chatViewPane.ts b/src/vs/workbench/contrib/chat/browser/widgetHosts/viewPane/chatViewPane.ts
index a9fe036efb9..8f9bf85702f 100644
--- a/src/vs/workbench/contrib/chat/browser/widgetHosts/viewPane/chatViewPane.ts
+++ b/src/vs/workbench/contrib/chat/browser/widgetHosts/viewPane/chatViewPane.ts
@@ -175,10 +175,26 @@ export class ChatViewPane extends ViewPane implements IViewWelcomeDelegate {
 
 		return {
 			position: sideSessionsOnRightPosition ? Position.RIGHT : Position.LEFT,
-			location: viewLocation ?? ViewContainerLocation.AuxiliaryBar
+			location: viewLocation ?? ViewContainerLocation.AuxiliaryBar,
 		};
 	}
 
+	private getSessionHoverPosition() {
+		const viewLocation = this.viewDescriptorService.getViewLocationById(this.id);
+		const sideBarPosition = this.layoutService.getSideBarPosition();
+
+		if (this.sessionsViewerOrientation === AgentSessionsViewerOrientation.SideBySide) {
+			return viewLocation === ViewContainerLocation.Sidebar && sideBarPosition === Position.RIGHT ? HoverPosition.LEFT : HoverPosition.RIGHT;
+		}
+
+		return {
+			[Position.LEFT]: HoverPosition.RIGHT,
+			[Position.RIGHT]: HoverPosition.LEFT,
+			[Position.TOP]: HoverPosition.BELOW,
+			[Position.BOTTOM]: HoverPosition.ABOVE
+		}[viewLocation === ViewContainerLocation.Panel ? this.layoutService.getPanelPosition() : sideBarPosition];
+	}
+
 	private updateViewPaneClasses(fromEvent: boolean): void {
 		const welcomeEnabled = !this.chatEntitlementService.sentiment.installed; // only show initially until Chat is setup
 		this.viewPaneContainer?.classList.toggle('chat-view-welcome-enabled', welcomeEnabled);
@@ -369,10 +385,7 @@ export class ChatViewPane extends ViewPane implements IViewWelcomeDelegate {
 			source: 'chatViewPane',
 			filter: sessionsFilter,
 			overrideStyles: this.getLocationBasedColors().listOverrideStyles,
-			getHoverPosition: () => {
-				const { position } = this.getViewPositionAndLocation();
-				return position === Position.RIGHT ? HoverPosition.LEFT : HoverPosition.RIGHT;
-			},
+			getHoverPosition: () => this.getSessionHoverPosition(),
 			trackActiveEditorSession: () => {
 				return !this._widget || this._widget.isEmpty(); // only track and reveal if chat widget is empty
 			},