diff --git a/src/vs/workbench/api/common/extHostTreeViews.ts b/src/vs/workbench/api/common/extHostTreeViews.ts
index 76ccbbd770d..6d0250d4436 100644
--- a/src/vs/workbench/api/common/extHostTreeViews.ts
+++ b/src/vs/workbench/api/common/extHostTreeViews.ts
@@ -149,20 +149,16 @@ export class ExtHostTreeViews implements ExtHostTreeViewsShape {
 	private async addAdditionalTransferItems(treeDataTransfer: ITreeDataTransfer, treeView: ExtHostTreeView<any>,
 		sourceTreeItemHandles: string[], operationUuid?: string): Promise<ITreeDataTransfer | undefined> {
 		const existingTransferOperation = this.treeDragAndDropService.removeDragOperationTransfer(operationUuid);
-		let additionalTransferItems: vscode.TreeDataTransfer | undefined;
 		if (existingTransferOperation) {
-			additionalTransferItems = await existingTransferOperation;
-		} else if (operationUuid && treeView.handleDrag) {
-			const willDropPromise = treeView.handleDrag(sourceTreeItemHandles);
-			this.treeDragAndDropService.addDragOperationTransfer(operationUuid, willDropPromise);
-			additionalTransferItems = await willDropPromise;
-		}
-		if (additionalTransferItems) {
-			additionalTransferItems.forEach((value, key) => {
+			(await existingTransferOperation)?.forEach((value, key) => {
 				if (value) {
 					treeDataTransfer.set(key, value);
 				}
 			});
+		} else if (operationUuid && treeView.handleDrag) {
+			const willDropPromise = treeView.handleDrag(sourceTreeItemHandles, treeDataTransfer);
+			this.treeDragAndDropService.addDragOperationTransfer(operationUuid, willDropPromise);
+			await willDropPromise;
 		}
 		return treeDataTransfer;
 	}
@@ -435,7 +431,7 @@ class ExtHostTreeView<T> extends Disposable {
 		}
 	}
 
-	async handleDrag(sourceTreeItemHandles: TreeItemHandle[]): Promise<vscode.TreeDataTransfer | undefined> {
+	async handleDrag(sourceTreeItemHandles: TreeItemHandle[], treeDataTransfer: ITreeDataTransfer): Promise<vscode.TreeDataTransfer | undefined> {
 		const extensionTreeItems: T[] = [];
 		for (const sourceHandle of sourceTreeItemHandles) {
 			const extensionItem = this.getExtensionElement(sourceHandle);
@@ -447,7 +443,8 @@ class ExtHostTreeView<T> extends Disposable {
 		if (!this.dndController?.handleDrag || (extensionTreeItems.length === 0)) {
 			return;
 		}
-		return this.dndController.handleDrag(extensionTreeItems);
+		await this.dndController.handleDrag(extensionTreeItems, treeDataTransfer);
+		return treeDataTransfer;
 	}
 
 	get hasHandleDrag(): boolean {
diff --git a/src/vscode-dts/vscode.proposed.treeViewDragAndDrop.d.ts b/src/vscode-dts/vscode.proposed.treeViewDragAndDrop.d.ts
index 7f0cea4602b..f135fa73a8d 100644
--- a/src/vscode-dts/vscode.proposed.treeViewDragAndDrop.d.ts
+++ b/src/vscode-dts/vscode.proposed.treeViewDragAndDrop.d.ts
@@ -102,11 +102,10 @@ declare module 'vscode' {
 		 * When the items are dropped on **another tree item** in **the same tree**, your `TreeDataTransferItem` objects
 		 * will be preserved. See the documentation for `TreeDataTransferItem` for how best to take advantage of this.
 		 *
-		 * The returned `TreeDataTransfer` will be merged with the original`TreeDataTransfer` for the operation.
-		 *
 		 * @param source The source items for the drag and drop operation.
+		 * @param treeDataTransfer The data transfer associated with this drag.
 		 */
-		handleDrag?(source: T[]): Thenable<TreeDataTransfer>;
+		handleDrag?(source: T[], treeDataTransfer: TreeDataTransfer): Thenable<void> | void;
 
 		/**
 		 * Called when a drag and drop action results in a drop on the tree that this `DragAndDropController` belongs too.