diff --git a/src/vs/sessions/browser/layoutActions.ts b/src/vs/sessions/browser/layoutActions.ts
index 996acb9fdeb..bd8d5bbc1c1 100644
--- a/src/vs/sessions/browser/layoutActions.ts
+++ b/src/vs/sessions/browser/layoutActions.ts
@@ -13,22 +13,25 @@ import { Menus } from './menus.js';
 import { ServicesAccessor } from '../../platform/instantiation/common/instantiation.js';
 import { KeybindingWeight } from '../../platform/keybinding/common/keybindingsRegistry.js';
 import { registerIcon } from '../../platform/theme/common/iconRegistry.js';
-import { IsAuxiliaryWindowContext, IsWindowAlwaysOnTopContext } from '../../workbench/common/contextkeys.js';
+import { IsAuxiliaryWindowContext, IsWindowAlwaysOnTopContext, SideBarVisibleContext } from '../../workbench/common/contextkeys.js';
 import { IWorkbenchLayoutService, Parts } from '../../workbench/services/layout/browser/layoutService.js';
 
 // Register Icons
 const panelCloseIcon = registerIcon('agent-panel-close', Codicon.close, localize('agentPanelCloseIcon', "Icon to close the panel."));
+const sidebarToggleIcon = registerIcon('agent-sidebar-toggle', Codicon.tasklist, localize('agentSidebarToggleIcon', "Icon to toggle the sessions sidebar."));
 
 class ToggleSidebarVisibilityAction extends Action2 {
 
 	static readonly ID = 'workbench.action.agentToggleSidebarVisibility';
-	static readonly LABEL = localize('compositePart.hideSideBarLabel', "Hide Primary Side Bar");
 
 	constructor() {
 		super({
 			id: ToggleSidebarVisibilityAction.ID,
 			title: localize2('toggleSidebar', 'Toggle Primary Side Bar Visibility'),
-			icon: panelCloseIcon,
+			icon: sidebarToggleIcon,
+			toggled: {
+				condition: SideBarVisibleContext,
+			},
 			metadata: {
 				description: localize('openAndCloseSidebar', 'Open/Show and Close/Hide Sidebar'),
 			},
@@ -39,6 +42,12 @@ class ToggleSidebarVisibilityAction extends Action2 {
 				primary: KeyMod.CtrlCmd | KeyCode.KeyB
 			},
 			menu: [
+				{
+					id: Menus.TitleBarLeftLayout,
+					group: 'navigation',
+					order: 0,
+					when: IsAuxiliaryWindowContext.toNegated()
+				},
 				{
 					id: Menus.TitleBarContext,
 					group: 'navigation',
@@ -66,7 +75,6 @@ class ToggleSidebarVisibilityAction extends Action2 {
 class ToggleSecondarySidebarVisibilityAction extends Action2 {
 
 	static readonly ID = 'workbench.action.agentToggleSecondarySidebarVisibility';
-	static readonly LABEL = localize('compositePart.hideSecondarySideBarLabel', "Hide Secondary Side Bar");
 
 	constructor() {
 		super({
diff --git a/src/vs/sessions/browser/parts/media/sidebarPart.css b/src/vs/sessions/browser/parts/media/sidebarPart.css
index 0442acdd65d..1ddbeedf2c2 100644
--- a/src/vs/sessions/browser/parts/media/sidebarPart.css
+++ b/src/vs/sessions/browser/parts/media/sidebarPart.css
@@ -24,8 +24,7 @@
 }
 
 /* Interactive elements in the title area must not be draggable */
-.agent-sessions-workbench .part.sidebar > .composite.title .action-item,
-.agent-sessions-workbench .part.sidebar > .composite.title > .session-status-toggle {
+.agent-sessions-workbench .part.sidebar > .composite.title .action-item {
 	-webkit-app-region: no-drag;
 }
 
@@ -73,38 +72,3 @@
 	max-width: 100%;
 	cursor: default;
 }
-
-/* Session status toggle — standalone button in sidebar title area */
-.agent-sessions-workbench .part.sidebar .session-status-toggle {
-	display: flex;
-	align-items: center;
-	align-self: center;
-	gap: 3px;
-	height: 22px;
-	padding: 0 4px;
-	margin-right: 4px;
-	border: none;
-	border-radius: 4px;
-	cursor: pointer;
-	color: inherit;
-	font: inherit;
-	background: var(--vscode-toolbar-activeBackground);
-	outline: none;
-	position: relative;
-	z-index: 1;
-}
-
-.agent-sessions-workbench .part.sidebar .session-status-toggle:hover {
-	background-color: var(--vscode-toolbar-hoverBackground);
-}
-
-.agent-sessions-workbench .part.sidebar .session-status-toggle .codicon {
-	font-size: 16px;
-}
-
-.agent-sessions-workbench .part.sidebar .session-status-toggle-badge {
-	font-size: 12px;
-	font-variant-numeric: tabular-nums;
-	line-height: 16px;
-	color: inherit;
-}
diff --git a/src/vs/sessions/browser/parts/sidebarPart.ts b/src/vs/sessions/browser/parts/sidebarPart.ts
index 6f848d84fdc..0bd85fb27d6 100644
--- a/src/vs/sessions/browser/parts/sidebarPart.ts
+++ b/src/vs/sessions/browser/parts/sidebarPart.ts
@@ -32,17 +32,13 @@ import { Separator } from '../../../base/common/actions.js';
 import { IHoverService } from '../../../platform/hover/browser/hover.js';
 import { Extensions } from '../../../workbench/browser/panecomposite.js';
 import { Menus } from '../menus.js';
-import { $, addDisposableListener, append, EventType, getWindowId, prepend } from '../../../base/browser/dom.js';
+import { $, append, getWindowId, prepend } from '../../../base/browser/dom.js';
 import { HiddenItemStrategy, MenuWorkbenchToolBar } from '../../../platform/actions/browser/toolbar.js';
-import { isMacintosh, isNative } from '../../../base/common/platform.js';
 import { isFullscreen, onDidChangeFullscreen } from '../../../base/browser/browser.js';
 import { mainWindow } from '../../../base/browser/window.js';
 import { IConfigurationService } from '../../../platform/configuration/common/configuration.js';
 import { hasNativeTitlebar, getTitleBarStyle } from '../../../platform/window/common/window.js';
-import { ThemeIcon } from '../../../base/common/themables.js';
-import { Codicon } from '../../../base/common/codicons.js';
-import { DisposableStore } from '../../../base/common/lifecycle.js';
-import { localize } from '../../../nls.js';
+import { isMacintosh, isNative } from '../../../base/common/platform.js';
 
 /**
  * Sidebar part specifically for agent sessions workbench.
@@ -156,11 +152,6 @@ export class SidebarPart extends AbstractPaneCompositePart {
 			prepend(titleArea, $('div.titlebar-drag-region'));
 		}
 
-		// Session toggle widget (right side of title area)
-		if (titleArea) {
-			this.createSessionsToggle(titleArea);
-		}
-
 		// macOS native: the sidebar spans full height and the traffic lights
 		// overlay the top-left corner. Add a fixed-width spacer inside the
 		// title area to push content horizontally past the traffic lights.
@@ -187,27 +178,6 @@ export class SidebarPart extends AbstractPaneCompositePart {
 		return titleArea;
 	}
 
-	/**
-	 * Creates a standalone session toggle widget appended to the sidebar title area.
-	 * Displays a tasklist icon with an optional unread badge. Clicking hides the sidebar.
-	 */
-	private createSessionsToggle(titleArea: HTMLElement): void {
-		const widgetDisposables = this._register(new DisposableStore());
-
-		const widget = append(titleArea, $('button.session-status-toggle')) as HTMLButtonElement;
-		widget.type = 'button';
-		widget.tabIndex = 0;
-		widget.setAttribute('aria-label', localize('hideSidebar', "Hide Side Bar"));
-		append(widget, $(ThemeIcon.asCSSSelector(Codicon.tasklist)));
-
-		// Toggle sidebar on click
-		widgetDisposables.add(addDisposableListener(widget, EventType.CLICK, (e) => {
-			e.preventDefault();
-			e.stopPropagation();
-			this.layoutService.setPartHidden(true, Parts.SIDEBAR_PART);
-		}));
-	}
-
 	private createFooter(parent: HTMLElement): void {
 		const footer = append(parent, $('.sidebar-footer.sidebar-action-list'));
 		this.footerContainer = footer;
diff --git a/src/vs/sessions/contrib/sessions/browser/media/sessionsTitleBarWidget.css b/src/vs/sessions/contrib/sessions/browser/media/sessionsTitleBarWidget.css
index 6136099f682..da144ac677e 100644
--- a/src/vs/sessions/contrib/sessions/browser/media/sessionsTitleBarWidget.css
+++ b/src/vs/sessions/contrib/sessions/browser/media/sessionsTitleBarWidget.css
@@ -86,42 +86,27 @@
 	opacity: 0.7;
 }
 
-/* Provider label (shown for untitled sessions) */
-.command-center .agent-sessions-titlebar-container .agent-sessions-titlebar-provider {
-	display: flex;
-	align-items: center;
-	flex-shrink: 0;
-	opacity: 0.7;
+/* Sidebar toggle unread badge */
+.agent-sessions-workbench .action-item.sidebar-toggle-action {
+	position: relative;
 }
 
-/* Session count widget (tasklist icon + unread count, left of pill) */
-.command-center .agent-sessions-titlebar-container .agent-sessions-titlebar-count {
-	display: flex;
-	align-items: center;
-	gap: 3px;
-	flex-shrink: 0;
-	cursor: pointer;
-	padding: 0 4px;
-	height: 22px;
-	border: none;
-	border-radius: 4px;
-	background: transparent;
-	color: inherit;
-	font: inherit;
-	outline: none;
-}
-
-.command-center .agent-sessions-titlebar-container .agent-sessions-titlebar-count:hover {
-	background-color: var(--vscode-toolbar-hoverBackground);
-}
-
-.command-center .agent-sessions-titlebar-container .agent-sessions-titlebar-count .codicon {
-	font-size: 16px;
-}
-
-.command-center .agent-sessions-titlebar-container .agent-sessions-titlebar-count-label {
-	font-size: 12px;
+.agent-sessions-workbench .action-item.sidebar-toggle-action .sidebar-toggle-badge {
+	position: absolute;
+	top: 0;
+	right: -4px;
+	min-width: 14px;
+	height: 14px;
+	line-height: 14px;
+	padding: 0 3px;
+	box-sizing: border-box;
+	font-size: 9px;
+	font-weight: 600;
 	font-variant-numeric: tabular-nums;
-	line-height: 16px;
+	text-align: center;
+	border-radius: 4px;
+	background-color: var(--vscode-activityBarBadge-background);
+	color: var(--vscode-activityBarBadge-foreground);
+	pointer-events: none;
 }
 
diff --git a/src/vs/sessions/contrib/sessions/browser/sessionsTitleBarWidget.ts b/src/vs/sessions/contrib/sessions/browser/sessionsTitleBarWidget.ts
index fb5d3a5f359..5e0de629eea 100644
--- a/src/vs/sessions/contrib/sessions/browser/sessionsTitleBarWidget.ts
+++ b/src/vs/sessions/contrib/sessions/browser/sessionsTitleBarWidget.ts
@@ -4,15 +4,14 @@
  *--------------------------------------------------------------------------------------------*/
 
 import './media/sessionsTitleBarWidget.css';
-import { $, addDisposableListener, EventType, getActiveWindow, reset } from '../../../../base/browser/dom.js';
-
-import { Separator } from '../../../../base/common/actions.js';
+import { $, addDisposableListener, append, EventType, getActiveWindow, reset } from '../../../../base/browser/dom.js';
+import { IAction, Separator } from '../../../../base/common/actions.js';
 import { Disposable, DisposableStore } from '../../../../base/common/lifecycle.js';
 import { StandardMouseEvent } from '../../../../base/browser/mouseEvent.js';
 import { localize } from '../../../../nls.js';
 import { IHoverService } from '../../../../platform/hover/browser/hover.js';
 import { getDefaultHoverDelegate } from '../../../../base/browser/ui/hover/hoverDelegateFactory.js';
-import { BaseActionViewItem, IBaseActionViewItemOptions } from '../../../../base/browser/ui/actionbar/actionViewItems.js';
+import { ActionViewItem, BaseActionViewItem, IBaseActionViewItemOptions } from '../../../../base/browser/ui/actionbar/actionViewItems.js';
 import { IInstantiationService } from '../../../../platform/instantiation/common/instantiation.js';
 import { IMenuService, MenuRegistry, SubmenuItemAction } from '../../../../platform/actions/common/actions.js';
 import { ContextKeyExpr, IContextKeyService } from '../../../../platform/contextkey/common/contextkey.js';
@@ -23,13 +22,12 @@ import { Menus } from '../../../browser/menus.js';
 import { IWorkbenchContribution } from '../../../../workbench/common/contributions.js';
 import { IActionViewItemService } from '../../../../platform/actions/browser/actionViewItemService.js';
 import { ISessionsManagementService } from './sessionsManagementService.js';
-import { autorun } from '../../../../base/common/observable.js';
+import { autorun, observableSignalFromEvent } from '../../../../base/common/observable.js';
 import { ThemeIcon } from '../../../../base/common/themables.js';
 import { IsAuxiliaryWindowContext } from '../../../../workbench/common/contextkeys.js';
 import { SessionsWelcomeVisibleContext } from '../../../common/contextkeys.js';
 import { ISessionsProvidersService } from './sessionsProvidersService.js';
 import { SessionStatus } from '../common/sessionData.js';
-import { Codicon } from '../../../../base/common/codicons.js';
 import { SHOW_SESSIONS_PICKER_COMMAND_ID } from './sessionsActions.js';
 import { IsSessionArchivedContext, IsSessionPinnedContext, IsSessionReadContext, SessionItemContextMenuId } from './views/sessionsList.js';
 
@@ -67,7 +65,6 @@ export class SessionsTitleBarWidget extends BaseActionViewItem {
 		@IMenuService private readonly menuService: IMenuService,
 		@IContextKeyService private readonly contextKeyService: IContextKeyService,
 		@ISessionsProvidersService private readonly sessionsProvidersService: ISessionsProvidersService,
-		@IWorkbenchLayoutService private readonly layoutService: IWorkbenchLayoutService,
 		@ICommandService private readonly commandService: ICommandService,
 	) {
 		super(undefined, action, options);
@@ -131,9 +128,8 @@ export class SessionsTitleBarWidget extends BaseActionViewItem {
 			const label = this._getActiveSessionLabel();
 			const icon = this._getActiveSessionIcon();
 			const repoLabel = this._getRepositoryLabel();
-			const unreadCount = this._countUnreadSessions();
 			// Build a render-state key from all displayed data
-			const renderState = `${icon?.id ?? ''}|${label}|${repoLabel ?? ''}|${unreadCount}`;
+			const renderState = `${icon?.id ?? ''}|${label}|${repoLabel ?? ''}`;
 
 			// Skip re-render if state hasn't changed
 			if (this._lastRenderState === renderState) {
@@ -198,37 +194,6 @@ export class SessionsTitleBarWidget extends BaseActionViewItem {
 
 			this._container.appendChild(sessionPill);
 
-			// Session count widget (to the left of the pill) — toggles sidebar
-			const countWidget = $('button.agent-sessions-titlebar-count') as HTMLButtonElement;
-			countWidget.type = 'button';
-			countWidget.tabIndex = 0;
-			const countIcon = $(ThemeIcon.asCSSSelector(Codicon.tasklist));
-			countWidget.appendChild(countIcon);
-			if (unreadCount > 0) {
-				const countLabel = $('span.agent-sessions-titlebar-count-label');
-				countLabel.textContent = `${unreadCount}`;
-				countWidget.appendChild(countLabel);
-				countWidget.setAttribute('aria-label', localize('showSidebarUnread', "Show Side Bar, {0} unread session(s)", unreadCount));
-			} else {
-				countWidget.setAttribute('aria-label', localize('showSidebar', "Show Side Bar"));
-			}
-			// Hide when sidebar is visible (only shown when sidebar is hidden)
-			const updateVisibility = () => {
-				countWidget.style.display = this.layoutService.isVisible(Parts.SIDEBAR_PART) ? 'none' : '';
-			};
-			updateVisibility();
-			this._dynamicDisposables.add(this.layoutService.onDidChangePartVisibility(e => {
-				if (e.partId === Parts.SIDEBAR_PART) {
-					updateVisibility();
-				}
-			}));
-			this._dynamicDisposables.add(addDisposableListener(countWidget, EventType.CLICK, (e) => {
-				e.preventDefault();
-				e.stopPropagation();
-				this.layoutService.setPartHidden(false, Parts.SIDEBAR_PART);
-			}));
-			this._container.insertBefore(countWidget, sessionPill);
-
 			// Hover
 			this._dynamicDisposables.add(this.hoverService.setupManagedHover(
 				getDefaultHoverDelegate('mouse'),
@@ -285,16 +250,6 @@ export class SessionsTitleBarWidget extends BaseActionViewItem {
 		return undefined;
 	}
 
-	private _countUnreadSessions(): number {
-		let unread = 0;
-		for (const session of this.sessionsManagementService.getSessions()) {
-			if (!session.isArchived.get() && session.status.get() === SessionStatus.Completed && !session.isRead.get()) {
-				unread++;
-			}
-		}
-		return unread;
-	}
-
 	private _showContextMenu(e: MouseEvent): void {
 		const sessionData = this.sessionsManagementService.activeSession.get();
 		if (!sessionData) {
@@ -324,6 +279,93 @@ export class SessionsTitleBarWidget extends BaseActionViewItem {
 	}
 }
 
+/**
+ * Custom action view item for the sidebar toggle button.
+ * Renders the tasklist icon with an unread session count badge.
+ */
+class SidebarToggleActionViewItem extends ActionViewItem {
+
+	private _countBadge: HTMLElement | undefined;
+
+	constructor(
+		context: unknown,
+		action: IAction,
+		options: IBaseActionViewItemOptions | undefined,
+		@ISessionsManagementService private readonly sessionsManagementService: ISessionsManagementService,
+		@IWorkbenchLayoutService private readonly layoutService: IWorkbenchLayoutService,
+	) {
+		super(context, action, { ...options, icon: true, label: false });
+	}
+
+	override render(container: HTMLElement): void {
+		super.render(container);
+
+		container.classList.add('sidebar-toggle-action');
+
+		// Add badge element for unread session count
+		this._countBadge = append(container, $('span.sidebar-toggle-badge'));
+		this._countBadge.setAttribute('aria-hidden', 'true');
+		this._updateBadge();
+
+		// Single autorun that tracks all badge-relevant state:
+		// - session list changes (add/remove) via observableSignalFromEvent
+		// - individual session observable state (status, isRead, isArchived)
+		// - sidebar visibility changes
+		const sessionsChanged = observableSignalFromEvent(this, this.sessionsManagementService.onDidChangeSessions);
+		const sidebarVisibilityChanged = observableSignalFromEvent(this, handler => this.layoutService.onDidChangePartVisibility(e => {
+			if (e.partId === Parts.SIDEBAR_PART) {
+				handler(e);
+			}
+		}));
+		this._register(autorun(reader => {
+			sessionsChanged.read(reader);
+			sidebarVisibilityChanged.read(reader);
+			for (const session of this.sessionsManagementService.getSessions()) {
+				session.isArchived.read(reader);
+				session.status.read(reader);
+				session.isRead.read(reader);
+			}
+			this._updateBadge();
+		}));
+	}
+
+	private _updateBadge(): void {
+		if (!this._countBadge) {
+			return;
+		}
+
+		const unreadCount = this._countUnreadSessions();
+		const sidebarVisible = this.layoutService.isVisible(Parts.SIDEBAR_PART);
+
+		if (unreadCount > 0 && !sidebarVisible) {
+			this._countBadge.textContent = `${unreadCount}`;
+			this._countBadge.style.display = '';
+		} else {
+			this._countBadge.style.display = 'none';
+		}
+
+		// Update accessible label to include unread count for screen readers
+		if (this.label) {
+			const baseLabel = this.action.label || localize('toggleSidebarA11y', "Toggle Primary Side Bar");
+			if (unreadCount > 0 && !sidebarVisible) {
+				this.label.setAttribute('aria-label', localize('toggleSidebarUnread', "{0}, {1} unread session(s)", baseLabel, unreadCount));
+			} else {
+				this.label.setAttribute('aria-label', baseLabel);
+			}
+		}
+	}
+
+	private _countUnreadSessions(): number {
+		let unread = 0;
+		for (const session of this.sessionsManagementService.getSessions()) {
+			if (!session.isArchived.get() && session.status.get() === SessionStatus.Completed && !session.isRead.get()) {
+				unread++;
+			}
+		}
+		return unread;
+	}
+}
+
 /**
  * Provides custom rendering for the sessions title bar widget
  * in the command center. Uses IActionViewItemService to render a custom widget
@@ -364,5 +406,10 @@ export class SessionsTitleBarContribution extends Disposable implements IWorkben
 			}
 			return instantiationService.createInstance(SessionsTitleBarWidget, action, options);
 		}, undefined));
+
+		// Register custom view item for sidebar toggle with unread badge
+		this._register(actionViewItemService.register(Menus.TitleBarLeftLayout, 'workbench.action.agentToggleSidebarVisibility', (action, options) => {
+			return instantiationService.createInstance(SidebarToggleActionViewItem, undefined, action, options);
+		}, undefined));
 	}
 }