diff --git a/src/oauth/login-flow-state.ts b/src/oauth/login-flow-state.ts
index 3a52a6a7151..0de081f63e1 100644
--- a/src/oauth/login-flow-state.ts
+++ b/src/oauth/login-flow-state.ts
@@ -305,7 +305,11 @@ export function cancelLoginFlow(provider: string, flowId?: string): boolean {
   const active = loginAbort.get(flowKey);
   const existing = loginState.get(flowKey);
   if ((active?.provider ?? loginFlowProvider(flowKey)) !== provider) return false;
-  if (!active && (!existing || existing.done)) return false;
+  if (!active) {
+    if (!existing) return false;
+    dropLoginFlow(flowKey);
+    return true;
+  }
   abandonLoginFlow(flowKey, { error: "Login cancelled", errorCode: "no_pending_login" });
   return true;
 }
diff --git a/tests/oauth/oauth-cancel-clears-transient-error.test.ts b/tests/oauth/oauth-cancel-clears-transient-error.test.ts
new file mode 100644
index 00000000000..a3306d777cf
--- /dev/null
+++ b/tests/oauth/oauth-cancel-clears-transient-error.test.ts
@@ -0,0 +1,28 @@
+import { describe, expect, test } from "bun:test";
+import { cancelLoginFlow, getLoginStatus } from "../../src/oauth";
+import { loginState } from "../../src/oauth/login-flow-state";
+
+describe("OAuth login cancellation and error lifecycle", () => {
+  test("cancelLoginFlow clears finalized transient error state so it stops masking status", () => {
+    const provider = "google-antigravity";
+    // Simulate a failed/aborted login attempt that settled with an error
+    loginState.set(provider, {
+      done: true,
+      error: "OAuth authentication failed. Check the OpenCodex account status and retry.",
+    });
+
+    // Before cancel, getLoginStatus reflects the error
+    let status = getLoginStatus(provider);
+    expect(status.error).toBe("OAuth authentication failed. Check the OpenCodex account status and retry.");
+    expect(status.done).toBe(true);
+
+    // Call cancelLoginFlow
+    const cancelled = cancelLoginFlow(provider);
+    expect(cancelled).toBe(true);
+
+    // After cancel, the transient error must be cleared
+    status = getLoginStatus(provider);
+    expect(status.error).toBeUndefined();
+    expect(status.done).toBe(false);
+  });
+});