diff --git a/lib/bindings/python/tests/cancellation/test_cancellation.py b/lib/bindings/python/tests/cancellation/test_cancellation.py
index 9171e015b6ac..7dd06a02b007 100644
--- a/lib/bindings/python/tests/cancellation/test_cancellation.py
+++ b/lib/bindings/python/tests/cancellation/test_cancellation.py
@@ -11,6 +11,7 @@
     pytest.mark.gpu_0,
     pytest.mark.pre_merge,
     pytest.mark.unit,
+    pytest.mark.timeout(30),
 ]
 
 
@@ -23,6 +24,7 @@ def __init__(self):
         self.context_is_stopped = False
         self.context_is_killed = False
         self.context_metadata: dict[str, str] = {}
+        self.context_cancelled = asyncio.Event()
 
     async def generate(self, request, context):
         print("################## generate called ######################")
@@ -53,6 +55,7 @@ async def _generate_until_context_cancelled(self, request, context):
                 self.context_is_stopped = True
                 self.context_is_killed = context.is_killed()
                 self.context_metadata = dict(context.metadata.items())
+                self.context_cancelled.set()
                 raise asyncio.CancelledError
 
             if context.is_killed():
@@ -60,6 +63,7 @@ async def _generate_until_context_cancelled(self, request, context):
                 self.context_is_stopped = context.is_stopped()
                 self.context_is_killed = True
                 self.context_metadata = dict(context.metadata.items())
+                self.context_cancelled.set()
                 raise asyncio.CancelledError
 
             await asyncio.sleep(0.1)
@@ -83,6 +87,7 @@ async def _generate_until_context_cancelled_with_metadata(self, request, context
                 self.context_is_stopped = True
                 self.context_is_killed = context.is_killed()
                 self.context_metadata = dict(context.metadata.items())
+                self.context_cancelled.set()
                 raise asyncio.CancelledError
 
             if context.is_killed():
@@ -90,6 +95,7 @@ async def _generate_until_context_cancelled_with_metadata(self, request, context
                 self.context_is_stopped = context.is_stopped()
                 self.context_is_killed = True
                 self.context_metadata = dict(context.metadata.items())
+                self.context_cancelled.set()
                 raise asyncio.CancelledError
 
             await asyncio.sleep(0.1)
@@ -221,8 +227,7 @@ async def test_client_context_cancel(temp_file_store, server, client):
 
         iteration_count += 1
 
-    # Give server a moment to process the cancellation
-    await asyncio.sleep(0.2)
+    await asyncio.wait_for(handler.context_cancelled.wait(), timeout=5)
 
     # Verify server detected the cancellation
     assert handler.context_is_stopped
@@ -256,7 +261,7 @@ async def test_client_context_cancel_preserves_metadata(
 
         iteration_count += 1
 
-    await asyncio.sleep(0.2)
+    await asyncio.wait_for(handler.context_cancelled.wait(), timeout=5)
 
     assert handler.context_is_stopped
     assert not handler.context_is_killed
@@ -350,6 +355,18 @@ async def test_server_raise_cancelled(temp_file_store, server, client):
     assert not handler.context_is_killed
 
 
+async def _wait_for_cancelled_request(request, handler):
+    stream = await request
+    # Cancellation propagates asynchronously, so responses can arrive before it completes.
+    try:
+        async for _ in stream:
+            pass
+    except ValueError as error:
+        if str(error) != "Cancelled: CancelledError":
+            raise
+    await handler.context_cancelled.wait()
+
+
 @pytest.mark.forked
 @pytest.mark.asyncio
 @pytest.mark.parametrize("request_plane", ["nats", "tcp"], indirect=True)
@@ -358,15 +375,8 @@ async def test_client_context_already_cancelled(temp_file_store, server, client)
     context = Context()
     context.stop_generating()
     # TODO: (DIS-830) The outgoing call should raise if context is cancelled
-    stream = await client.generate("_generate_until_context_cancelled", context=context)
-
-    async for _ in stream:
-        raise AssertionError(
-            "Request should be cancelled before any responses are generated"
-        )
-
-    # Give server a moment to update status
-    await asyncio.sleep(0.2)
+    request = client.generate("_generate_until_context_cancelled", context=context)
+    await asyncio.wait_for(_wait_for_cancelled_request(request, handler), timeout=5)
 
     # Verify server context cancellation status
     assert handler.context_is_stopped
@@ -384,15 +394,7 @@ async def test_client_context_cancel_before_await_request(
     request = client.generate("_generate_until_context_cancelled", context=context)
     context.stop_generating()
     # TODO: (DIS-830) The outgoing call should raise if context is cancelled
-    stream = await request
-
-    async for _ in stream:
-        raise AssertionError(
-            "Request should be cancelled before any responses are generated"
-        )
-
-    # Give server a moment to update status
-    await asyncio.sleep(0.2)
+    await asyncio.wait_for(_wait_for_cancelled_request(request, handler), timeout=5)
 
     # Verify server context cancellation status
     assert handler.context_is_stopped