diff --git a/server/jetstream_leafnode_test.go b/server/jetstream_leafnode_test.go
index bb2337d7f47..f0fa78881f7 100644
--- a/server/jetstream_leafnode_test.go
+++ b/server/jetstream_leafnode_test.go
@@ -1242,3 +1242,85 @@ func TestJetStreamLeafNodeSvcImportExportCycle(t *testing.T) {
 	_, err = js.Publish("foo", []byte("msg"))
 	require_NoError(t, err)
 }
+
+func TestJetStreamLeafNodeJSClusterMigrateRecovery(t *testing.T) {
+	tmpl := strings.Replace(jsClusterAccountsTempl, "store_dir:", "domain: hub, store_dir:", 1)
+	c := createJetStreamCluster(t, tmpl, "hub", _EMPTY_, 3, 12232, true)
+	defer c.shutdown()
+
+	tmpl = strings.Replace(jsClusterTemplWithLeafNode, "store_dir:", "domain: leaf, store_dir:", 1)
+	lnc := c.createLeafNodesWithTemplateAndStartPort(tmpl, "leaf", 3, 23913)
+	defer lnc.shutdown()
+
+	lnc.waitOnClusterReady()
+	for _, s := range lnc.servers {
+		s.setJetStreamMigrateOnRemoteLeaf()
+	}
+
+	nc, _ := jsClientConnect(t, lnc.randomServer())
+	defer nc.Close()
+
+	ljs, err := nc.JetStream(nats.Domain("leaf"))
+	require_NoError(t, err)
+
+	// Create an asset in the leafnode cluster.
+	si, err := ljs.AddStream(&nats.StreamConfig{
+		Name:     "TEST",
+		Subjects: []string{"foo"},
+		Replicas: 3,
+	})
+	require_NoError(t, err)
+	require_Equal(t, si.Cluster.Name, "leaf")
+	require_NotEqual(t, si.Cluster.Leader, noLeader)
+	require_Equal(t, len(si.Cluster.Replicas), 2)
+
+	// Count how many remotes each server in the leafnode cluster is
+	// supposed to have and then take them down.
+	remotes := map[*Server]int{}
+	for _, s := range lnc.servers {
+		remotes[s] += len(s.leafRemoteCfgs)
+		s.closeAndDisableLeafnodes()
+		checkLeafNodeConnectedCount(t, s, 0)
+	}
+
+	// The Raft nodes in the leafnode cluster now need some time to
+	// notice that they're no longer receiving AEs from a leader, as
+	// they should have been forced into observer mode. Check that
+	// this is the case.
+	time.Sleep(maxElectionTimeout)
+	for _, s := range lnc.servers {
+		s.rnMu.RLock()
+		for name, n := range s.raftNodes {
+			// We don't expect the metagroup to have turned into an
+			// observer but all other assets should have done.
+			if name == defaultMetaGroupName {
+				require_False(t, n.IsObserver())
+			} else {
+				require_True(t, n.IsObserver())
+			}
+		}
+		s.rnMu.RUnlock()
+	}
+
+	// Bring the leafnode connections back up.
+	for _, s := range lnc.servers {
+		s.reEnableLeafnodes()
+		checkLeafNodeConnectedCount(t, s, remotes[s])
+	}
+
+	// Wait for nodes to notice they are no longer in observer mode
+	// and to leave observer mode.
+	time.Sleep(maxElectionTimeout)
+	for _, s := range lnc.servers {
+		s.rnMu.RLock()
+		for _, n := range s.raftNodes {
+			require_False(t, n.IsObserver())
+		}
+		s.rnMu.RUnlock()
+	}
+
+	// Previously nodes would have left observer mode but then would
+	// have failed to elect a stream leader as they were stuck on a
+	// long election timer. Now this should work reliably.
+	lnc.waitOnStreamLeader(globalAccountName, "TEST")
+}
diff --git a/server/raft.go b/server/raft.go
index 470ee9da824..c748470260d 100644
--- a/server/raft.go
+++ b/server/raft.go
@@ -235,16 +235,18 @@ const (
 	hbIntervalDefault              = 1 * time.Second
 	lostQuorumIntervalDefault      = hbIntervalDefault * 10 // 10 seconds
 	lostQuorumCheckIntervalDefault = hbIntervalDefault * 10 // 10 seconds
+	observerModeIntervalDefault    = 48 * time.Hour
 )
 
 var (
-	minElectionTimeout = minElectionTimeoutDefault
-	maxElectionTimeout = maxElectionTimeoutDefault
-	minCampaignTimeout = minCampaignTimeoutDefault
-	maxCampaignTimeout = maxCampaignTimeoutDefault
-	hbInterval         = hbIntervalDefault
-	lostQuorumInterval = lostQuorumIntervalDefault
-	lostQuorumCheck    = lostQuorumCheckIntervalDefault
+	minElectionTimeout   = minElectionTimeoutDefault
+	maxElectionTimeout   = maxElectionTimeoutDefault
+	minCampaignTimeout   = minCampaignTimeoutDefault
+	maxCampaignTimeout   = maxCampaignTimeoutDefault
+	hbInterval           = hbIntervalDefault
+	lostQuorumInterval   = lostQuorumIntervalDefault
+	lostQuorumCheck      = lostQuorumCheckIntervalDefault
+	observerModeInterval = observerModeIntervalDefault
 )
 
 type RaftConfig struct {
@@ -875,7 +877,7 @@ func (n *raft) PauseApply() error {
 	n.hcommit = n.commit
 	// Also prevent us from trying to become a leader while paused and catching up.
 	n.pobserver, n.observer = n.observer, true
-	n.resetElect(48 * time.Hour)
+	n.resetElect(observerModeInterval)
 
 	return nil
 }
@@ -1895,8 +1897,16 @@ func (n *raft) SetObserver(isObserver bool) {
 func (n *raft) setObserver(isObserver bool, extSt extensionState) {
 	n.Lock()
 	defer n.Unlock()
+
+	wasObserver := n.observer
 	n.observer = isObserver
 	n.extSt = extSt
+
+	// If we're leaving observer state then reset the election timer or
+	// we might end up waiting for up to the observerModeInterval.
+	if wasObserver && !isObserver {
+		n.resetElect(randCampaignTimeout())
+	}
 }
 
 // processAppendEntries is called by the Raft state machine when there are
@@ -1946,7 +1956,7 @@ func (n *raft) runAsFollower() {
 				n.resetElectionTimeoutWithLock()
 				n.debug("Not switching to candidate, no resources")
 			} else if n.IsObserver() {
-				n.resetElectWithLock(48 * time.Hour)
+				n.resetElectWithLock(observerModeInterval)
 				n.debug("Not switching to candidate, observer only")
 			} else if n.isCatchingUp() {
 				n.debug("Not switching to candidate, catching up")
diff --git a/server/raft_test.go b/server/raft_test.go
index 06639abe16b..5e5ab4b630c 100644
--- a/server/raft_test.go
+++ b/server/raft_test.go
@@ -489,3 +489,32 @@ func TestNRGHeartbeatOnLeaderChange(t *testing.T) {
 		rg.waitOnLeader()
 	}
 }
+
+func TestNRGElectionTimerAfterObserver(t *testing.T) {
+	c := createJetStreamClusterExplicit(t, "R3S", 3)
+	defer c.shutdown()
+
+	rg := c.createMemRaftGroup("TEST", 3, newStateAdder)
+	rg.waitOnLeader()
+
+	for _, n := range rg {
+		n.node().SetObserver(true)
+	}
+
+	time.Sleep(maxElectionTimeout)
+	before := time.Now()
+
+	for _, n := range rg {
+		n.node().SetObserver(false)
+	}
+
+	time.Sleep(maxCampaignTimeout)
+
+	for _, n := range rg {
+		rn := n.node().(*raft)
+		rn.RLock()
+		etlr := rn.etlr
+		rn.RUnlock()
+		require_True(t, etlr.After(before))
+	}
+}