diff --git a/packages/cli/src/ui/AppContainer.tsx b/packages/cli/src/ui/AppContainer.tsx
index 21b47e0ee5..39764693c9 100644
--- a/packages/cli/src/ui/AppContainer.tsx
+++ b/packages/cli/src/ui/AppContainer.tsx
@@ -401,7 +401,9 @@ export const AppContainer = (props: AppContainerProps) => {
   const [planModeUIHistoryStartIndex, setPlanModeUIHistoryStartIndex] =
     useState<number | null>(() =>
       // Initialize if starting in PLAN mode (e.g. session resume)
-      config.getApprovalMode() === ApprovalMode.PLAN ? 0 : null,
+      config.getApprovalMode() === ApprovalMode.PLAN
+        ? config.getPlanModeHistoryStartIndex()
+        : null,
     );
 
   useEffect(() => {
@@ -411,7 +413,7 @@ export const AppContainer = (props: AppContainerProps) => {
         // This ensures that if we are already in PLAN mode and another
         // event fires, we don't accidentally move the start index forward.
         setPlanModeUIHistoryStartIndex((prev) =>
-          prev === null ? historyManager.history.length : prev,
+          prev === null ? config.getPlanModeHistoryStartIndex() : prev,
         );
       } else {
         // Reset the index when leaving PLAN mode
@@ -422,7 +424,7 @@ export const AppContainer = (props: AppContainerProps) => {
     return () => {
       coreEvents.off(CoreEvent.ApprovalModeChanged, handleApprovalModeChanged);
     };
-  }, [historyManager.history.length]);
+  }, [config]);
 
   const logger = useLogger(config.storage);
   const { inputHistory, addInput, initializeFromLogger } =
diff --git a/packages/cli/src/ui/components/ExitPlanModeDialog.tsx b/packages/cli/src/ui/components/ExitPlanModeDialog.tsx
index 1be6163ebd..4e97b1709e 100644
--- a/packages/cli/src/ui/components/ExitPlanModeDialog.tsx
+++ b/packages/cli/src/ui/components/ExitPlanModeDialog.tsx
@@ -169,8 +169,18 @@ export const ExitPlanModeDialog: React.FC<ExitPlanModeDialogProps> = ({
   const [step, setStep] = useState<ApprovalStep>(ApprovalStep.PLAN_APPROVAL);
   const [selectedApprovalMode, setSelectedApprovalMode] =
     useState<ApprovalMode | null>(null);
+  const [pendingApproval, setPendingApproval] = useState<{
+    mode: ApprovalMode;
+    clear: boolean;
+  } | null>(null);
   const { setSetting } = useSettingsStore();
 
+  useEffect(() => {
+    if (pendingApproval) {
+      onApprove(pendingApproval.mode, pendingApproval.clear);
+    }
+  }, [pendingApproval, onApprove]);
+
   const handleOpenEditor = useCallback(async () => {
     try {
       await openFileInEditor(planPath, stdin, setRawMode, getPreferredEditor());
@@ -356,11 +366,10 @@ export const ExitPlanModeDialog: React.FC<ExitPlanModeDialogProps> = ({
             }
 
             if (selectedApprovalMode) {
-              // Wrap in setTimeout to avoid 'Maximum update depth exceeded'
-              // when setSetting triggers a re-render of the parent.
-              setTimeout(() => {
-                onApprove(selectedApprovalMode, clearConversation);
-              }, 0);
+              setPendingApproval({
+                mode: selectedApprovalMode,
+                clear: clearConversation,
+              });
             }
           }}
           onCancel={() => setStep(ApprovalStep.PLAN_APPROVAL)}
diff --git a/packages/core/src/config/config.test.ts b/packages/core/src/config/config.test.ts
index 3844138d50..fbfc96e662 100644
--- a/packages/core/src/config/config.test.ts
+++ b/packages/core/src/config/config.test.ts
@@ -3117,3 +3117,42 @@ describe('Model Persistence Bug Fix (#19864)', () => {
     expect(config.getModel()).toBe(PREVIEW_GEMINI_3_1_MODEL);
   });
 });
+
+describe('isClearContextOnPlanApprovalEnabled', () => {
+  const baseParams: ConfigParameters = {
+    sessionId: 'test',
+    targetDir: '.',
+    debugMode: false,
+    model: 'test-model',
+    cwd: '.',
+  };
+
+  it('should return false by default when no setting or override is present', () => {
+    const config = new Config(baseParams);
+    expect(config.isClearContextOnPlanApprovalEnabled()).toBe(false);
+  });
+
+  it('should return true when a session override is set to true', () => {
+    const config = new Config(baseParams);
+    config.setClearContextOnPlanApprovalSessionOverride(true);
+    expect(config.isClearContextOnPlanApprovalEnabled()).toBe(true);
+  });
+
+  it('should return false when a session override is set to false', () => {
+    const config = new Config(baseParams);
+    config.setClearContextOnPlanApprovalSessionOverride(false);
+    expect(config.isClearContextOnPlanApprovalEnabled()).toBe(false);
+  });
+
+  it('should prefer session override over persistent setting', () => {
+    const config = new Config({
+      ...baseParams,
+      planSettings: {
+        clearContextOnApproval: true,
+      },
+    } as unknown as ConfigParameters);
+    expect(config.isClearContextOnPlanApprovalEnabled()).toBe(true);
+    config.setClearContextOnPlanApprovalSessionOverride(false);
+    expect(config.isClearContextOnPlanApprovalEnabled()).toBe(false);
+  });
+});
diff --git a/packages/core/src/config/config.ts b/packages/core/src/config/config.ts
index e08ceeb408..b3b59f89ca 100644
--- a/packages/core/src/config/config.ts
+++ b/packages/core/src/config/config.ts
@@ -2487,7 +2487,7 @@ export class Config implements McpContext {
   }
 
   isClearContextOnPlanApprovalEnabled(): boolean {
-    return this.getClearContextOnPlanApproval() ?? true;
+    return this.getClearContextOnPlanApproval() ?? false;
   }
 
   setClearContextOnPlanApprovalSessionOverride(value: boolean): void {
diff --git a/packages/core/src/tools/exit-plan-mode.ts b/packages/core/src/tools/exit-plan-mode.ts
index ee17d35d62..307cfbcd13 100644
--- a/packages/core/src/tools/exit-plan-mode.ts
+++ b/packages/core/src/tools/exit-plan-mode.ts
@@ -220,13 +220,28 @@ export class ExitPlanModeInvocation extends BaseToolInvocation<
           const history = geminiClient.getHistory();
           const startIndex = this.config.getPlanModeHistoryStartIndex();
 
-          // Find the first user message at or after the start index.
-          // This represents the beginning of the current planning phase.
+          // Find the user message that initiated the plan mode.
           let planningUserIndex = -1;
-          for (let i = startIndex; i < history.length - 1; i++) {
-            if (history[i].role === 'user') {
-              planningUserIndex = i;
-              break;
+
+          // If the message exactly at startIndex is a user message, then plan mode
+          // was initiated via a UI/CLI command before the message was added to history.
+          if (
+            startIndex < history.length &&
+            history[startIndex].role === 'user'
+          ) {
+            planningUserIndex = startIndex;
+          } else {
+            // Otherwise, Plan mode was initiated via the `enter_plan_mode` tool.
+            // The initiating user message is the last user message before startIndex.
+            for (
+              let i = Math.min(startIndex, history.length - 1);
+              i >= 0;
+              i--
+            ) {
+              if (history[i].role === 'user') {
+                planningUserIndex = i;
+                break;
+              }
             }
           }