diff --git a/src/Misc/layoutbin/update.cmd.template b/src/Misc/layoutbin/update.cmd.template
index 70d86fd60..66267a727 100644
--- a/src/Misc/layoutbin/update.cmd.template
+++ b/src/Misc/layoutbin/update.cmd.template
@@ -120,6 +120,9 @@ if ERRORLEVEL 1 (
 
 echo [%date% %time%] Update succeed >> "%logfile%" 2>&1
 
+type nul > update.finished
+echo [%date% %time%] update.finished file creation succeed >> "%logfile%" 2>&1
+
 rem rename the update log file with %logfile%.succeed/.failed/succeedneedrestart
 rem runner service host can base on the log file name determin the result of the runner update
 echo [%date% %time%] Rename "%logfile%" to be "%logfile%.succeed" >> "%logfile%" 2>&1
diff --git a/src/Misc/layoutbin/update.sh.template b/src/Misc/layoutbin/update.sh.template
index 8c9f508a0..4ca6b00e6 100755
--- a/src/Misc/layoutbin/update.sh.template
+++ b/src/Misc/layoutbin/update.sh.template
@@ -180,6 +180,9 @@ fi
 
 date "+[%F %T-%4N] Update succeed" >> "$logfile"
 
+touch update.finished
+date "+[%F %T-%4N] update.finished file creation succeed" >> "$logfile"
+
 # rename the update log file with %logfile%.succeed/.failed/succeedneedrestart
 # runner service host can base on the log file name determin the result of the runner update
 date "+[%F %T-%4N] Rename $logfile to be $logfile.succeed" >> "$logfile" 2>&1
diff --git a/src/Misc/layoutroot/run-helper.cmd.template b/src/Misc/layoutroot/run-helper.cmd.template
index 562038336..23e42467b 100644
--- a/src/Misc/layoutroot/run-helper.cmd.template
+++ b/src/Misc/layoutroot/run-helper.cmd.template
@@ -1,5 +1,5 @@
 @echo off
-
+SET UPDATEFILE=update.finished
 "%~dp0\bin\Runner.Listener.exe" run %*
 
 rem using `if %ERRORLEVEL% EQU N` insterad of `if ERRORLEVEL N`
@@ -22,16 +22,30 @@ if %ERRORLEVEL% EQU 2 (
 )
 
 if %ERRORLEVEL% EQU 3 (
-  rem Sleep 5 seconds to wait for the runner update process finish
-  echo "Runner listener exit because of updating, re-launch runner in 5 seconds"
-  ping 127.0.0.1 -n 6 -w 1000 >NUL
+  rem Wait for 30 seconds or for flag file to exists for the ephemeral runner update process finish
+  echo "Runner listener exit because of updating, re-launch runner after successful update"
+  FOR /L %%G IN (1,1,30) DO (
+    IF EXIST %UPDATEFILE% (
+      echo "Update finished successfully."
+      del %FILE%
+      exit /b 1
+    )
+    ping 127.0.0.1 -n 2 -w 1000 >NUL
+  )
   exit /b 1
 )
 
 if %ERRORLEVEL% EQU 4 (
-  rem Sleep 5 seconds to wait for the ephemeral runner update process finish
-  echo "Runner listener exit because of updating, re-launch ephemeral runner in 5 seconds"
-  ping 127.0.0.1 -n 6 -w 1000 >NUL
+  rem Wait for 30 seconds or for flag file to exists for the runner update process finish
+  echo "Runner listener exit because of updating, re-launch runner after successful update"
+  FOR /L %%G IN (1,1,30) DO (
+    IF EXIST %UPDATEFILE% (
+      echo "Update finished successfully."
+      del %FILE%
+      exit /b 1
+    )
+    ping 127.0.0.1 -n 2 -w 1000 >NUL
+  )
   exit /b 1
 )
 
diff --git a/src/Misc/layoutroot/run-helper.sh.template b/src/Misc/layoutroot/run-helper.sh.template
index 831ae3a3f..42f11eb01 100755
--- a/src/Misc/layoutroot/run-helper.sh.template
+++ b/src/Misc/layoutroot/run-helper.sh.template
@@ -17,6 +17,8 @@ while [ -h "$SOURCE" ]; do # resolve $SOURCE until the file is no longer a symli
     [[ $SOURCE != /* ]] && SOURCE="$DIR/$SOURCE" # if $SOURCE was a relative symlink, we need to resolve it relative to the path where the symlink file was located
 done
 DIR="$( cd -P "$( dirname "$SOURCE" )" && pwd )"
+
+updateFile="update.finished"
 "$DIR"/bin/Runner.Listener run $*
 
 returnCode=$?
@@ -31,14 +33,28 @@ elif [[ $returnCode == 2 ]]; then
     "$DIR"/safe_sleep.sh 5
     exit 2
 elif [[ $returnCode == 3 ]]; then
-    # Sleep 5 seconds to wait for the runner update process finish
-    echo "Runner listener exit because of updating, re-launch runner in 5 seconds"
-    "$DIR"/safe_sleep.sh 5
+    # Wait for 30 seconds or for flag file to exists for the runner update process finish
+    echo "Runner listener exit because of updating, re-launch runner after successful update"
+    for i in {0..30} do
+        if test -f "$updateFile"; then
+            echo "Update finished successfully."
+            rm "$updateFile"
+            break
+        fi
+        "$DIR"/safe_sleep.sh 1
+    done
     exit 2
 elif [[ $returnCode == 4 ]]; then
-    # Sleep 5 seconds to wait for the ephemeral runner update process finish
-    echo "Runner listener exit because of updating, re-launch ephemeral runner in 5 seconds"
-    "$DIR"/safe_sleep.sh 5
+    # Wait for 30 seconds or for flag file to exists for the ephemeral runner update process finish
+    echo "Runner listener exit because of updating, re-launch runner after successful update"
+    for i in {0..30} do
+        if test -f "$updateFile"; then
+            echo "Update finished successfully."
+            rm "$updateFile"
+            break
+        fi
+        "$DIR"/safe_sleep.sh 1
+    done
     exit 2
 else
     echo "Exiting with unknown error code: ${returnCode}"
diff --git a/src/Runner.Listener/SelfUpdater.cs b/src/Runner.Listener/SelfUpdater.cs
index 81e2d1dec..3c8242402 100644
--- a/src/Runner.Listener/SelfUpdater.cs
+++ b/src/Runner.Listener/SelfUpdater.cs
@@ -131,6 +131,8 @@ namespace GitHub.Runner.Listener
                 // For L0, we will skip execute update script.
                 if (string.IsNullOrEmpty(Environment.GetEnvironmentVariable("_GITHUB_ACTION_EXECUTE_UPDATE_SCRIPT")))
                 {
+                    string flagFile = "update.finished";
+                    IOUtil.DeleteFile(flagFile);
                     // kick off update script
                     Process invokeScript = new Process();
 #if OS_WINDOWS
@@ -294,12 +296,12 @@ namespace GitHub.Runner.Listener
                         archiveFile = Path.Combine(HostContext.GetDirectory(WellKnownDirectory.Root), $"runner{targetVersion}.tar.gz");
                     }
 
-                    if (File.Exists(archiveFile)) 
+                    if (File.Exists(archiveFile))
                     {
                         _updateTrace.Enqueue($"Mocking update with file: '{archiveFile}' and targetVersion: '{targetVersion}', nothing is downloaded");
                         _terminal.WriteLine($"Mocking update with file: '{archiveFile}' and targetVersion: '{targetVersion}', nothing is downloaded");
                     }
-                    else 
+                    else
                     {
                         archiveFile = null;
                         _terminal.WriteLine($"Mock runner archive not found at {archiveFile} for target version {targetVersion}, proceeding with download instead");