diff --git a/src/plugins/dashboard/public/application/hooks/use_dashboard_container.test.tsx b/src/plugins/dashboard/public/application/hooks/use_dashboard_container.test.tsx
new file mode 100644
index 000000000000..d14b4056a64c
--- /dev/null
+++ b/src/plugins/dashboard/public/application/hooks/use_dashboard_container.test.tsx
@@ -0,0 +1,173 @@
+/*
+ * Copyright Elasticsearch B.V. and/or licensed to Elasticsearch B.V. under one
+ * or more contributor license agreements. Licensed under the Elastic License
+ * 2.0 and the Server Side Public License, v 1; you may not use this file except
+ * in compliance with, at your election, the Elastic License 2.0 or the Server
+ * Side Public License, v 1.
+ */
+
+import { useDashboardContainer } from './use_dashboard_container';
+import { renderHook, act } from '@testing-library/react-hooks';
+import { KibanaContextProvider } from '../../../../kibana_react/public';
+import React from 'react';
+import { DashboardStateManager } from '../dashboard_state_manager';
+import { getSavedDashboardMock } from '../test_helpers';
+import { createKbnUrlStateStorage, defer } from '../../../../kibana_utils/public';
+import { createBrowserHistory } from 'history';
+import { dataPluginMock } from '../../../../data/public/mocks';
+import { embeddablePluginMock } from '../../../../embeddable/public/mocks';
+import { DashboardCapabilities } from '../types';
+import { EmbeddableFactory } from '../../../../embeddable/public';
+import { HelloWorldEmbeddable } from '../../../../embeddable/public/tests/fixtures';
+import { DashboardContainer } from '../embeddable';
+
+const savedDashboard = getSavedDashboardMock();
+
+// TS is *very* picky with type guards / predicates. can't just use jest.fn()
+function mockHasTaggingCapabilities(obj: any): obj is any {
+  return false;
+}
+
+const history = createBrowserHistory();
+const createDashboardState = () =>
+  new DashboardStateManager({
+    savedDashboard,
+    hideWriteControls: false,
+    allowByValueEmbeddables: false,
+    kibanaVersion: '7.0.0',
+    kbnUrlStateStorage: createKbnUrlStateStorage(),
+    history: createBrowserHistory(),
+    hasTaggingCapabilities: mockHasTaggingCapabilities,
+  });
+
+const defaultCapabilities: DashboardCapabilities = {
+  show: false,
+  createNew: false,
+  saveQuery: false,
+  createShortUrl: false,
+  hideWriteControls: true,
+  mapsCapabilities: { save: false },
+  visualizeCapabilities: { save: false },
+  storeSearchSession: true,
+};
+
+const services = {
+  dashboardCapabilities: defaultCapabilities,
+  data: dataPluginMock.createStartContract(),
+  embeddable: embeddablePluginMock.createStartContract(),
+  scopedHistory: history,
+};
+
+const setupEmbeddableFactory = () => {
+  const embeddable = new HelloWorldEmbeddable({ id: 'id' });
+  const deferEmbeddableCreate = defer();
+  services.embeddable.getEmbeddableFactory.mockImplementation(
+    () =>
+      (({
+        create: () => deferEmbeddableCreate.promise,
+      } as unknown) as EmbeddableFactory)
+  );
+  const destroySpy = jest.spyOn(embeddable, 'destroy');
+
+  return {
+    destroySpy,
+    embeddable,
+    createEmbeddable: () => {
+      act(() => {
+        deferEmbeddableCreate.resolve(embeddable);
+      });
+    },
+  };
+};
+
+test('container is destroyed on unmount', async () => {
+  const { createEmbeddable, destroySpy, embeddable } = setupEmbeddableFactory();
+
+  const state = createDashboardState();
+  const { result, unmount, waitForNextUpdate } = renderHook(
+    () => useDashboardContainer(state, history, false),
+    {
+      wrapper: ({ children }) => (
+        <KibanaContextProvider services={services}>{children}</KibanaContextProvider>
+      ),
+    }
+  );
+
+  expect(result.current).toBeNull(); // null on initial render
+
+  createEmbeddable();
+
+  await waitForNextUpdate();
+
+  expect(embeddable).toBe(result.current);
+  expect(destroySpy).not.toBeCalled();
+
+  unmount();
+
+  expect(destroySpy).toBeCalled();
+});
+
+test('old container is destroyed on new dashboardStateManager', async () => {
+  const embeddableFactoryOld = setupEmbeddableFactory();
+
+  const { result, waitForNextUpdate, rerender } = renderHook<
+    DashboardStateManager,
+    DashboardContainer | null
+  >((dashboardState) => useDashboardContainer(dashboardState, history, false), {
+    wrapper: ({ children }) => (
+      <KibanaContextProvider services={services}>{children}</KibanaContextProvider>
+    ),
+    initialProps: createDashboardState(),
+  });
+
+  expect(result.current).toBeNull(); // null on initial render
+
+  embeddableFactoryOld.createEmbeddable();
+
+  await waitForNextUpdate();
+
+  expect(embeddableFactoryOld.embeddable).toBe(result.current);
+  expect(embeddableFactoryOld.destroySpy).not.toBeCalled();
+
+  const embeddableFactoryNew = setupEmbeddableFactory();
+  rerender(createDashboardState());
+
+  embeddableFactoryNew.createEmbeddable();
+
+  await waitForNextUpdate();
+
+  expect(embeddableFactoryNew.embeddable).toBe(result.current);
+
+  expect(embeddableFactoryNew.destroySpy).not.toBeCalled();
+  expect(embeddableFactoryOld.destroySpy).toBeCalled();
+});
+
+test('destroyed if rerendered before resolved', async () => {
+  const embeddableFactoryOld = setupEmbeddableFactory();
+
+  const { result, waitForNextUpdate, rerender } = renderHook<
+    DashboardStateManager,
+    DashboardContainer | null
+  >((dashboardState) => useDashboardContainer(dashboardState, history, false), {
+    wrapper: ({ children }) => (
+      <KibanaContextProvider services={services}>{children}</KibanaContextProvider>
+    ),
+    initialProps: createDashboardState(),
+  });
+
+  expect(result.current).toBeNull(); // null on initial render
+
+  const embeddableFactoryNew = setupEmbeddableFactory();
+  rerender(createDashboardState());
+  embeddableFactoryNew.createEmbeddable();
+  await waitForNextUpdate();
+  expect(embeddableFactoryNew.embeddable).toBe(result.current);
+  expect(embeddableFactoryNew.destroySpy).not.toBeCalled();
+
+  embeddableFactoryOld.createEmbeddable();
+
+  await act(() => Promise.resolve()); // Can't use waitFor from hooks, because there is no hook update
+  expect(embeddableFactoryNew.embeddable).toBe(result.current);
+  expect(embeddableFactoryNew.destroySpy).not.toBeCalled();
+  expect(embeddableFactoryOld.destroySpy).toBeCalled();
+});
diff --git a/src/plugins/dashboard/public/application/hooks/use_dashboard_container.ts b/src/plugins/dashboard/public/application/hooks/use_dashboard_container.ts
index a3a31ee52836..b27322b6bec5 100644
--- a/src/plugins/dashboard/public/application/hooks/use_dashboard_container.ts
+++ b/src/plugins/dashboard/public/application/hooks/use_dashboard_container.ts
@@ -7,7 +7,6 @@
  */
 
 import { useEffect, useState } from 'react';
-import _ from 'lodash';
 import { History } from 'history';
 
 import { useKibana } from '../../services/kibana_react';
@@ -15,6 +14,7 @@ import {
   ContainerOutput,
   EmbeddableFactoryNotFoundError,
   EmbeddableInput,
+  ErrorEmbeddable,
   isErrorEmbeddable,
   ViewMode,
 } from '../../services/embeddable';
@@ -70,8 +70,10 @@ export const useDashboardContainer = (
 
     const incomingEmbeddable = embeddable.getStateTransfer().getIncomingEmbeddablePackage(true);
 
+    let canceled = false;
+    let pendingContainer: DashboardContainer | ErrorEmbeddable | null | undefined;
     (async function createContainer() {
-      const newContainer = await dashboardFactory.create(
+      pendingContainer = await dashboardFactory.create(
         getDashboardContainerInput({
           dashboardCapabilities,
           dashboardStateManager,
@@ -82,12 +84,27 @@ export const useDashboardContainer = (
         })
       );
 
-      if (!newContainer || isErrorEmbeddable(newContainer)) {
+      // already new container is being created
+      // no longer interested in the pending one
+      if (canceled) {
+        try {
+          pendingContainer?.destroy();
+          pendingContainer = null;
+        } catch (e) {
+          // destroy could throw if something has already destroyed the container
+          // eslint-disable-next-line no-console
+          console.warn(e);
+        }
+
+        return;
+      }
+
+      if (!pendingContainer || isErrorEmbeddable(pendingContainer)) {
         return;
       }
 
       // inject switch view mode callback for the empty screen to use
-      newContainer.switchViewMode = (newViewMode: ViewMode) =>
+      pendingContainer.switchViewMode = (newViewMode: ViewMode) =>
         dashboardStateManager.switchViewMode(newViewMode);
 
       // If the incoming embeddable is newly created, or doesn't exist in the current panels list,
@@ -96,17 +113,28 @@ export const useDashboardContainer = (
         incomingEmbeddable &&
         (!incomingEmbeddable?.embeddableId ||
           (incomingEmbeddable.embeddableId &&
-            !newContainer.getInput().panels[incomingEmbeddable.embeddableId]))
+            !pendingContainer.getInput().panels[incomingEmbeddable.embeddableId]))
       ) {
         dashboardStateManager.switchViewMode(ViewMode.EDIT);
-        newContainer.addNewEmbeddable<EmbeddableInput>(
+        pendingContainer.addNewEmbeddable<EmbeddableInput>(
           incomingEmbeddable.type,
           incomingEmbeddable.input
         );
       }
-      setDashboardContainer(newContainer);
+      setDashboardContainer(pendingContainer);
     })();
-    return () => setDashboardContainer(null);
+    return () => {
+      canceled = true;
+      try {
+        pendingContainer?.destroy();
+      } catch (e) {
+        // destroy could throw if something has already destroyed the container
+        // eslint-disable-next-line no-console
+        console.warn(e);
+      }
+
+      setDashboardContainer(null);
+    };
   }, [
     dashboardCapabilities,
     dashboardStateManager,