diff --git a/agent/proxy-tracker/mock_Logger.go b/agent/proxy-tracker/mock_Logger.go
new file mode 100644
index 000000000000..b4d28b096e86
--- /dev/null
+++ b/agent/proxy-tracker/mock_Logger.go
@@ -0,0 +1,31 @@
+// Code generated by mockery v2.32.4. DO NOT EDIT.
+
+package proxytracker
+
+import mock "github.com/stretchr/testify/mock"
+
+// MockLogger is an autogenerated mock type for the Logger type
+type MockLogger struct {
+	mock.Mock
+}
+
+// Error provides a mock function with given fields: args
+func (_m *MockLogger) Error(args ...interface{}) {
+	var _ca []interface{}
+	_ca = append(_ca, args...)
+	_m.Called(_ca...)
+}
+
+// NewMockLogger creates a new instance of MockLogger. It also registers a testing interface on the mock and a cleanup function to assert the mocks expectations.
+// The first argument is typically a *testing.T value.
+func NewMockLogger(t interface {
+	mock.TestingT
+	Cleanup(func())
+}) *MockLogger {
+	mock := &MockLogger{}
+	mock.Mock.Test(t)
+
+	t.Cleanup(func() { mock.AssertExpectations(t) })
+
+	return mock
+}
diff --git a/agent/proxy-tracker/mock_SessionLimiter.go b/agent/proxy-tracker/mock_SessionLimiter.go
new file mode 100644
index 000000000000..4a2c5f324a1b
--- /dev/null
+++ b/agent/proxy-tracker/mock_SessionLimiter.go
@@ -0,0 +1,53 @@
+// Code generated by mockery v2.32.4. DO NOT EDIT.
+
+package proxytracker
+
+import (
+	limiter "github.com/hashicorp/consul/agent/grpc-external/limiter"
+	mock "github.com/stretchr/testify/mock"
+)
+
+// MockSessionLimiter is an autogenerated mock type for the SessionLimiter type
+type MockSessionLimiter struct {
+	mock.Mock
+}
+
+// BeginSession provides a mock function with given fields:
+func (_m *MockSessionLimiter) BeginSession() (limiter.Session, error) {
+	ret := _m.Called()
+
+	var r0 limiter.Session
+	var r1 error
+	if rf, ok := ret.Get(0).(func() (limiter.Session, error)); ok {
+		return rf()
+	}
+	if rf, ok := ret.Get(0).(func() limiter.Session); ok {
+		r0 = rf()
+	} else {
+		if ret.Get(0) != nil {
+			r0 = ret.Get(0).(limiter.Session)
+		}
+	}
+
+	if rf, ok := ret.Get(1).(func() error); ok {
+		r1 = rf()
+	} else {
+		r1 = ret.Error(1)
+	}
+
+	return r0, r1
+}
+
+// NewMockSessionLimiter creates a new instance of MockSessionLimiter. It also registers a testing interface on the mock and a cleanup function to assert the mocks expectations.
+// The first argument is typically a *testing.T value.
+func NewMockSessionLimiter(t interface {
+	mock.TestingT
+	Cleanup(func())
+}) *MockSessionLimiter {
+	mock := &MockSessionLimiter{}
+	mock.Mock.Test(t)
+
+	t.Cleanup(func() { mock.AssertExpectations(t) })
+
+	return mock
+}
diff --git a/agent/proxy-tracker/proxy_tracker.go b/agent/proxy-tracker/proxy_tracker.go
new file mode 100644
index 000000000000..00c0cf23f990
--- /dev/null
+++ b/agent/proxy-tracker/proxy_tracker.go
@@ -0,0 +1,278 @@
+// Copyright (c) HashiCorp, Inc.
+// SPDX-License-Identifier: BUSL-1.1
+
+package proxytracker
+
+import (
+	"errors"
+	"fmt"
+	"sync"
+
+	"github.com/hashicorp/consul/internal/controller"
+	"github.com/hashicorp/consul/internal/mesh"
+	"github.com/hashicorp/consul/internal/resource"
+
+	"github.com/hashicorp/consul/agent/grpc-external/limiter"
+	"github.com/hashicorp/consul/agent/proxycfg"
+	pbmesh "github.com/hashicorp/consul/proto-public/pbmesh/v1alpha1"
+	"github.com/hashicorp/consul/proto-public/pbresource"
+)
+
+// Proxy implements the queue.ItemType interface so that it can be used in a controller.Event.
+// It is sent on the newProxyConnectionCh channel.
+// TODO(ProxyState): needs to support tenancy in the future.
+// Key() is current resourceID.Name.
+type ProxyConnection struct {
+	ProxyID *pbresource.ID
+}
+
+func (e *ProxyConnection) Key() string {
+	return e.ProxyID.GetName()
+}
+
+// proxyWatchData is a handle on all of the relevant bits that is created by calling Watch().
+// It is meant to be stored in the proxies cache by proxyID so that watches can be notified
+// when the ProxyState for that proxyID has changed.
+type proxyWatchData struct {
+	// notifyCh is the channel that the watcher receives updates from ProxyTracker.
+	notifyCh chan *pbmesh.ProxyState
+	// state is the current/last updated ProxyState for a given proxy.
+	state *pbmesh.ProxyState
+	// token is the ACL token provided by the watcher.
+	token string
+	// nodeName is the node where the given proxy resides.
+	nodeName string
+}
+
+type ProxyTrackerConfig struct {
+	// logger will be used to write log messages.
+	Logger Logger
+
+	// sessionLimiter is used to enforce xDS concurrency limits.
+	SessionLimiter SessionLimiter
+}
+
+// ProxyTracker implements the Watcher and Updater interfaces. The Watcher is used by the xds server to add a new proxy
+// to this server, and get back a channel for updates. The Updater is used by the ProxyState controller running on the
+// server to push ProxyState updates to the notify channel.
+type ProxyTracker struct {
+	config ProxyTrackerConfig
+	// proxies is a cache of the proxies connected to this server and configuration information for each one.
+	proxies map[resource.ReferenceKey]*proxyWatchData
+	// newProxyConnectionCh is the channel that the "updater" retains to receive messages from ProxyTracker that a new
+	// proxy has connected to ProxyTracker and a signal the "updater" should call PushChanges with a new state.
+	newProxyConnectionCh chan controller.Event
+	// shutdownCh is a channel that closes when ProxyTracker is shutdown. ShutdownChannel is never written to, only closed to
+	// indicate a shutdown has been initiated.
+	shutdownCh chan struct{}
+	// mu is a mutex that is used internally for locking when reading and modifying ProxyTracker state, namely the proxies map.
+	mu sync.Mutex
+}
+
+// NewProxyTracker returns a ProxyTracker instance given a configuration.
+func NewProxyTracker(cfg ProxyTrackerConfig) *ProxyTracker {
+	return &ProxyTracker{
+		config:  cfg,
+		proxies: make(map[resource.ReferenceKey]*proxyWatchData),
+		// buffering this channel since ProxyTracker will be registering watches for all proxies.
+		// using the buffer will limit errors related to controller and the proxy are both running
+		// but the controllers listening function is not blocking on the particular receive line.
+		// This channel is meant to error when the controller is "not ready" which means up and alive.
+		// This buffer will try to reduce false negatives and limit unnecessary erroring.
+		newProxyConnectionCh: make(chan controller.Event, 1000),
+		shutdownCh:           make(chan struct{}),
+	}
+}
+
+// Watch connects a proxy with ProxyTracker and returns the consumer a channel to receive updates,
+// a channel to notify of xDS terminated session, and a cancel function to cancel the watch.
+func (pt *ProxyTracker) Watch(proxyID *pbresource.ID,
+	nodeName string, token string) (<-chan *pbmesh.ProxyState,
+	limiter.SessionTerminatedChan, proxycfg.CancelFunc, error) {
+
+	if err := validateArgs(proxyID, nodeName, token); err != nil {
+		pt.config.Logger.Error("args failed validation", err)
+		return nil, nil, nil, err
+	}
+	// Begin a session with the xDS session concurrency limiter.
+	//
+	// See: https://github.com/hashicorp/consul/issues/15753
+	session, err := pt.config.SessionLimiter.BeginSession()
+	if err != nil {
+		pt.config.Logger.Error("failed to begin session with xDS session concurrency limiter", err)
+		return nil, nil, nil, err
+	}
+
+	// This buffering is crucial otherwise we'd block immediately trying to
+	// deliver the current snapshot below if we already have one.
+	proxyStateChan := make(chan *pbmesh.ProxyState, 1)
+	watchData := &proxyWatchData{
+		notifyCh: proxyStateChan,
+		state:    nil,
+		token:    token,
+		nodeName: nodeName,
+	}
+
+	proxyReferenceKey := resource.NewReferenceKey(proxyID)
+	cancel := func() {
+		pt.mu.Lock()
+		defer pt.mu.Unlock()
+		pt.cancelWatchLocked(proxyReferenceKey, proxyStateChan, session)
+	}
+
+	pt.mu.Lock()
+	defer pt.mu.Unlock()
+
+	pt.proxies[proxyReferenceKey] = watchData
+
+	//Send an event to the controller
+	err = pt.notifyNewProxyChannel(proxyID)
+	if err != nil {
+		pt.cancelWatchLocked(proxyReferenceKey, watchData.notifyCh, session)
+		return nil, nil, nil, err
+	}
+
+	return proxyStateChan, session.Terminated(), cancel, nil
+}
+
+// notifyNewProxyChannel attempts to send a message to newProxyConnectionCh and will return an error if there's no receiver.
+// This will handle conditions where a proxy is connected but there's no controller for some reason to receive the event.
+// This will error back to the proxy's Watch call and will cause the proxy call Watch again to retry connection until the controller
+// is available.
+func (pt *ProxyTracker) notifyNewProxyChannel(proxyID *pbresource.ID) error {
+	controllerEvent := controller.Event{
+		Obj: &ProxyConnection{
+			ProxyID: proxyID,
+		},
+	}
+	select {
+	case pt.newProxyConnectionCh <- controllerEvent:
+		return nil
+		// using default here to return errors is only safe when we have a large buffer.
+		// the receiver is on a loop to read from the channel.  If the sequence of
+		// sender blocks on the channel and then the receiver blocks on the channel is not
+		// aligned, then extraneous errors could be returned to the proxy that are just
+		// false negatives and the controller could be up and healthy.
+	default:
+		return fmt.Errorf("failed to notify the controller of the proxy connecting")
+	}
+}
+
+// cancelWatchLocked does the following:
+// - deletes the key from the proxies array.
+// - ends the session with xDS session limiter.
+// - closes the proxy state channel assigned to the proxy.
+// This function assumes the state lock is already held.
+func (pt *ProxyTracker) cancelWatchLocked(proxyReferenceKey resource.ReferenceKey, proxyStateChan chan *pbmesh.ProxyState, session limiter.Session) {
+	delete(pt.proxies, proxyReferenceKey)
+	session.End()
+	close(proxyStateChan)
+}
+
+func validateArgs(proxyID *pbresource.ID,
+	nodeName string, token string) error {
+	if proxyID == nil {
+		return errors.New("proxyID is required")
+	} else if proxyID.Type.Kind != mesh.ProxyStateTemplateConfigurationType.Kind {
+		return fmt.Errorf("proxyID must be a %s", mesh.ProxyStateTemplateConfigurationType.GetKind())
+	} else if nodeName == "" {
+		return errors.New("nodeName is required")
+	} else if token == "" {
+		return errors.New("token is required")
+	}
+
+	return nil
+}
+
+// PushChange allows pushing a computed ProxyState to xds for xds resource generation to send to a proxy.
+func (pt *ProxyTracker) PushChange(proxyID *pbresource.ID, proxyState *pbmesh.ProxyState) error {
+	proxyReferenceKey := resource.NewReferenceKey(proxyID)
+	pt.mu.Lock()
+	defer pt.mu.Unlock()
+	if data, ok := pt.proxies[proxyReferenceKey]; ok {
+		data.state = proxyState
+		pt.deliverLatest(proxyID, proxyState, data.notifyCh)
+	} else {
+		return errors.New("proxyState change could not be sent because proxy is not connected")
+	}
+
+	return nil
+}
+
+func (pt *ProxyTracker) deliverLatest(proxyID *pbresource.ID, proxyState *pbmesh.ProxyState, ch chan *pbmesh.ProxyState) {
+	// Send if chan is empty
+	select {
+	case ch <- proxyState:
+		return
+	default:
+	}
+
+	// Not empty, drain the chan of older snapshots and redeliver. For now we only
+	// use 1-buffered chans but this will still work if we change that later.
+OUTER:
+	for {
+		select {
+		case <-ch:
+			continue
+		default:
+			break OUTER
+		}
+	}
+
+	// Now send again
+	select {
+	case ch <- proxyState:
+		return
+	default:
+		// This should not be possible since we should be the only sender, enforced
+		// by m.mu but error and drop the update rather than panic.
+		pt.config.Logger.Error("failed to deliver proxyState to proxy",
+			"proxy", proxyID.String(),
+		)
+	}
+}
+
+// EventChannel returns an event channel that sends controller events when a proxy connects to a server.
+func (pt *ProxyTracker) EventChannel() chan controller.Event {
+	return pt.newProxyConnectionCh
+}
+
+// ShutdownChannel returns a channel that closes when ProxyTracker is shutdown. ShutdownChannel is never written to, only closed to
+// indicate a shutdown has been initiated.
+func (pt *ProxyTracker) ShutdownChannel() chan struct{} {
+	return pt.shutdownCh
+}
+
+// ProxyConnectedToServer returns whether this id is connected to this server.
+func (pt *ProxyTracker) ProxyConnectedToServer(proxyID *pbresource.ID) bool {
+	pt.mu.Lock()
+	defer pt.mu.Unlock()
+	proxyReferenceKey := resource.NewReferenceKey(proxyID)
+	_, ok := pt.proxies[proxyReferenceKey]
+	return ok
+}
+
+// Shutdown removes all state and close all channels.
+func (pt *ProxyTracker) Shutdown() {
+	pt.mu.Lock()
+	defer pt.mu.Unlock()
+
+	// Close all current watchers first
+	for proxyID, watchData := range pt.proxies {
+		close(watchData.notifyCh)
+		delete(pt.proxies, proxyID)
+	}
+
+	close(pt.newProxyConnectionCh)
+	close(pt.shutdownCh)
+}
+
+//go:generate mockery --name SessionLimiter --inpackage
+type SessionLimiter interface {
+	BeginSession() (limiter.Session, error)
+}
+
+//go:generate mockery --name Logger --inpackage
+type Logger interface {
+	Error(args ...any)
+}
diff --git a/agent/proxy-tracker/proxy_tracker_test.go b/agent/proxy-tracker/proxy_tracker_test.go
new file mode 100644
index 000000000000..3913f95b213f
--- /dev/null
+++ b/agent/proxy-tracker/proxy_tracker_test.go
@@ -0,0 +1,351 @@
+// Copyright (c) HashiCorp, Inc.
+// SPDX-License-Identifier: BUSL-1.1
+
+package proxytracker
+
+import (
+	"errors"
+	"fmt"
+	"github.com/hashicorp/consul/agent/grpc-external/limiter"
+	"github.com/hashicorp/consul/internal/controller"
+	"github.com/hashicorp/consul/internal/mesh"
+	"github.com/hashicorp/consul/internal/resource"
+	"github.com/hashicorp/consul/internal/resource/resourcetest"
+	pbmesh "github.com/hashicorp/consul/proto-public/pbmesh/v1alpha1"
+	"github.com/hashicorp/consul/proto-public/pbresource"
+	"github.com/stretchr/testify/mock"
+	"github.com/stretchr/testify/require"
+	"testing"
+)
+
+func TestProxyTracker_Watch(t *testing.T) {
+	resourceID := resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID()
+	proxyReferenceKey := resource.NewReferenceKey(resourceID)
+	lim := NewMockSessionLimiter(t)
+	session1 := newMockSession(t)
+	session1TermCh := make(limiter.SessionTerminatedChan)
+	session1.On("Terminated").Return(session1TermCh)
+	session1.On("End").Return()
+	lim.On("BeginSession").Return(session1, nil)
+	logger := NewMockLogger(t)
+
+	pt := NewProxyTracker(ProxyTrackerConfig{
+		Logger:         logger,
+		SessionLimiter: lim,
+	})
+
+	// Watch()
+	proxyStateChan, _, cancelFunc, err := pt.Watch(resourceID, "node 1", "token")
+	require.NoError(t, err)
+
+	// ensure New Proxy Connection message is sent
+	newProxyMsg := <-pt.EventChannel()
+	require.Equal(t, resourceID.Name, newProxyMsg.Obj.Key())
+
+	// watchData is stored in the proxies array with a nil state
+	watchData, ok := pt.proxies[proxyReferenceKey]
+	require.True(t, ok)
+	require.NotNil(t, watchData)
+	require.Nil(t, watchData.state)
+
+	// calling cancelFunc does the following:
+	// - closes the proxy state channel
+	// - and removes the map entry for the proxy
+	// - session is ended
+	cancelFunc()
+
+	// read channel to see if there is data and it is open.
+	receivedState, channelOpen := <-proxyStateChan
+	require.Nil(t, receivedState)
+	require.False(t, channelOpen)
+
+	// key is removed from proxies array
+	_, ok = pt.proxies[proxyReferenceKey]
+	require.False(t, ok)
+
+	// session ended
+	session1.AssertCalled(t, "Terminated")
+	session1.AssertCalled(t, "End")
+}
+
+func TestProxyTracker_Watch_ErrorConsumerNotReady(t *testing.T) {
+	resourceID := resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID()
+	proxyReferenceKey := resource.NewReferenceKey(resourceID)
+	lim := NewMockSessionLimiter(t)
+	session1 := newMockSession(t)
+	session1.On("End").Return()
+	lim.On("BeginSession").Return(session1, nil)
+	logger := NewMockLogger(t)
+
+	pt := NewProxyTracker(ProxyTrackerConfig{
+		Logger:         logger,
+		SessionLimiter: lim,
+	})
+
+	//fill up buffered channel while the consumer is not ready to simulate the error
+	for i := 0; i < 1000; i++ {
+		event := controller.Event{Obj: &ProxyConnection{ProxyID: resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, fmt.Sprintf("test%d", i)).ID()}}
+		pt.newProxyConnectionCh <- event
+	}
+
+	// Watch()
+	proxyStateChan, sessionTerminatedCh, cancelFunc, err := pt.Watch(resourceID, "node 1", "token")
+	require.Nil(t, cancelFunc)
+	require.Nil(t, proxyStateChan)
+	require.Nil(t, sessionTerminatedCh)
+	require.Error(t, err)
+	require.Equal(t, "failed to notify the controller of the proxy connecting", err.Error())
+
+	// it is not stored in the proxies array
+	watchData, ok := pt.proxies[proxyReferenceKey]
+	require.False(t, ok)
+	require.Nil(t, watchData)
+}
+
+func TestProxyTracker_Watch_ArgValidationErrors(t *testing.T) {
+	type testcase struct {
+		description   string
+		proxyID       *pbresource.ID
+		nodeName      string
+		token         string
+		expectedError error
+	}
+	testcases := []*testcase{
+		{
+			description:   "Empty proxyID",
+			proxyID:       nil,
+			nodeName:      "something",
+			token:         "something",
+			expectedError: errors.New("proxyID is required"),
+		},
+		{
+			description:   "Empty nodeName",
+			proxyID:       resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID(),
+			nodeName:      "",
+			token:         "something",
+			expectedError: errors.New("nodeName is required"),
+		},
+		{
+			description:   "Empty token",
+			proxyID:       resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID(),
+			nodeName:      "something",
+			token:         "",
+			expectedError: errors.New("token is required"),
+		},
+		{
+			description:   "resource is not ProxyStateTemplate",
+			proxyID:       resourcetest.Resource(mesh.ProxyConfigurationType, "test").ID(),
+			nodeName:      "something",
+			token:         "something else",
+			expectedError: errors.New("proxyID must be a ProxyStateTemplate"),
+		},
+	}
+	for _, tc := range testcases {
+		lim := NewMockSessionLimiter(t)
+		lim.On("BeginSession").Return(nil, nil).Maybe()
+		logger := NewMockLogger(t)
+		logger.On("Error", mock.Anything, mock.Anything).Return(nil)
+
+		pt := NewProxyTracker(ProxyTrackerConfig{
+			Logger:         logger,
+			SessionLimiter: lim,
+		})
+
+		// Watch()
+		proxyStateChan, sessionTerminateCh, cancelFunc, err := pt.Watch(tc.proxyID, tc.nodeName, tc.token)
+		require.Error(t, err)
+		require.Equal(t, tc.expectedError, err)
+		require.Nil(t, proxyStateChan)
+		require.Nil(t, sessionTerminateCh)
+		require.Nil(t, cancelFunc)
+	}
+}
+
+func TestProxyTracker_Watch_SessionLimiterError(t *testing.T) {
+	resourceID := resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID()
+	lim := NewMockSessionLimiter(t)
+	lim.On("BeginSession").Return(nil, errors.New("kaboom"))
+	logger := NewMockLogger(t)
+	logger.On("Error", mock.Anything, mock.Anything).Return(nil)
+
+	pt := NewProxyTracker(ProxyTrackerConfig{
+		Logger:         logger,
+		SessionLimiter: lim,
+	})
+
+	// Watch()
+	proxyStateChan, sessionTerminateCh, cancelFunc, err := pt.Watch(resourceID, "node 1", "token")
+	require.Error(t, err)
+	require.Equal(t, "kaboom", err.Error())
+	require.Nil(t, proxyStateChan)
+	require.Nil(t, sessionTerminateCh)
+	require.Nil(t, cancelFunc)
+}
+
+func TestProxyTracker_PushChange(t *testing.T) {
+	resourceID := resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID()
+	proxyReferenceKey := resource.NewReferenceKey(resourceID)
+	lim := NewMockSessionLimiter(t)
+	session1 := newMockSession(t)
+	session1TermCh := make(limiter.SessionTerminatedChan)
+	session1.On("Terminated").Return(session1TermCh)
+	lim.On("BeginSession").Return(session1, nil)
+	logger := NewMockLogger(t)
+
+	pt := NewProxyTracker(ProxyTrackerConfig{
+		Logger:         logger,
+		SessionLimiter: lim,
+	})
+
+	// Watch()
+	proxyStateChan, _, _, err := pt.Watch(resourceID, "node 1", "token")
+	require.NoError(t, err)
+
+	// PushChange
+	proxyState := &pbmesh.ProxyState{
+		IntentionDefaultAllow: true,
+	}
+
+	// using a goroutine so that the channel and main test thread do not cause
+	// blocking issues with each other
+	go func() {
+		err = pt.PushChange(resourceID, proxyState)
+		require.NoError(t, err)
+	}()
+
+	// channel receives a copy
+	receivedState, channelOpen := <-proxyStateChan
+	require.True(t, channelOpen)
+	require.Equal(t, proxyState, receivedState)
+
+	// it is stored in the proxies array
+	watchData, ok := pt.proxies[proxyReferenceKey]
+	require.True(t, ok)
+	require.Equal(t, proxyState, watchData.state)
+}
+
+func TestProxyTracker_PushChanges_ErrorProxyNotConnected(t *testing.T) {
+	resourceID := resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID()
+	lim := NewMockSessionLimiter(t)
+	logger := NewMockLogger(t)
+
+	pt := NewProxyTracker(ProxyTrackerConfig{
+		Logger:         logger,
+		SessionLimiter: lim,
+	})
+
+	// PushChange
+	proxyState := &pbmesh.ProxyState{
+		IntentionDefaultAllow: true,
+	}
+
+	err := pt.PushChange(resourceID, proxyState)
+	require.Error(t, err)
+	require.Equal(t, "proxyState change could not be sent because proxy is not connected", err.Error())
+}
+
+func TestProxyTracker_ProxyConnectedToServer(t *testing.T) {
+	type testcase struct {
+		name              string
+		shouldExist       bool
+		preProcessingFunc func(pt *ProxyTracker, resourceID *pbresource.ID, limiter *MockSessionLimiter, session *mockSession, channel limiter.SessionTerminatedChan)
+	}
+	testsCases := []*testcase{
+		{
+			name:        "Resource that has not been sent through Watch() should return false",
+			shouldExist: false,
+			preProcessingFunc: func(pt *ProxyTracker, resourceID *pbresource.ID, limiter *MockSessionLimiter, session *mockSession, channel limiter.SessionTerminatedChan) {
+				session.On("Terminated").Return(channel).Maybe()
+				session.On("End").Return().Maybe()
+				limiter.On("BeginSession").Return(session, nil).Maybe()
+			},
+		},
+		{
+			name:        "Resource used that is already passed in through Watch() should return true",
+			shouldExist: true,
+			preProcessingFunc: func(pt *ProxyTracker, resourceID *pbresource.ID, limiter *MockSessionLimiter, session *mockSession, channel limiter.SessionTerminatedChan) {
+				session.On("Terminated").Return(channel).Maybe()
+				session.On("End").Return().Maybe()
+				limiter.On("BeginSession").Return(session, nil)
+				_, _, _, _ = pt.Watch(resourceID, "node 1", "token")
+			},
+		},
+	}
+
+	for _, tc := range testsCases {
+		lim := NewMockSessionLimiter(t)
+		session1 := newMockSession(t)
+		session1TermCh := make(limiter.SessionTerminatedChan)
+		logger := NewMockLogger(t)
+
+		pt := NewProxyTracker(ProxyTrackerConfig{
+			Logger:         logger,
+			SessionLimiter: lim,
+		})
+		resourceID := resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID()
+		tc.preProcessingFunc(pt, resourceID, lim, session1, session1TermCh)
+		require.Equal(t, tc.shouldExist, pt.ProxyConnectedToServer(resourceID))
+	}
+}
+
+func TestProxyTracker_Shutdown(t *testing.T) {
+	resourceID := resourcetest.Resource(mesh.ProxyStateTemplateConfigurationType, "test").ID()
+	proxyReferenceKey := resource.NewReferenceKey(resourceID)
+	lim := NewMockSessionLimiter(t)
+	session1 := newMockSession(t)
+	session1TermCh := make(limiter.SessionTerminatedChan)
+	session1.On("Terminated").Return(session1TermCh)
+	session1.On("End").Return().Maybe()
+	lim.On("BeginSession").Return(session1, nil)
+	logger := NewMockLogger(t)
+
+	pt := NewProxyTracker(ProxyTrackerConfig{
+		Logger:         logger,
+		SessionLimiter: lim,
+	})
+
+	// Watch()
+	proxyStateChan, _, _, err := pt.Watch(resourceID, "node 1", "token")
+	require.NoError(t, err)
+
+	pt.Shutdown()
+
+	// proxy channels are all disconnected and proxy is removed from proxies map
+	receivedState, channelOpen := <-proxyStateChan
+	require.Nil(t, receivedState)
+	require.False(t, channelOpen)
+	_, ok := pt.proxies[proxyReferenceKey]
+	require.False(t, ok)
+
+	// shutdownCh is closed
+	select {
+	case <-pt.ShutdownChannel():
+	default:
+		t.Fatalf("shutdown channel should be closed")
+	}
+	// newProxyConnectionCh is closed
+	select {
+	case <-pt.EventChannel():
+	default:
+		t.Fatalf("shutdown channel should be closed")
+	}
+}
+
+type mockSession struct {
+	mock.Mock
+}
+
+func newMockSession(t *testing.T) *mockSession {
+	m := &mockSession{}
+	m.Mock.Test(t)
+
+	t.Cleanup(func() { m.AssertExpectations(t) })
+
+	return m
+}
+
+func (m *mockSession) End() { m.Called() }
+
+func (m *mockSession) Terminated() limiter.SessionTerminatedChan {
+	return m.Called().Get(0).(limiter.SessionTerminatedChan)
+}