diff --git a/base_layer/p2p/src/proto/message_type.proto b/base_layer/p2p/src/proto/message_type.proto
index 91f66cfd3b..7363b2e23d 100644
--- a/base_layer/p2p/src/proto/message_type.proto
+++ b/base_layer/p2p/src/proto/message_type.proto
@@ -26,6 +26,7 @@ enum TariMessageType {
     TariMessageTypeMempoolResponse = 72;
     TariMessageTypeTransactionFinalized = 73;
     TariMessageTypeTransactionCancelled = 74;
+
     // -- DAN Messages --
     TariMessageTypeDanConsensusMessage = 101;
     // -- Extended --
diff --git a/base_layer/wallet/src/transaction_service/service.rs b/base_layer/wallet/src/transaction_service/service.rs
index 5202220dbc..4bac4520dd 100644
--- a/base_layer/wallet/src/transaction_service/service.rs
+++ b/base_layer/wallet/src/transaction_service/service.rs
@@ -884,7 +884,6 @@ where
             self.last_seen_tip_height,
             None,
         );
-
         let join_handle = tokio::spawn(protocol.execute());
         join_handles.push(join_handle);
 
@@ -1574,6 +1573,12 @@ where
                     "A repeated Transaction (TxId: {}) has been received but has been previously cancelled or rejected",
                     tx.tx_id
                 );
+                tokio::spawn(send_transaction_cancelled_message(
+                    tx.tx_id,
+                    source_pubkey,
+                    self.resources.outbound_message_service.clone(),
+                ));
+
                 return Ok(());
             }
 
diff --git a/integration_tests/features/WalletTransactions.feature b/integration_tests/features/WalletTransactions.feature
index 59b6f81fa9..a74efade21 100644
--- a/integration_tests/features/WalletTransactions.feature
+++ b/integration_tests/features/WalletTransactions.feature
@@ -338,3 +338,21 @@ Feature: Wallet Transactions
     And I wait 5 seconds
     Then I restart wallet WALLET_RECV
     Then I wait for wallet WALLET_RECV to have at least 1000000 uT
+
+@critical
+  Scenario: Wallet should cancel stale transactions
+    Given I have a seed node NODE
+    And I have 1 base nodes connected to all seed nodes
+    And I have non-default wallet WALLET_SENDER connected to all seed nodes using StoreAndForwardOnly
+    And I have wallet WALLET_RECV connected to all seed nodes
+    And I have mining node MINER connected to base node NODE and wallet WALLET_SENDER
+    And mining node MINER mines 5 blocks
+    Then all nodes are at height 5
+    Then I wait for wallet WALLET_SENDER to have at least 10000000000 uT
+    And I stop wallet WALLET_RECV
+    When I wait 15 seconds
+    And I send 1000000 uT without waiting for broadcast from wallet WALLET_SENDER to wallet WALLET_RECV at fee 100
+    Then I cancel last transaction in wallet WALLET_SENDER
+    Then I restart wallet WALLET_RECV
+    When I wait 15 seconds
+    When wallet WALLET_RECV detects last transaction is Cancelled
diff --git a/integration_tests/features/support/wallet_steps.js b/integration_tests/features/support/wallet_steps.js
index 5dd9f68a6e..abf2008858 100644
--- a/integration_tests/features/support/wallet_steps.js
+++ b/integration_tests/features/support/wallet_steps.js
@@ -1310,6 +1310,36 @@ Then(
   }
 );
 
+Then(
+  /wallet (.*) detects last transaction is Cancelled/,
+  { timeout: 120 * 1000 },
+  async function (walletName) {
+    const wallet = this.getWallet(walletName);
+    const walletClient = await wallet.connectClient();
+
+    let lastTxId = this.lastResult.results[0].transaction_id;
+    console.log(
+      "Waiting for Transaction ",
+      lastTxId,
+      "to be cancelled in wallet",
+      walletName
+    );
+
+    await waitFor(
+      async () => walletClient.isTransactionCancelled(lastTxId),
+      true,
+      115 * 1000,
+      5 * 1000,
+      5
+    );
+    const transactionPending = await walletClient.isTransactionPending(
+      lastTxId
+    );
+
+    expect(transactionPending).to.equal(true);
+  }
+);
+
 Then(
   /wallet (.*) detects all transactions are at least Completed/,
   { timeout: 1200 * 1000 }, // Must allow for many transactions; dynamic time out used below
diff --git a/integration_tests/helpers/walletClient.js b/integration_tests/helpers/walletClient.js
index b852ab4931..dd6317d5ce 100644
--- a/integration_tests/helpers/walletClient.js
+++ b/integration_tests/helpers/walletClient.js
@@ -252,6 +252,22 @@ class WalletClient {
     }
   }
 
+  async isTransactionCancelled(tx_id) {
+    try {
+      const txnDetails = await this.getTransactionInfo({
+        transaction_ids: [tx_id.toString()],
+      });
+      if (transactionStatus().indexOf(txnDetails.transactions[0].status) == 7) {
+        return true;
+      } else {
+        return false;
+      }
+    } catch (err) {
+      // Any error here must be treated as if the required status was not achieved
+      return false;
+    }
+  }
+
   async isTransactionAtLeastCompleted(tx_id) {
     try {
       const txnDetails = await this.getTransactionInfo({