@@ -58,6 +58,7 @@ public sealed partial class CopilotClient : IDisposable, IAsyncDisposable
     /// </summary>
     private const int MinProtocolVersion = 3;
     private static readonly TimeSpan s_stderrPumpShutdownTimeout = TimeSpan.FromSeconds(5);
+    private static readonly TimeSpan s_runtimeShutdownTimeout = TimeSpan.FromSeconds(10);
 
     /// <summary>
     /// Provides a thread-safe collection of active Copilot sessions, indexed by session identifier.
@@ -291,7 +292,7 @@ async Task<Connection> StartCoreAsync(CancellationToken ct)
 
                 if (connection is not null)
                 {
-                    await CleanupConnectionAsync(connection, errors: null);
+                    await CleanupConnectionAsync(connection, errors: null, gracefulRuntimeShutdown: false);
                 }
                 else if (cliProcess is not null)
                 {
@@ -312,6 +313,7 @@ async Task<Connection> StartCoreAsync(CancellationToken ct)
     /// This method performs graceful cleanup:
     /// <list type="number">
     ///     <item>Closes all active sessions (releases in-memory resources)</item>
+    ///     <item>Requests runtime shutdown for SDK-owned CLI processes</item>
     ///     <item>Closes the JSON-RPC connection</item>
     ///     <item>Terminates the CLI server process (if spawned by this client)</item>
     /// </list>
@@ -346,7 +348,7 @@ public async Task StopAsync()
 
         _sessions.Clear();
 
-        await CleanupConnectionAsync(errors);
+        await CleanupConnectionAsync(errors, gracefulRuntimeShutdown: true);
 
         ThrowErrors(errors);
     }
@@ -378,7 +380,7 @@ public async Task ForceStopAsync()
         _sessions.Clear();
 
         var errors = new List<Exception>();
-        await CleanupConnectionAsync(errors);
+        await CleanupConnectionAsync(errors, gracefulRuntimeShutdown: false);
         ThrowErrors(errors);
     }
 
@@ -398,7 +400,7 @@ private static void ThrowErrors(List<Exception>? errors)
         }
     }
 
-    private async Task CleanupConnectionAsync(List<Exception>? errors)
+    private async Task CleanupConnectionAsync(List<Exception>? errors, bool gracefulRuntimeShutdown)
     {
         var connectionTask = _connectionTask;
         if (connectionTask is null)
@@ -419,11 +421,36 @@ private async Task CleanupConnectionAsync(List<Exception>? errors)
             return;
         }
 
-        await CleanupConnectionAsync(ctx, errors);
+        await CleanupConnectionAsync(ctx, errors, gracefulRuntimeShutdown);
     }
 
-    private async Task CleanupConnectionAsync(Connection ctx, List<Exception>? errors)
+    private async Task CleanupConnectionAsync(Connection ctx, List<Exception>? errors, bool gracefulRuntimeShutdown)
     {
+        var runtimeShutdownCompleted = false;
+        if (gracefulRuntimeShutdown && ctx.CliProcess is not null)
+        {
+            var runtimeShutdownTimestamp = Stopwatch.GetTimestamp();
+            try
+            {
+                using var cancellation = new CancellationTokenSource(s_runtimeShutdownTimeout);
+                await ctx.Server.Runtime.ShutdownAsync(cancellation.Token);
+                runtimeShutdownCompleted = true;
+                LoggingHelpers.LogTiming(_logger, LogLevel.Debug, null,
+                    "CopilotClient.StopAsync runtime shutdown complete. Elapsed={Elapsed}",
+                    runtimeShutdownTimestamp);
+            }
+            catch (Exception ex) when (ex is OperationCanceledException
+                or InvalidOperationException
+                or ObjectDisposedException
+                or IOException
+                or SocketException)
+            {
+                LoggingHelpers.LogTiming(_logger, LogLevel.Debug, ex,
+                    "CopilotClient.StopAsync runtime shutdown failed. Elapsed={Elapsed}",
+                    runtimeShutdownTimestamp);
+            }
+        }
+
         try { ctx.Rpc.Dispose(); }
         catch (Exception ex) { AddCleanupError(errors, ex, _logger); }
 
@@ -439,22 +466,62 @@ private async Task CleanupConnectionAsync(Connection ctx, List<Exception>? error
 
         if (ctx.CliProcess is { } childProcess)
         {
-            await CleanupCliProcessAsync(childProcess, ctx.StderrPump, errors, _logger);
+            await CleanupCliProcessAsync(childProcess, ctx.StderrPump, errors, _logger, runtimeShutdownCompleted);
         }
     }
 
-    private static async Task CleanupCliProcessAsync(Process childProcess, ProcessStderrPump? stderrPump, List<Exception>? errors, ILogger? logger)
+    private static async Task CleanupCliProcessAsync(Process childProcess, ProcessStderrPump? stderrPump, List<Exception>? errors, ILogger? logger, bool waitForGracefulExit = false)
     {
         stderrPump?.Cancel();
 
         try
         {
             if (!childProcess.HasExited)
             {
+                if (waitForGracefulExit)
+                {
+                    var shutdownWaitTimestamp = Stopwatch.GetTimestamp();
+                    try
+                    {
+                        await childProcess.WaitForExitAsync().WaitAsync(s_runtimeShutdownTimeout);
+                    }
+                    catch (TimeoutException ex)
+                    {
+                        if (logger is not null)
+                        {
+                            LoggingHelpers.LogTiming(logger, LogLevel.Debug, ex,
+                                "Timed out waiting for runtime process to exit after graceful shutdown. Elapsed={Elapsed}, Timeout={Timeout}",
+                                shutdownWaitTimestamp,
+                                s_runtimeShutdownTimeout);
+                        }
+                    }
+                }
+
+                if (childProcess.HasExited)
+                {
+                    return;
+                }
+
                 childProcess.Kill(entireProcessTree: true);
                 // Kill is asynchronous; wait for the root CLI process to exit so cleanup callers
                 // do not observe StopAsync/DisposeAsync completion while it is still tearing down.
-                await childProcess.WaitForExitAsync();
+                var killWaitTimestamp = Stopwatch.GetTimestamp();
+                try
+                {
+                    await childProcess.WaitForExitAsync().WaitAsync(s_runtimeShutdownTimeout);
+                }
+                catch (TimeoutException ex)
+                {
+                    if (logger is not null)
+                    {
+                        LoggingHelpers.LogTiming(logger, LogLevel.Debug, ex,
+                            "Timed out waiting for runtime process to exit after kill. Elapsed={Elapsed}, Timeout={Timeout}",
+                            killWaitTimestamp,
+                            s_runtimeShutdownTimeout);
+                    }
+
+                    AddCleanupError(errors, ex, logger);
+                }
             }
         }
         catch (Exception ex)
@@ -2005,9 +2072,10 @@ private async Task<Connection> ConnectToServerAsync(Process? cliProcess, string?
                 "CopilotClient.ConnectToServerAsync transport setup complete. Elapsed={Elapsed}",
                 setupTimestamp);
 
-            _serverRpc = new ServerRpc(rpc);
+            var connection = new Connection(rpc, cliProcess, networkStream, stderrPump);
+            _serverRpc = connection.Server;
 
-            return new Connection(rpc, cliProcess, networkStream, stderrPump);
+            return connection;
         }
         catch
         {
@@ -2211,6 +2279,7 @@ private class Connection(
     {
         public Process? CliProcess => cliProcess;
         public JsonRpc Rpc => rpc;
+        public ServerRpc Server => field ?? Interlocked.CompareExchange(ref field, new(rpc), null) ?? field;
         public NetworkStream? NetworkStream => networkStream;
         public ProcessStderrPump? StderrPump => stderrPump;
         public StringBuilder? StderrBuffer => stderrPump?.Buffer;
 
@@ -47,10 +47,7 @@ public async Task Should_Export_File_Telemetry_For_Sdk_Interactions()
         await session.DisposeAsync();
         await client.StopAsync();
 
-        var entries = await ReadTelemetryEntriesAsync(
-            telemetryPath,
-            entries => entries.Any(entry => GetTypeName(entry) == "span" &&
-                GetStringAttribute(entry, "gen_ai.operation.name") == "invoke_agent"));
+        var entries = await ReadTelemetryEntriesAsync(telemetryPath);
         var spans = entries.Where(entry => GetTypeName(entry) == "span").ToList();
 
         Assert.NotEmpty(spans);
@@ -89,46 +86,23 @@ public async Task Should_Export_File_Telemetry_For_Sdk_Interactions()
         static string EchoTelemetryMarker(string value) => value;
     }
 
-    private static async Task<IReadOnlyList<JsonElement>> ReadTelemetryEntriesAsync(
-        string path,
-        Func<IReadOnlyList<JsonElement>, bool> isComplete)
+    private static async Task<IReadOnlyList<JsonElement>> ReadTelemetryEntriesAsync(string path)
     {
-        IReadOnlyList<JsonElement> entries = [];
-        await TestHelper.WaitForConditionAsync(
-            async () =>
-            {
-                entries = await ReadTelemetryEntriesOnceAsync(path);
-                return entries.Count > 0 && isComplete(entries);
-            },
-            timeout: TimeSpan.FromSeconds(30),
-            timeoutMessage: $"Timed out waiting for telemetry records in '{path}'.",
-            transientExceptionFilter: exception => TestHelper.IsTransientFileSystemException(exception) || exception is JsonException);
-
-        return entries;
-
-        static async Task<IReadOnlyList<JsonElement>> ReadTelemetryEntriesOnceAsync(string path)
+        var entries = new List<JsonElement>();
+        using var stream = new FileStream(path, FileMode.Open, FileAccess.Read, FileShare.Read);
+        using var reader = new StreamReader(stream);
+        while (await reader.ReadLineAsync() is { } line)
         {
-            if (!File.Exists(path) || new FileInfo(path).Length == 0)
+            if (string.IsNullOrWhiteSpace(line))
             {
-                return [];
+                continue;
             }
 
-            var entries = new List<JsonElement>();
-            using var stream = new FileStream(path, FileMode.Open, FileAccess.Read, FileShare.ReadWrite | FileShare.Delete);
-            using var reader = new StreamReader(stream);
-            while (await reader.ReadLineAsync() is { } line)
-            {
-                if (string.IsNullOrWhiteSpace(line))
-                {
-                    continue;
-                }
-
-                using var document = JsonDocument.Parse(line);
-                entries.Add(document.RootElement.Clone());
-            }
-
-            return entries;
+            using var document = JsonDocument.Parse(line);
+            entries.Add(document.RootElement.Clone());
         }
+
+        return entries;
     }
 
     private static string? GetTraceId(JsonElement entry) => GetStringProperty(entry, "traceId");