diff --git a/modules/web/src/app/cluster/details/cluster/edit-cluster/component.spec.ts b/modules/web/src/app/cluster/details/cluster/edit-cluster/component.spec.ts
index 8551af3f1e..9fd514c511 100644
--- a/modules/web/src/app/cluster/details/cluster/edit-cluster/component.spec.ts
+++ b/modules/web/src/app/cluster/details/cluster/edit-cluster/component.spec.ts
@@ -14,7 +14,7 @@
 
 import {EventEmitter} from '@angular/core';
 import {ComponentFixture, fakeAsync, flush, TestBed, tick, waitForAsync} from '@angular/core/testing';
-import {MatDialogRef} from '@angular/material/dialog';
+import {MatDialog, MatDialogRef} from '@angular/material/dialog';
 import {BrowserModule} from '@angular/platform-browser';
 import {NoopAnimationsModule} from '@angular/platform-browser/animations';
 import {Router} from '@angular/router';
@@ -42,7 +42,7 @@ import {ProjectMockService} from '@test/services/project-mock';
 import {RouterStub} from '@test/services/router-stubs';
 import {SettingsMockService} from '@test/services/settings-mock';
 import {UserMockService} from '@test/services/user-mock';
-import {Subject} from 'rxjs';
+import {of, Subject} from 'rxjs';
 import {AlibabaProviderSettingsComponent} from '../edit-provider-settings/alibaba-provider-settings/component';
 import {AWSProviderSettingsComponent} from '../edit-provider-settings/aws-provider-settings/component';
 import {AzureProviderSettingsComponent} from '../edit-provider-settings/azure-provider-settings/component';
@@ -89,6 +89,7 @@ describe('EditClusterComponent', () => {
       ],
       providers: [
         {provide: DatacenterService, useClass: DatacenterMockService},
+        {provide: MatDialog, useValue: {open: jest.fn().mockReturnValue({afterClosed: () => of(undefined)})}},
         {provide: MatDialogRef, useClass: MatDialogRefMock},
         {provide: ClusterService, useValue: clusterServiceMock},
         {provide: AppConfigService, useClass: AppConfigMockService},
diff --git a/modules/web/src/app/cluster/details/cluster/edit-cluster/component.ts b/modules/web/src/app/cluster/details/cluster/edit-cluster/component.ts
index a07083626e..a11b3433f7 100644
--- a/modules/web/src/app/cluster/details/cluster/edit-cluster/component.ts
+++ b/modules/web/src/app/cluster/details/cluster/edit-cluster/component.ts
@@ -14,7 +14,8 @@
 
 import {ChangeDetectorRef, Component, Input, OnDestroy, OnInit} from '@angular/core';
 import {FormBuilder, FormControl, FormGroup, Validators} from '@angular/forms';
-import {MatDialogRef} from '@angular/material/dialog';
+import {MatDialog, MatDialogRef} from '@angular/material/dialog';
+import {MatSelectChange} from '@angular/material/select';
 import {ClusterBackupService} from '@app/core/services/cluster-backup';
 import {UserClusterConfigService} from '@app/core/services/user-cluster-config';
 import {DynamicModule} from '@app/dynamic/module-registry';
@@ -58,7 +59,7 @@ import {IPV4_IPV6_CIDR_PATTERN} from '@shared/validators/others';
 import {KmValidators} from '@shared/validators/validators';
 import _ from 'lodash';
 import {Observable, Subject} from 'rxjs';
-import {map, switchMap, take, takeUntil, tap} from 'rxjs/operators';
+import {filter, map, switchMap, take, takeUntil, tap} from 'rxjs/operators';
 
 enum Controls {
   Name = 'name',
@@ -127,6 +128,7 @@ export class EditClusterComponent implements OnInit, OnDestroy {
   enforcedAuditWebhookSettings: AuditLoggingWebhookBackend;
   backupStorageLocationsList: BackupStorageLocation[];
   backupStorageLocationLabel: BSLListState = BSLListState.Ready;
+  readonly createBackupStorageLocationOptionValue = '__create_backup_storage_location__';
   isAllowedIPRangeSupported: boolean;
   readonly isEnterpriseEdition = DynamicModule.isEnterpriseEdition;
   readonly CLUSTER_DEFAULT_NODE_SELECTOR_NAMESPACE = CLUSTER_DEFAULT_NODE_SELECTOR_NAMESPACE;
@@ -157,6 +159,7 @@ export class EditClusterComponent implements OnInit, OnDestroy {
     private readonly _builder: FormBuilder,
     private readonly _clusterService: ClusterService,
     private readonly _datacenterService: DatacenterService,
+    private readonly _matDialog: MatDialog,
     private readonly _matDialogRef: MatDialogRef<EditClusterComponent>,
     private readonly _notificationService: NotificationService,
     private readonly _settingsService: SettingsService,
@@ -529,11 +532,48 @@ export class EditClusterComponent implements OnInit, OnDestroy {
       .listBackupStorageLocation(projectID)
       .pipe(takeUntil(this._unsubscribe))
       .subscribe(cbslList => {
-        this.backupStorageLocationsList = cbslList;
-        this.backupStorageLocationLabel = cbslList.length ? BSLListState.Ready : BSLListState.Empty;
+        this.backupStorageLocationsList = cbslList.filter(bsl => this._isBackupStorageLocationAvailable(bsl));
+        this.backupStorageLocationLabel = this.backupStorageLocationsList.length
+          ? BSLListState.Ready
+          : BSLListState.Empty;
+
+        const backupStorageLocationControl = this.form.get(Controls.BackupStorageLocation);
+        if (
+          backupStorageLocationControl &&
+          !this.backupStorageLocationsList.some(bsl => bsl.name === backupStorageLocationControl.value)
+        ) {
+          backupStorageLocationControl.reset();
+        }
       });
   }
 
+  async onBackupStorageLocationSelectionChange(event: MatSelectChange<string>): Promise<void> {
+    if (event.value !== this.createBackupStorageLocationOptionValue) {
+      return;
+    }
+
+    const backupStorageLocationControl = this.form.get(Controls.BackupStorageLocation);
+    const previousValue = this.cluster.spec?.backupConfig?.backupStorageLocation?.name ?? '';
+    backupStorageLocationControl.setValue(previousValue, {emitEvent: false});
+
+    const AddBackupStorageLocationDialogComponent = await DynamicModule.AddBackupStorageLocationDialogComponent;
+    if (!AddBackupStorageLocationDialogComponent) {
+      return;
+    }
+    this._matDialog
+      .open(AddBackupStorageLocationDialogComponent, {
+        data: {projectID: this.projectID},
+      })
+      .afterClosed()
+      .pipe(take(1), filter(Boolean))
+      .subscribe(() => this._getCBSL(this.projectID));
+  }
+
+  private _isBackupStorageLocationAvailable(bsl: BackupStorageLocation): boolean {
+    const status = bsl.status?.phase || bsl.spec?.status || '';
+    return status.toLowerCase() === 'available';
+  }
+
   getObservable(): Observable<Cluster> {
     const patch: ClusterPatch = {
       name: this.form.get(Controls.Name).value,
diff --git a/modules/web/src/app/cluster/details/cluster/edit-cluster/template.html b/modules/web/src/app/cluster/details/cluster/edit-cluster/template.html
index 0d2b34f7a5..2823f8d58c 100644
--- a/modules/web/src/app/cluster/details/cluster/edit-cluster/template.html
+++ b/modules/web/src/app/cluster/details/cluster/edit-cluster/template.html
@@ -391,22 +391,18 @@
       </mat-checkbox>
       }
 
-      @if (datacenter?.spec?.provider === NodeProvider.OPENSTACK) {
-      <mat-checkbox [formControlName]="Controls.RouterReconciliation">
-        Skip Router Reconciliation
-      </mat-checkbox>
-      }
-
       @if (!!form.get(Controls.ClusterBackup).value && isclusterBackupEnabled) {
       <mat-form-field class="bsl-field">
         <mat-label>{{backupStorageLocationLabel}}</mat-label>
         <mat-select [formControlName]="Controls.BackupStorageLocation"
+                    (selectionChange)="onBackupStorageLocationSelectionChange($event)"
                     disableOptionCentering
                     kmValueChangedIndicator>
           @for (bsl of backupStorageLocationsList; track bsl) {
           <mat-option [value]="bsl.name">{{bsl.displayName}}
           </mat-option>
           }
+          <mat-option [value]="createBackupStorageLocationOptionValue">+ Create Backup Storage Location</mat-option>
         </mat-select>
         @if (form.get(Controls.BackupStorageLocation).hasError('required')) {
         <mat-error>
@@ -416,6 +412,12 @@
       </mat-form-field>
       }
 
+      @if (datacenter?.spec?.provider === NodeProvider.OPENSTACK) {
+      <mat-checkbox [formControlName]="Controls.RouterReconciliation">
+        Skip Router Reconciliation
+      </mat-checkbox>
+      }
+
       <km-label-form title="Labels"
                      (labelsChange)="onLabelsChange($event)"
                      [labels]="labels"
diff --git a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/component.ts b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/component.ts
index 0b82a7c40c..ab56105fbc 100644
--- a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/component.ts
+++ b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/component.ts
@@ -19,7 +19,7 @@
 // END OF TERMS AND CONDITIONS
 
 import {Component, Inject, OnDestroy, OnInit} from '@angular/core';
-import {FormBuilder, FormGroup, Validators} from '@angular/forms';
+import {AbstractControl, FormBuilder, FormGroup, ValidationErrors, ValidatorFn, Validators} from '@angular/forms';
 import {MAT_DIALOG_DATA, MatDialogRef} from '@angular/material/dialog';
 import {ClusterBackupService} from '@app/core/services/cluster-backup';
 import {NotificationService} from '@app/core/services/notification';
@@ -64,6 +64,7 @@ enum Controls {
 })
 export class AddBackupStorageLocationDialogComponent implements OnInit, OnDestroy {
   private readonly _unsubscribe = new Subject<void>();
+  private readonly _dnsLabelRegex = /^[a-z0-9](?:[a-z0-9-]{0,61}[a-z0-9])?$/i;
   readonly Controls = Controls;
   readonly veleroChecksumAlgorithms = Object.values(VeleroChecksumAlgorithm);
   form: FormGroup;
@@ -108,12 +109,18 @@ export class AddBackupStorageLocationDialogComponent implements OnInit, OnDestro
         this._config.bslObject?.spec.backupSyncPeriod ?? '0',
         CBSL_SYNC_PERIOD
       ),
-      [Controls.Region]: this._builder.control(this._config.bslObject?.spec.config?.region ?? ''),
-      [Controls.Endpoints]: this._builder.control(this._config.bslObject?.spec.config?.s3Url ?? ''),
+      [Controls.Region]: this._builder.control(this._config.bslObject?.spec.config?.region ?? '', [
+        this._dnsNameValidator(),
+      ]),
+      [Controls.Endpoints]: this._builder.control(this._config.bslObject?.spec.config?.s3Url ?? '', [
+        this._endpointURLValidator(),
+      ]),
       [Controls.ChecksumAlgorithm]: this._builder.control(this._config.bslObject?.spec.config?.checksumAlgorithm ?? ''),
       [Controls.AddCustomConfig]: this._builder.control(false),
     });
 
+    this._updateRegionAndEndpointValidators(this.form.get(Controls.AddCustomConfig).value);
+
     if (this._config.bslObject) {
       this.form.get(Controls.Name).disable();
     } else {
@@ -132,6 +139,7 @@ export class AddBackupStorageLocationDialogComponent implements OnInit, OnDestro
       .get(Controls.AddCustomConfig)
       .valueChanges.pipe(takeUntil(this._unsubscribe))
       .subscribe((value: boolean) => {
+        this._updateRegionAndEndpointValidators(value);
         let config: BackupStorageLocationConfig;
         if (this._config.bslObject?.name) {
           config = this._config.bslObject.spec.config;
@@ -196,7 +204,7 @@ export class AddBackupStorageLocationDialogComponent implements OnInit, OnDestro
           this.form.get(Controls.BackupSyncPeriod).value === '' ? null : this.form.get(Controls.BackupSyncPeriod).value,
         config: {
           region: this.form.get(Controls.Region).value,
-          s3Url: this.form.get(Controls.Endpoints).value,
+          s3Url: this.form.get(Controls.Endpoints).value?.trim(),
           checksumAlgorithm: this.form.get(Controls.ChecksumAlgorithm).value || '',
         },
         provider: SupportedBSLProviders.AWS,
@@ -217,4 +225,64 @@ export class AddBackupStorageLocationDialogComponent implements OnInit, OnDestro
     }
     return bsl;
   }
+
+  private _dnsNameValidator(): ValidatorFn {
+    return (control: AbstractControl): ValidationErrors | null => {
+      const value = control.value?.trim();
+      if (!value) {
+        return null;
+      }
+
+      const labels = value.split('.');
+      return labels.every(label => this._dnsLabelRegex.test(label)) ? null : {invalidDnsName: true};
+    };
+  }
+
+  private _endpointURLValidator(): ValidatorFn {
+    return (control: AbstractControl): ValidationErrors | null => {
+      const value = control.value?.trim();
+      if (!value) {
+        return null;
+      }
+
+      if (!/^https?:\/\//i.test(value)) {
+        return {invalidEndpointUrl: true};
+      }
+
+      try {
+        const url = new URL(value);
+        if (!['http:', 'https:'].includes(url.protocol)) {
+          return {invalidEndpointUrl: true};
+        }
+
+        if (!url.hostname) {
+          return {invalidEndpointUrl: true};
+        }
+
+        const labels = url.hostname.split('.');
+        return labels.every(label => this._dnsLabelRegex.test(label)) ? null : {invalidEndpointUrl: true};
+      } catch {
+        return {invalidEndpointUrl: true};
+      }
+    };
+  }
+
+  private _updateRegionAndEndpointValidators(addCustomConfig: boolean): void {
+    const regionControl = this.form.get(Controls.Region);
+    const endpointControl = this.form.get(Controls.Endpoints);
+
+    const regionValidators = [this._dnsNameValidator()];
+    const endpointValidators = [this._endpointURLValidator()];
+
+    if (!addCustomConfig) {
+      regionValidators.unshift(Validators.required);
+      endpointValidators.unshift(Validators.required);
+    }
+
+    regionControl.setValidators(regionValidators);
+    endpointControl.setValidators(endpointValidators);
+
+    regionControl.updateValueAndValidity({emitEvent: false});
+    endpointControl.updateValueAndValidity({emitEvent: false});
+  }
 }
diff --git a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/template.html b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/template.html
index d167863b69..a0e7979faf 100644
--- a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/template.html
+++ b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/add-dialog/template.html
@@ -46,7 +46,7 @@
              matInput
              required>
       <mat-hint>The bucket in which to store backups.</mat-hint>
-      @if (form.get(Controls.Name).hasError('required')) {
+      @if (form.get(Controls.Bucket).hasError('required')) {
       <mat-error>
         <strong>Required</strong>
       </mat-error>
@@ -69,12 +69,14 @@
       <input [formControlName]="Controls.AccessKeyId"
              matInput
              kmInputPassword>
+      <mat-hint>Optional. Leave empty for anonymous S3 access.</mat-hint>
     </mat-form-field>
     <mat-form-field>
       <mat-label>Secret Access Key</mat-label>
       <input [formControlName]="Controls.SecretAccessKey"
              matInput
              kmInputPassword>
+      <mat-hint>Optional. Leave empty for anonymous S3 access.</mat-hint>
     </mat-form-field>
     <mat-form-field subscriptSizing="dynamic">
       <mat-label>Backup Sync Period</mat-label>
@@ -103,12 +105,32 @@
       <input [formControlName]="Controls.Region"
              matInput>
       <mat-hint>The AWS region where the bucket is located.</mat-hint>
+      @if (form.get(Controls.Region).hasError('required')) {
+      <mat-error>
+        <strong>Required</strong>
+      </mat-error>
+      }
+      @if (form.get(Controls.Region).hasError('invalidDnsName')) {
+      <mat-error>
+        Region must be a valid DNS name.
+      </mat-error>
+      }
     </mat-form-field>
     <mat-form-field>
-      <mat-label>Endpoints</mat-label>
+      <mat-label>Endpoint URL</mat-label>
       <input [formControlName]="Controls.Endpoints"
              matInput>
       <mat-hint>Specify the AWS S3 URL here.</mat-hint>
+      @if (form.get(Controls.Endpoints).hasError('required')) {
+      <mat-error>
+        <strong>Required</strong>
+      </mat-error>
+      }
+      @if (form.get(Controls.Endpoints).hasError('invalidEndpointUrl')) {
+      <mat-error>
+        Endpoint URL must start with http:// or https:// and contain a valid DNS host.
+      </mat-error>
+      }
     </mat-form-field>
     <mat-form-field>
       <mat-label>Default Checksum Algorithm</mat-label>
diff --git a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/component.ts b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/component.ts
index c231b639d5..fd39b994e3 100644
--- a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/component.ts
+++ b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/component.ts
@@ -23,6 +23,7 @@ import {MatDialog, MatDialogConfig} from '@angular/material/dialog';
 import {MatPaginator} from '@angular/material/paginator';
 import {MatSort} from '@angular/material/sort';
 import {MatTableDataSource} from '@angular/material/table';
+import {MatTooltip} from '@angular/material/tooltip';
 import {ProjectService} from '@app/core/services/project';
 import {BackupStorageLocation, BackupType} from '@app/shared/entity/backup';
 import {Project} from '@app/shared/entity/project';
@@ -46,6 +47,7 @@ import {DISABLED_TOOLTIP_MESSAGE} from '@app/shared/constants/common';
 })
 export class BackupStorageLocationsListComponent implements OnInit, OnDestroy {
   private readonly _unsubscribe = new Subject<void>();
+  private readonly _copiedStatusMessageByBSL = new Map<string, boolean>();
   private _selectedProject: Project;
   private _user: Member;
   private _currentGroupConfig: GroupConfig;
@@ -109,6 +111,25 @@ export class BackupStorageLocationsListComponent implements OnInit, OnDestroy {
     return getClusterBackupHealthStatus(phase).icon;
   }
 
+  getStatusTooltip(bsl: BackupStorageLocation): string {
+    return this._copiedStatusMessageByBSL.get(bsl.name) ? 'Error message copied' : bsl.status?.message;
+  }
+
+  canCopyStatusMessage(bsl: BackupStorageLocation): boolean {
+    return !this._isBSLAvailable(bsl) && !!bsl.status?.message;
+  }
+
+  copyStatusMessage(bsl: BackupStorageLocation, tooltip: MatTooltip): void {
+    if (!this.canCopyStatusMessage(bsl)) {
+      return;
+    }
+
+    navigator.clipboard.writeText(bsl.status.message);
+    this._copiedStatusMessageByBSL.set(bsl.name, true);
+    tooltip.message = 'Error message copied';
+    tooltip.show(0);
+  }
+
   addBackupStorageLocation(): void {
     const config: MatDialogConfig = {
       data: {
@@ -173,4 +194,9 @@ export class BackupStorageLocationsListComponent implements OnInit, OnDestroy {
         this.dataSource.data = this.backupStorageLocations;
       });
   }
+
+  private _isBSLAvailable(bsl: BackupStorageLocation): boolean {
+    const phase = bsl.status?.phase || '';
+    return phase.toLowerCase() === 'available';
+  }
 }
diff --git a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/template.html b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/template.html
index aee09f2f43..45cb584991 100644
--- a/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/template.html
+++ b/modules/web/src/app/dynamic/enterprise/cluster-backups/list/backup-storage-location/template.html
@@ -48,8 +48,11 @@
             class="km-header-cell"></th>
         <td mat-cell
             *matCellDef="let element">
-          <i [matTooltip]="element.status?.message"
+          <i [matTooltip]="getStatusTooltip(element)"
+             #statusTooltip="matTooltip"
              [ngClass]="getStatusIcon(element.status?.phase)"
+             [class.km-pointer]="canCopyStatusMessage(element)"
+             (click)="copyStatusMessage(element, statusTooltip)"
              class="km-vertical-center"></i>
         </td>
       </ng-container>
diff --git a/modules/web/src/app/dynamic/module-registry.ce.ts b/modules/web/src/app/dynamic/module-registry.ce.ts
index b3eb10883c..f1bb2d4b60 100644
--- a/modules/web/src/app/dynamic/module-registry.ce.ts
+++ b/modules/web/src/app/dynamic/module-registry.ce.ts
@@ -23,6 +23,7 @@ export namespace DynamicModule {
   export const Quotas = import('./community/quotas/module').then(module => module.QuotasModule);
   export const Group = import('./community/group/module').then(module => module.GroupModule);
   export const ClusterBackups = import('./community/cluster-backups/module').then(module => module.ClusterBackupsModule);
+  export const AddBackupStorageLocationDialogComponent = Promise.resolve(null);
   export const KyvernoPolicies = import('./community/kyverno-policies/module').then(module => module.KyvernoPoliciesModule);
   export const isEnterpriseEdition = false;
 }
diff --git a/modules/web/src/app/dynamic/module-registry.ts b/modules/web/src/app/dynamic/module-registry.ts
index 9d50effb44..c2df087f2c 100644
--- a/modules/web/src/app/dynamic/module-registry.ts
+++ b/modules/web/src/app/dynamic/module-registry.ts
@@ -28,6 +28,10 @@ export namespace DynamicModule {
   export const ClusterBackups = import('./enterprise/cluster-backups/module').then(
     module => module.ClusterBackupsModule
   );
+  export const AddBackupStorageLocationDialogComponent =
+    import('./enterprise/cluster-backups/list/backup-storage-location/add-dialog/component').then(
+      module => module.AddBackupStorageLocationDialogComponent
+    );
   export const KyvernoPolicies = import('./enterprise/kyverno-policies/module').then(
     module => module.KyvernoPoliciesModule
   );
diff --git a/modules/web/src/app/wizard/step/cluster/component.ts b/modules/web/src/app/wizard/step/cluster/component.ts
index c636c6d290..b463d720ef 100644
--- a/modules/web/src/app/wizard/step/cluster/component.ts
+++ b/modules/web/src/app/wizard/step/cluster/component.ts
@@ -23,6 +23,7 @@ import {
   Validators,
 } from '@angular/forms';
 import {MatDialog} from '@angular/material/dialog';
+import {MatSelectChange} from '@angular/material/select';
 import {ApplicationService} from '@app/core/services/application';
 import {ClusterBackupService} from '@app/core/services/cluster-backup';
 import {FeatureGateService} from '@app/core/services/feature-gate';
@@ -170,6 +171,7 @@ enum Controls {
   standalone: false,
 })
 export class ClusterStepComponent extends StepBase implements OnInit, ControlValueAccessor, Validator, OnDestroy {
+  readonly createBackupStorageLocationOptionValue = '__create_backup_storage_location__';
   containerRuntime = ContainerRuntime;
   admissionPlugin = AdmissionPlugin;
   masterVersions: MasterVersion[] = [];
@@ -217,6 +219,7 @@ export class ClusterStepComponent extends StepBase implements OnInit, ControlVal
   private _datacenterSpec: Datacenter;
   private _seedSettings: SeedSettings;
   private _settings: AdminSettings;
+  private _selectedProjectID: string;
   private _auditWebhookBackendChangesSubscription: Subscription;
   private readonly _minNameLength = 5;
   private readonly _canalDualStackMinimumSupportedVersion = '3.22.0';
@@ -289,9 +292,10 @@ export class ClusterStepComponent extends StepBase implements OnInit, ControlVal
       this.form.updateValueAndValidity();
     });
 
-    this._projectService.selectedProject
-      .pipe(takeUntil(this._unsubscribe))
-      .subscribe(project => this._getCBSL(project.id));
+    this._projectService.selectedProject.pipe(takeUntil(this._unsubscribe)).subscribe(project => {
+      this._selectedProjectID = project.id;
+      this._getCBSL(project.id);
+    });
 
     this._fetchCNIPlugins();
 
@@ -1215,11 +1219,49 @@ export class ClusterStepComponent extends StepBase implements OnInit, ControlVal
       .listBackupStorageLocation(projectID)
       .pipe(takeUntil(this._unsubscribe))
       .subscribe(cbslList => {
-        this.backupStorageLocationsList = cbslList;
-        this.backupStorageLocationLabel = cbslList.length ? BSLListState.Ready : BSLListState.Empty;
+        this.backupStorageLocationsList = cbslList.filter(bsl => this._isBackupStorageLocationAvailable(bsl));
+        this.backupStorageLocationLabel = this.backupStorageLocationsList.length
+          ? BSLListState.Ready
+          : BSLListState.Empty;
+
+        const backupStorageLocationControl = this.form.get(Controls.BackupStorageLocation);
+        if (
+          backupStorageLocationControl &&
+          !this.backupStorageLocationsList.some(bsl => bsl.name === backupStorageLocationControl.value)
+        ) {
+          backupStorageLocationControl.reset();
+        }
       });
   }
 
+  async onBackupStorageLocationSelectionChange(event: MatSelectChange): Promise<void> {
+    if (event.value !== this.createBackupStorageLocationOptionValue) {
+      return;
+    }
+
+    const backupStorageLocationControl = this.form.get(Controls.BackupStorageLocation);
+    const previousValue = this._clusterSpecService.cluster?.spec?.backupConfig?.backupStorageLocation?.name ?? '';
+    backupStorageLocationControl.setValue(previousValue, {emitEvent: false});
+
+    const AddBackupStorageLocationDialogComponent = await DynamicModule.AddBackupStorageLocationDialogComponent;
+    if (!AddBackupStorageLocationDialogComponent) {
+      return;
+    }
+    this._matDialog
+      .open(AddBackupStorageLocationDialogComponent, {
+        data: {projectID: this._selectedProjectID},
+      })
+      .afterClosed()
+      .pipe(take(1))
+      .pipe(filter(Boolean))
+      .subscribe(() => this._getCBSL(this._selectedProjectID));
+  }
+
+  private _isBackupStorageLocationAvailable(bsl: BackupStorageLocation): boolean {
+    const status = bsl.status?.phase || bsl.spec?.status || '';
+    return status.toLowerCase() === 'available';
+  }
+
   private _handleClusterBackupChange(): void {
     this.form
       .get(Controls.BackupStorageLocation)
diff --git a/modules/web/src/app/wizard/step/cluster/template.html b/modules/web/src/app/wizard/step/cluster/template.html
index 3c0698a6e5..8e3fb8cc13 100644
--- a/modules/web/src/app/wizard/step/cluster/template.html
+++ b/modules/web/src/app/wizard/step/cluster/template.html
@@ -494,11 +494,13 @@ <h4>IPv6</h4>
             <mat-form-field>
               <mat-label>{{backupStorageLocationLabel}}</mat-label>
               <mat-select [formControlName]="Controls.BackupStorageLocation"
+                          (selectionChange)="onBackupStorageLocationSelectionChange($event)"
                           disableOptionCentering>
                 @for (bsl of backupStorageLocationsList; track bsl) {
                 <mat-option [value]="bsl.name">{{bsl.displayName}}
                 </mat-option>
                 }
+                <mat-option [value]="createBackupStorageLocationOptionValue">+ Create Backup Storage Location</mat-option>
               </mat-select>
               @if (form.get(Controls.BackupStorageLocation).hasError('required')) {
               <mat-error>