diff --git a/server/src/internalClusterTest/java/org/opensearch/indices/replication/SegmentReplicationAllocationIT.java b/server/src/internalClusterTest/java/org/opensearch/indices/replication/SegmentReplicationAllocationIT.java
index 30edea6551067..669e24f9fb555 100644
--- a/server/src/internalClusterTest/java/org/opensearch/indices/replication/SegmentReplicationAllocationIT.java
+++ b/server/src/internalClusterTest/java/org/opensearch/indices/replication/SegmentReplicationAllocationIT.java
@@ -31,6 +31,9 @@
 import java.util.stream.Collectors;
 
 import static org.opensearch.cluster.routing.ShardRoutingState.STARTED;
+import static org.opensearch.cluster.routing.allocation.allocator.BalancedShardsAllocator.PREFER_PRIMARY_SHARD_BALANCE;
+import static org.opensearch.cluster.routing.allocation.allocator.BalancedShardsAllocator.PREFER_PRIMARY_SHARD_REBALANCE;
+import static org.opensearch.cluster.routing.allocation.allocator.BalancedShardsAllocator.PRIMARY_SHARD_REBALANCE_BUFFER;
 import static org.opensearch.test.hamcrest.OpenSearchAssertions.assertAcked;
 
 @OpenSearchIntegTestCase.ClusterScope(scope = OpenSearchIntegTestCase.Scope.TEST, numDataNodes = 0)
@@ -58,6 +61,20 @@ public void enablePreferPrimaryBalance() {
         );
     }
 
+    public void setAllocationRelocationStrategy(boolean preferPrimaryBalance, boolean preferPrimaryRebalance, float buffer) {
+        assertAcked(
+            client().admin()
+                .cluster()
+                .prepareUpdateSettings()
+                .setPersistentSettings(
+                    Settings.builder()
+                        .put(PREFER_PRIMARY_SHARD_BALANCE.getKey(), preferPrimaryBalance)
+                        .put(PREFER_PRIMARY_SHARD_REBALANCE.getKey(), preferPrimaryRebalance)
+                        .put(PRIMARY_SHARD_REBALANCE_BUFFER.getKey(), buffer)
+                )
+        );
+    }
+
     /**
      * This test verifies that the overall primary balance is attained during allocation. This test verifies primary
      * balance per index and across all indices is maintained.
@@ -87,7 +104,7 @@ public void testGlobalPrimaryAllocation() throws Exception {
         state = client().admin().cluster().prepareState().execute().actionGet().getState();
         logger.info(ShardAllocations.printShardDistribution(state));
         verifyPerIndexPrimaryBalance();
-        verifyPrimaryBalance();
+        verifyPrimaryBalance(0.0f);
     }
 
     /**
@@ -224,6 +241,70 @@ public void testAllocationWithDisruption() throws Exception {
         verifyPerIndexPrimaryBalance();
     }
 
+    /**
+     * Similar to testSingleIndexShardAllocation test but creates multiple indices, multiple nodes adding in and getting
+     * removed. The test asserts post each such event that primary shard distribution is balanced for each index as well as across the nodes
+     * when the PREFER_PRIMARY_SHARD_REBALANCE is set to true
+     */
+    public void testAllocationAndRebalanceWithDisruption() throws Exception {
+        internalCluster().startClusterManagerOnlyNode();
+        final int maxReplicaCount = 2;
+        final int maxShardCount = 2;
+        // Create higher number of nodes than number of shards to reduce chances of SameShardAllocationDecider kicking-in
+        // and preventing primary relocations
+        final int nodeCount = randomIntBetween(5, 10);
+        final int numberOfIndices = randomIntBetween(1, 10);
+        final float buffer = randomIntBetween(1, 4) * 0.10f;
+
+        logger.info("--> Creating {} nodes", nodeCount);
+        final List<String> nodeNames = new ArrayList<>();
+        for (int i = 0; i < nodeCount; i++) {
+            nodeNames.add(internalCluster().startNode());
+        }
+        setAllocationRelocationStrategy(true, true, buffer);
+
+        int shardCount, replicaCount;
+        ClusterState state;
+        for (int i = 0; i < numberOfIndices; i++) {
+            shardCount = randomIntBetween(1, maxShardCount);
+            replicaCount = randomIntBetween(1, maxReplicaCount);
+            logger.info("--> Creating index test{} with primary {} and replica {}", i, shardCount, replicaCount);
+            createIndex("test" + i, shardCount, replicaCount, i % 2 == 0);
+            ensureGreen(TimeValue.timeValueSeconds(60));
+            if (logger.isTraceEnabled()) {
+                state = client().admin().cluster().prepareState().execute().actionGet().getState();
+                logger.info(ShardAllocations.printShardDistribution(state));
+            }
+        }
+        state = client().admin().cluster().prepareState().execute().actionGet().getState();
+        logger.info(ShardAllocations.printShardDistribution(state));
+        verifyPerIndexPrimaryBalance();
+        verifyPrimaryBalance(buffer);
+
+        final int additionalNodeCount = randomIntBetween(1, 5);
+        logger.info("--> Adding {} nodes", additionalNodeCount);
+
+        internalCluster().startNodes(additionalNodeCount);
+        ensureGreen(TimeValue.timeValueSeconds(60));
+        state = client().admin().cluster().prepareState().execute().actionGet().getState();
+        logger.info(ShardAllocations.printShardDistribution(state));
+        verifyPerIndexPrimaryBalance();
+        verifyPrimaryBalance(buffer);
+
+        int nodeCountToStop = additionalNodeCount;
+        while (nodeCountToStop > 0) {
+            internalCluster().stopRandomDataNode();
+            // give replica a chance to promote as primary before terminating node containing the replica
+            ensureGreen(TimeValue.timeValueSeconds(60));
+            nodeCountToStop--;
+        }
+        state = client().admin().cluster().prepareState().execute().actionGet().getState();
+        logger.info("--> Cluster state post nodes stop {}", state);
+        logger.info(ShardAllocations.printShardDistribution(state));
+        verifyPerIndexPrimaryBalance();
+        verifyPrimaryBalance(buffer);
+    }
+
     /**
      * Utility method which ensures cluster has balanced primary shard distribution across a single index.
      * @throws Exception exception
@@ -263,7 +344,7 @@ private void verifyPerIndexPrimaryBalance() throws Exception {
         }, 60, TimeUnit.SECONDS);
     }
 
-    private void verifyPrimaryBalance() throws Exception {
+    private void verifyPrimaryBalance(float buffer) throws Exception {
         assertBusy(() -> {
             final ClusterState currentState = client().admin().cluster().prepareState().execute().actionGet().getState();
             RoutingNodes nodes = currentState.getRoutingNodes();
@@ -278,7 +359,7 @@ private void verifyPrimaryBalance() throws Exception {
                     .filter(ShardRouting::primary)
                     .collect(Collectors.toList())
                     .size();
-                assertTrue(primaryCount <= avgPrimaryShardsPerNode);
+                assertTrue(primaryCount <= (avgPrimaryShardsPerNode * (1 + buffer)));
             }
         }, 60, TimeUnit.SECONDS);
     }