diff --git a/packages/odata-service-inquirer/src/prompts/datasources/sap-system/system-selection/questions.ts b/packages/odata-service-inquirer/src/prompts/datasources/sap-system/system-selection/questions.ts
index 6cbc26a044..712fb92ceb 100644
--- a/packages/odata-service-inquirer/src/prompts/datasources/sap-system/system-selection/questions.ts
+++ b/packages/odata-service-inquirer/src/prompts/datasources/sap-system/system-selection/questions.ts
@@ -64,7 +64,9 @@ async function validateSystemSelection(
     requiredOdataVersion?: OdataVersion
 ): Promise<ValidationResult> {
     PromptState.reset();
-    if (systemSelection.type === 'newSystemChoice') {
+    if (systemSelection.type === 'newSystemChoice' || systemSelection.type === 'cfAbapEnvService') {
+        // Reset the connection state
+        connectionValidator.resetConnectionState(true);
         return true;
     }
     let connectValResult: ValidationResult = false;
@@ -88,9 +90,6 @@ async function validateSystemSelection(
             connectionValidator,
             requiredOdataVersion
         );
-    } else if (systemSelection.type === 'cfAbapEnvService') {
-        // Reset previous selections connection state
-        connectionValidator.resetConnectionState(true);
     }
     return connectValResult;
 }
diff --git a/packages/odata-service-inquirer/test/unit/prompts/sap-system/system-selection/questions.test.ts b/packages/odata-service-inquirer/test/unit/prompts/sap-system/system-selection/questions.test.ts
index ef8ac7990b..21de01b1f9 100644
--- a/packages/odata-service-inquirer/test/unit/prompts/sap-system/system-selection/questions.test.ts
+++ b/packages/odata-service-inquirer/test/unit/prompts/sap-system/system-selection/questions.test.ts
@@ -318,18 +318,29 @@ describe('Test system selection prompts', () => {
         );
     });
 
-    test('Should reset the connection state when the source system `cfAbapEnvService`', async () => {
+    test('Should reset the connection state when the source system `cfAbapEnvService` or `newSystemChoice`', async () => {
         const connectValidator = new ConnectionValidator();
         (getPromptHostEnvironment as jest.Mock).mockReturnValue(hostEnvironment.cli);
         mockIsAppStudio = true;
-        const systemConnectionQuestions = await getSystemConnectionQuestions(connectValidator);
-        const systemSelectionPrompt = systemConnectionQuestions[0] as ListQuestion;
+        let systemConnectionQuestions = await getSystemConnectionQuestions(connectValidator);
+        let systemSelectionPrompt = systemConnectionQuestions[0] as ListQuestion;
         expect(
             await systemSelectionPrompt.validate?.({
                 type: 'cfAbapEnvService',
                 system: 'cfAbapEnvService'
             } as SystemSelectionAnswerType)
-        ).toBe(false);
+        ).toBe(true);
+        expect(resetConnectionState).toHaveBeenCalled();
+
+        mockIsAppStudio = false;
+        systemConnectionQuestions = await getSystemConnectionQuestions(connectValidator);
+        systemSelectionPrompt = systemConnectionQuestions[0] as ListQuestion;
+        expect(
+            await systemSelectionPrompt.validate?.({
+                type: 'newSystemChoice',
+                system: '!@£*&937newSystem*X~qy^'
+            } as SystemSelectionAnswerType)
+        ).toBe(true);
         expect(resetConnectionState).toHaveBeenCalled();
     });