diff --git a/src/frequenz/channels/file_watcher.py b/src/frequenz/channels/file_watcher.py
index a4dc3074..ce10fb01 100644
--- a/src/frequenz/channels/file_watcher.py
+++ b/src/frequenz/channels/file_watcher.py
@@ -159,6 +159,11 @@ def __init__(
             watch_filter=self._filter_events,
             force_polling=force_polling,
             poll_delay_ms=int(polling_interval.total_seconds() * 1_000),
+            # The underlying Rust code performs periodic checks to see if it should stop watching.
+            # These checks raise TimeoutError, which by default would log misleading debug messages.
+            # Setting yield_on_timeout=True makes it yield an empty set instead of printing debug
+            # logs. We handle these empty sets in the `ready()` method by continuing to wait.
+            yield_on_timeout=True,
         )
         self._awatch_stopped_exc: Exception | None = None
         self._changes: set[FileChange] = set()
@@ -204,11 +209,13 @@ async def ready(self) -> bool:
         if self._awatch_stopped_exc is not None:
             return False
 
-        try:
-            self._changes = await anext(self._awatch)
-        except StopAsyncIteration as err:
-            self._awatch_stopped_exc = err
-            return False
+        # awatch will yield an empty set if rust notify timeout is reached.
+        while len(self._changes) == 0:
+            try:
+                self._changes = await anext(self._awatch)
+            except StopAsyncIteration as err:
+                self._awatch_stopped_exc = err
+                return False
 
         return True
 
diff --git a/tests/test_file_watcher.py b/tests/test_file_watcher.py
index 720de807..0e11207a 100644
--- a/tests/test_file_watcher.py
+++ b/tests/test_file_watcher.py
@@ -102,6 +102,7 @@ async def test_file_watcher_filter_events(
                 watch_filter=filter_events,
                 force_polling=True,
                 poll_delay_ms=1_000,
+                yield_on_timeout=True,
             )
         ]
         for event_type in EventType: