diff --git a/components/espcoredump/Kconfig b/components/espcoredump/Kconfig
index 199d4e0bc8..623fc059ac 100644
--- a/components/espcoredump/Kconfig
+++ b/components/espcoredump/Kconfig
@@ -91,7 +91,8 @@ menu "Core dump"
         depends on ESP_COREDUMP_ENABLE
         range 0 4096 if !ESP_COREDUMP_USE_STACK_SIZE
         range 1280 4096 if ESP_COREDUMP_USE_STACK_SIZE
-        default 0
+        default 0 if !ESP_COREDUMP_USE_STACK_SIZE
+        default 1280 if ESP_COREDUMP_USE_STACK_SIZE
         help
             Size of the memory to be reserved for core dump stack. If 0 core dump process will run on
             the stack of crashed task/ISR, otherwise special stack will be allocated.
diff --git a/tools/test_apps/system/panic/main/CMakeLists.txt b/tools/test_apps/system/panic/main/CMakeLists.txt
index 83427066bf..92dc346341 100644
--- a/tools/test_apps/system/panic/main/CMakeLists.txt
+++ b/tools/test_apps/system/panic/main/CMakeLists.txt
@@ -1,3 +1,3 @@
 idf_component_register(SRCS "test_panic_main.c"
                        INCLUDE_DIRS "."
-                       REQUIRES spi_flash esp_system esp_partition)
+                       REQUIRES spi_flash esp_psram esp_system esp_partition)
diff --git a/tools/test_apps/system/panic/main/test_panic_main.c b/tools/test_apps/system/panic/main/test_panic_main.c
index 2b4c4512ef..5d9211e52f 100644
--- a/tools/test_apps/system/panic/main/test_panic_main.c
+++ b/tools/test_apps/system/panic/main/test_panic_main.c
@@ -17,6 +17,9 @@ static void test_abort(void);
 static void test_abort_cache_disabled(void);
 static void test_int_wdt(void);
 static void test_task_wdt_cpu0(void);
+#if CONFIG_ESP_COREDUMP_ENABLE_TO_FLASH && CONFIG_SPIRAM_ALLOW_STACK_EXTERNAL_MEMORY
+static void test_panic_extram_stack(void);
+#endif
 #if !CONFIG_FREERTOS_UNICORE
 static void test_task_wdt_cpu1(void);
 static void test_task_wdt_both_cpus(void);
@@ -55,6 +58,9 @@ void app_main(void)
     HANDLE_TEST(test_abort_cache_disabled);
     HANDLE_TEST(test_int_wdt);
     HANDLE_TEST(test_task_wdt_cpu0);
+#if CONFIG_ESP_COREDUMP_ENABLE_TO_FLASH && CONFIG_SPIRAM_ALLOW_STACK_EXTERNAL_MEMORY
+    HANDLE_TEST(test_panic_extram_stack);
+#endif
 #if !CONFIG_FREERTOS_UNICORE
     HANDLE_TEST(test_task_wdt_cpu1);
     HANDLE_TEST(test_task_wdt_both_cpus);
@@ -102,6 +108,34 @@ static void test_task_wdt_cpu0(void)
     }
 }
 
+#if CONFIG_ESP_COREDUMP_ENABLE_TO_FLASH && CONFIG_SPIRAM_ALLOW_STACK_EXTERNAL_MEMORY
+
+static void stack_in_extram(void* arg) {
+    (void) arg;
+    /* Abort instead of using a load/store prohibited to prevent a sanitize error */
+    abort();
+}
+
+static void test_panic_extram_stack(void) {
+    /* Start by initializing a Task which has a stack in external RAM */
+    StaticTask_t handle;
+    const uint32_t stack_size = 8192;
+    void* stack = heap_caps_malloc(stack_size, MALLOC_CAP_SPIRAM);
+
+    /* Make sure the stack is in external RAM */
+    if (!esp_ptr_external_ram(stack)) {
+        die("Allocated stack is not in external RAM!\n");
+    }
+
+    xTaskCreateStatic(stack_in_extram, "Task_stack_extram", stack_size, NULL, 4, (StackType_t*) stack, &handle);
+
+    vTaskDelay(1000);
+}
+
+
+#endif // ESP_COREDUMP_ENABLE_TO_FLASH && SPIRAM_ALLOW_STACK_EXTERNAL_MEMORY
+
+
 #if !CONFIG_FREERTOS_UNICORE
 static void infinite_loop(void* arg) {
     (void) arg;
diff --git a/tools/test_apps/system/panic/pytest_panic.py b/tools/test_apps/system/panic/pytest_panic.py
index a923f8cf4e..ff7a64e76c 100644
--- a/tools/test_apps/system/panic/pytest_panic.py
+++ b/tools/test_apps/system/panic/pytest_panic.py
@@ -28,6 +28,14 @@ CONFIGS_ESP32 = [
     pytest.param('panic', marks=[pytest.mark.esp32]),
 ]
 
+# IDF-5692: Uncomment the marks related to ESP32-S3 and quad_psram once ESP32-S3 runners are available
+CONFIG_EXTRAM_STACK = [
+    pytest.param('coredump_extram_stack',
+                 marks=[pytest.mark.esp32, pytest.mark.esp32s2, pytest.mark.psram,
+                        # pytest.mark.esp32s3, pytest.mark.quad_psram
+                        ])
+]
+
 
 def get_default_backtrace(config: str) -> List[str]:
     return [config, 'app_main', 'main_task', 'vPortTaskWrapper']
@@ -142,6 +150,23 @@ def test_task_wdt_both_cpus(dut: PanicTestDut, config: str, test_func_name: str)
         common_test(dut, config)
 
 
+@pytest.mark.parametrize('config', CONFIG_EXTRAM_STACK, indirect=True)
+def test_panic_extram_stack(dut: PanicTestDut, config: str, test_func_name: str) -> None:
+    dut.expect_test_func_name(test_func_name)
+    dut.expect_none('Allocated stack is not in external RAM')
+    dut.expect_none('Guru Meditation')
+    dut.expect_backtrace()
+    dut.expect_elf_sha256()
+    # Check that coredump is getting written to flash
+    dut.expect_exact('Save core dump to flash...')
+    # And that the stack is replaced and restored
+    dut.expect_exact('Backing up stack @')
+    dut.expect_exact('Restoring stack')
+    # The caller must be accessible after restoring the stack
+    dut.expect_exact('Core dump has been saved to flash.')
+    common_test(dut, config)
+
+
 @pytest.mark.parametrize('config', CONFIGS, indirect=True)
 @pytest.mark.generic
 def test_int_wdt(
diff --git a/tools/test_apps/system/panic/sdkconfig.ci.coredump_extram_stack b/tools/test_apps/system/panic/sdkconfig.ci.coredump_extram_stack
new file mode 100644
index 0000000000..06ac9fcc8e
--- /dev/null
+++ b/tools/test_apps/system/panic/sdkconfig.ci.coredump_extram_stack
@@ -0,0 +1,11 @@
+CONFIG_IDF_TARGET="esp32"
+CONFIG_ESP_COREDUMP_ENABLE_TO_FLASH=y
+CONFIG_ESP_COREDUMP_DATA_FORMAT_ELF=y
+CONFIG_ESP_COREDUMP_CHECKSUM_SHA256=y
+# CONFIG_ESP_SYSTEM_PANIC_GDBSTUB is not set
+CONFIG_ESP_SYSTEM_PANIC_PRINT_HALT=y
+# We need to have the coredump info log
+CONFIG_LOG_DEFAULT_LEVEL_INFO=y
+CONFIG_SPIRAM=y
+CONFIG_SPIRAM_ALLOW_STACK_EXTERNAL_MEMORY=y
+CONFIG_ESP_COREDUMP_USE_STACK_SIZE=y