diff --git a/app/canvas/canvas.tsx b/app/canvas/canvas.tsx
index d2ef343437..30d4136a82 100644
--- a/app/canvas/canvas.tsx
+++ b/app/canvas/canvas.tsx
@@ -28,8 +28,9 @@ import {
   usePublishSelectedInstanceDataRect,
   usePublishHoveredInstanceRect,
   usePublishHoveredInstanceData,
-  useTrackSelectedInstance,
-  useTrackHoveredInstance,
+  useSetSelectedInstance,
+  useSetHoveredInstance,
+  useUnselectInstance,
 } from "./shared/instance";
 import { useUpdateStyle } from "./shared/style";
 import { useTrackSelectedElement } from "./shared/use-track-selected-element";
@@ -110,13 +111,14 @@ const DesignMode = ({ treeId, project }: DesignModeProps) => {
   useDeleteInstance();
   usePublishRootInstance();
   useTrackSelectedElement();
-  useTrackSelectedInstance();
+  useSetSelectedInstance();
   useTrackHoveredElement();
-  useTrackHoveredInstance();
+  useSetHoveredInstance();
   useSync({ project });
   useUpdateSelectedInstance();
   usePublishSelectedInstanceDataRect();
   usePublishHoveredInstanceRect();
+  useUnselectInstance();
   const elements = useElementsTree();
   return (
     // Using touch backend becuase html5 drag&drop doesn't fire drag events in our case
diff --git a/app/canvas/shared/instance.ts b/app/canvas/shared/instance.ts
index 529515dcdb..52ee8d8d32 100644
--- a/app/canvas/shared/instance.ts
+++ b/app/canvas/shared/instance.ts
@@ -238,28 +238,37 @@ export const usePublishHoveredInstanceRect = () => {
   useEffect(publishRect, [publishRect]);
 };
 
-export const useTrackHoveredInstance = () => {
+export const useSetHoveredInstance = () => {
   const [rootInstance] = useRootInstance();
   const [hoveredElement] = useHoveredElement();
   const [, setHoveredInstance] = useHoveredInstance();
 
   useEffect(() => {
-    if (rootInstance === undefined || hoveredElement === undefined) return;
-    const instance = findInstanceById(rootInstance, hoveredElement.id);
-    if (instance === undefined) return;
+    let instance;
+    if (rootInstance !== undefined && hoveredElement?.id) {
+      instance = findInstanceById(rootInstance, hoveredElement.id);
+    }
     setHoveredInstance(instance);
   }, [rootInstance, hoveredElement, setHoveredInstance]);
 };
 
-export const useTrackSelectedInstance = () => {
+export const useSetSelectedInstance = () => {
   const [rootInstance] = useRootInstance();
   const [selectedElement] = useSelectedElement();
   const [, setSelectedInstance] = useSelectedInstance();
 
   useEffect(() => {
-    if (selectedElement === undefined || rootInstance === undefined) return;
-    const instance = findInstanceById(rootInstance, selectedElement.id);
-    if (instance === undefined) return;
+    let instance;
+    if (rootInstance !== undefined && selectedElement?.id) {
+      instance = findInstanceById(rootInstance, selectedElement.id);
+    }
     setSelectedInstance(instance);
   }, [selectedElement, rootInstance]);
 };
+
+export const useUnselectInstance = () => {
+  const [, setSelectedElement] = useSelectedElement();
+  useSubscribe("unselectInstance", () => {
+    setSelectedElement(undefined);
+  });
+};
diff --git a/app/designer/designer.tsx b/app/designer/designer.tsx
index 3d902f8ad4..f2814f61fb 100644
--- a/app/designer/designer.tsx
+++ b/app/designer/designer.tsx
@@ -3,12 +3,19 @@ import { DndProvider } from "react-dnd";
 import { HTML5Backend } from "react-dnd-html5-backend";
 import { type Project, useSubscribe, usePublish } from "@webstudio-is/sdk";
 import type { Config } from "~/config";
-import type { HoveredInstanceData, SelectedInstanceData } from "~/shared/canvas-components";
+import type {
+  HoveredInstanceData,
+  SelectedInstanceData,
+} from "~/shared/canvas-components";
 import { Box, Flex, Grid, type CSS } from "~/shared/design-system";
 import interStyles from "~/shared/font-faces/inter.css";
 import { SidebarLeft } from "./features/sidebar-left";
 import { Inspector } from "./features/inspector";
-import { useHoveredInstanceData, useSelectedInstanceData, useSyncStatus } from "./shared/nano-states";
+import {
+  useHoveredInstanceData,
+  useSelectedInstanceData,
+  useSyncStatus,
+} from "./shared/nano-states";
 import { Topbar } from "./features/topbar";
 import designerStyles from "./designer.css";
 import { Breadcrumbs } from "./features/breadcrumbs";
@@ -48,10 +55,7 @@ const useSubscribeSelectedInstanceData = () => {
 
 const useSubscribeHoveredInstanceData = () => {
   const [, setValue] = useHoveredInstanceData();
-  useSubscribe<"hoverInstance", HoveredInstanceData>(
-    "hoverInstance",
-    setValue
-  );
+  useSubscribe<"hoverInstance", HoveredInstanceData>("hoverInstance", setValue);
 };
 
 const useSubscribeSyncStatus = () => {
@@ -163,7 +167,7 @@ export const Designer = ({ config, project }: DesignerProps) => {
   useSubscribeSyncStatus();
   useSubscribeRootInstance();
   useSubscribeSelectedInstanceData();
-  useSubscribeHoveredInstanceData()
+  useSubscribeHoveredInstanceData();
   useSubscribeBreakpoints();
   const [publish, publishRef] = usePublish();
   const [isPreviewMode] = useIsPreviewMode();
@@ -194,7 +198,7 @@ export const Designer = ({ config, project }: DesignerProps) => {
           publish={publish}
         />
         <Main>
-          <Workspace onTransitionEnd={onTransitionEnd}>
+          <Workspace onTransitionEnd={onTransitionEnd} publish={publish}>
             <CanvasIframe
               ref={iframeRefCallback}
               src={`${config.canvasPath}/${project.id}`}
diff --git a/app/designer/features/workspace/workspace.tsx b/app/designer/features/workspace/workspace.tsx
index 9a72f65c35..2b143646a8 100644
--- a/app/designer/features/workspace/workspace.tsx
+++ b/app/designer/features/workspace/workspace.tsx
@@ -1,6 +1,7 @@
 import { Box, Flex } from "~/shared/design-system";
 import { useCanvasWidth, useZoom } from "~/designer/shared/nano-states";
 import { CanvasTools } from "./canvas-tools";
+import { type Publish } from "@webstudio-is/sdk";
 
 const workspaceStyle = {
   flexGrow: 1,
@@ -24,13 +25,23 @@ const canvasContainerStyle = {
 type WorkspaceProps = {
   children: JSX.Element;
   onTransitionEnd: () => void;
+  publish: Publish;
 };
 
-export const Workspace = ({ children, onTransitionEnd }: WorkspaceProps) => {
+export const Workspace = ({
+  children,
+  onTransitionEnd,
+  publish,
+}: WorkspaceProps) => {
   const [zoom] = useZoom();
   const [canvasWidth] = useCanvasWidth();
+
+  const handleWorkspaceClick = () => {
+    publish({ type: "unselectInstance" });
+  };
+
   return (
-    <Box css={workspaceStyle}>
+    <Box css={workspaceStyle} onClick={handleWorkspaceClick}>
       <Flex
         direction="column"
         align="center"