diff --git a/apps/design-system/src/subjects/views/delegates/delegate-selector.tsx b/apps/design-system/src/subjects/views/delegates/delegate-selector.tsx
index c2c6145a64..8ad5a5cafb 100644
--- a/apps/design-system/src/subjects/views/delegates/delegate-selector.tsx
+++ b/apps/design-system/src/subjects/views/delegates/delegate-selector.tsx
@@ -59,7 +59,7 @@ const DelegateSelectorDrawer = ({ open, setOpen, preSelectedTags, onSubmit, disa
         <FormSeparator className="w-full" />
         <div className="flex">
           Haven&apos;t installed a delegate yet?
-          <StyledLink className="flex flex-row items-center ml-1" variant="accent" to="#">
+          <StyledLink className="ml-1 flex flex-row items-center" variant="accent" to="#">
             Install delegate <Icon name="attachment-link" className="ml-1" size={12} />
           </StyledLink>
         </div>
@@ -68,6 +68,8 @@ const DelegateSelectorDrawer = ({ open, setOpen, preSelectedTags, onSubmit, disa
 
       <DelegateSelectorForm
         delegates={delegatesData}
+        // TODO: Uncomment to check empty tags list when preSelected tags are defined
+        // tagsList={[]}
         tagsList={mockTagsList}
         useTranslationStore={useTranslationStore}
         isLoading={false}
@@ -76,6 +78,8 @@ const DelegateSelectorDrawer = ({ open, setOpen, preSelectedTags, onSubmit, disa
         isDelegateSelected={isDelegateSelected}
         getMatchedDelegatesCount={getMatchedDelegatesCount}
         preSelectedTags={preSelectedTags}
+        // TODO: Uncomment to check empty tags list when preSelected tags are defined
+        // preSelectedTags={['sanity-windows', 'eightfivetwoold', 'qa-automation', 'sanity']}
         disableAnyDelegate={disableAnyDelegate}
       />
     </Drawer.Content>
@@ -116,7 +120,7 @@ export const DelegateSelector = () => {
         onEdit={() => setOpenA(true)}
         onClear={() => setTagsA([])}
         renderValue={tag => tag}
-        className="max-w-xs mb-8"
+        className="mb-8 max-w-xs"
       />
 
       <DelegateSelectorDrawer open={openA} setOpen={setOpenA} preSelectedTags={tagsA} onSubmit={handleSubmitA} />
@@ -130,7 +134,7 @@ export const DelegateSelector = () => {
           onEdit={() => setOpenB(true)}
           onClear={() => setTagsB([])}
           renderValue={tag => tag}
-          className="max-w-xs mb-8"
+          className="mb-8 max-w-xs"
         />
 
         <DelegateSelectorDrawer
diff --git a/packages/ui/src/components/multi-select/index.ts b/packages/ui/src/components/multi-select/index.ts
new file mode 100644
index 0000000000..442d6e2259
--- /dev/null
+++ b/packages/ui/src/components/multi-select/index.ts
@@ -0,0 +1 @@
+export * from './multi-select'
diff --git a/packages/ui/src/components/multi-select.tsx b/packages/ui/src/components/multi-select/multi-select.tsx
similarity index 58%
rename from packages/ui/src/components/multi-select.tsx
rename to packages/ui/src/components/multi-select/multi-select.tsx
index 5c14e34432..241b178f2c 100644
--- a/packages/ui/src/components/multi-select.tsx
+++ b/packages/ui/src/components/multi-select/multi-select.tsx
@@ -1,4 +1,4 @@
-import { ReactNode } from 'react'
+import { ReactNode, useEffect } from 'react'
 
 import {
   Button,
@@ -15,6 +15,8 @@ import { useDebounceSearch } from '@hooks/use-debounce-search'
 import { cn } from '@utils/cn'
 import { TFunction } from 'i18next'
 
+import { useSelectedFirstOptions } from './use-selected-first-options'
+
 export type MultiSelectOptionType<T = unknown> = T & {
   id: string | number
   label: string
@@ -30,6 +32,7 @@ export interface MultiSelectProps<T = unknown> {
   searchValue?: string
   handleChangeSearchValue?: (data: string) => void
   customOptionElem?: (data: MultiSelectOptionType<T>) => ReactNode
+  loading?: boolean
   error?: string
   label?: string
 }
@@ -44,14 +47,60 @@ export const MultiSelect = <T = unknown,>({
   searchValue = '',
   handleChangeSearchValue,
   customOptionElem,
+  loading,
   error,
   label
 }: MultiSelectProps<T>) => {
+  const { showSelectedFirstOnOpen, optionsToDisplay, setOptionsToDisplay } = useSelectedFirstOptions(
+    options,
+    selectedItems
+  )
+
   const { search, handleSearchChange } = useDebounceSearch({
     handleChangeSearchValue,
     searchValue
   })
 
+  useEffect(() => {
+    setOptionsToDisplay(options)
+  }, [search, options, setOptionsToDisplay])
+
+  const renderEmptyStateWithText = (stateText: string) => {
+    return (
+      <div className="px-5 py-4 text-center">
+        <span className="text-cn-foreground-2 leading-tight">{stateText}</span>
+      </div>
+    )
+  }
+
+  const renderOptions = () => {
+    return optionsToDisplay.length ? (
+      <ScrollArea viewportClassName="max-h-[300px]">
+        {optionsToDisplay.map(option => {
+          const isSelected = selectedItems.findIndex(it => it.id === option.id) > -1
+
+          return (
+            <DropdownMenu.Item
+              key={option.id}
+              className={cn('px-3', { 'pl-8': !isSelected })}
+              onSelect={e => {
+                e.preventDefault()
+                handleChange(option)
+              }}
+            >
+              <div className="flex items-center gap-x-2">
+                {isSelected && <Icon className="text-icons-2 min-w-3" name="tick" size={12} />}
+                {customOptionElem ? customOptionElem(option) : <span className="font-medium">{option.label}</span>}
+              </div>
+            </DropdownMenu.Item>
+          )
+        })}
+      </ScrollArea>
+    ) : (
+      renderEmptyStateWithText(t('views:noData.noResults', 'No search results'))
+    )
+  }
+
   return (
     <ControlGroup className={className}>
       {!!label && (
@@ -59,8 +108,8 @@ export const MultiSelect = <T = unknown,>({
           {label}
         </Label>
       )}
-      <DropdownMenu.Root>
-        <DropdownMenu.Trigger className="data-[state=open]:border-cn-borders-8 flex h-9 w-full items-center justify-between rounded border border-cn-borders-2 bg-cn-background-2 px-3 transition-colors">
+      <DropdownMenu.Root onOpenChange={showSelectedFirstOnOpen}>
+        <DropdownMenu.Trigger className="data-[state=open]:border-cn-borders-8 border-cn-borders-2 bg-cn-background-2 flex h-9 w-full items-center justify-between rounded border px-3 transition-colors">
           {placeholder}
           <Icon name="chevron-down" className="chevron-down ml-auto" size={12} />
         </DropdownMenu.Trigger>
@@ -80,39 +129,7 @@ export const MultiSelect = <T = unknown,>({
               <DropdownMenu.Separator />
             </>
           )}
-          {options.length ? (
-            <ScrollArea viewportClassName="max-h-[300px]">
-              {options.map(option => {
-                const isSelected = selectedItems.findIndex(it => it.id === option.id) > -1
-
-                return (
-                  <DropdownMenu.Item
-                    key={option.id}
-                    className={cn('px-3', { 'pl-8': !isSelected })}
-                    onSelect={e => {
-                      e.preventDefault()
-                      handleChange(option)
-                    }}
-                  >
-                    <div className="flex items-center gap-x-2">
-                      {isSelected && <Icon className="min-w-3 text-icons-2" name="tick" size={12} />}
-                      {customOptionElem ? (
-                        customOptionElem(option)
-                      ) : (
-                        <span className="font-medium">{option.label}</span>
-                      )}
-                    </div>
-                  </DropdownMenu.Item>
-                )
-              })}
-            </ScrollArea>
-          ) : (
-            <div className="px-5 py-4 text-center">
-              <span className="leading-tight text-cn-foreground-2">
-                {t('views:noData.noResults', 'No search results')}
-              </span>
-            </div>
-          )}
+          {loading ? renderEmptyStateWithText('Loading...') : renderOptions()}
         </DropdownMenu.Content>
       </DropdownMenu.Root>
       {!!selectedItems.length && (
diff --git a/packages/ui/src/components/multi-select/use-selected-first-options.ts b/packages/ui/src/components/multi-select/use-selected-first-options.ts
new file mode 100644
index 0000000000..a580bf7e40
--- /dev/null
+++ b/packages/ui/src/components/multi-select/use-selected-first-options.ts
@@ -0,0 +1,44 @@
+import { Dispatch, SetStateAction, useCallback, useMemo, useState } from 'react'
+
+import { MultiSelectOptionType } from '@/components'
+
+type UseSelectedFirstOptionsReturnType<TOption> = {
+  optionsToDisplay: MultiSelectOptionType<TOption>[]
+  setOptionsToDisplay: Dispatch<SetStateAction<MultiSelectOptionType<TOption>[]>>
+  showSelectedFirstOnOpen: (open: boolean) => void
+}
+
+export const useSelectedFirstOptions = <TOption>(
+  options: MultiSelectOptionType<TOption>[],
+  selectedItems: MultiSelectOptionType<Partial<TOption>>[]
+): UseSelectedFirstOptionsReturnType<TOption> => {
+  const [isOpen, setIsOpen] = useState(false)
+  const [optionsToDisplay, setOptionsToDisplay] = useState<MultiSelectOptionType<TOption>[]>(options)
+  const selectedIds = useMemo(() => new Set(selectedItems.map(item => item.id)), [selectedItems])
+
+  const showSelectedFirstOnOpen = useCallback(
+    open => {
+      if (open) {
+        const selectedFirst = [...options].sort((a, b) => {
+          const aSelected = selectedIds.has(a.id)
+          const bSelected = selectedIds.has(b.id)
+
+          if (aSelected === bSelected) return 0
+
+          return aSelected ? -1 : 1
+        })
+
+        setOptionsToDisplay(selectedFirst)
+      }
+
+      setIsOpen(open)
+    },
+    [selectedIds, options]
+  )
+
+  return {
+    optionsToDisplay: isOpen ? optionsToDisplay : options,
+    setOptionsToDisplay,
+    showSelectedFirstOnOpen
+  }
+}
diff --git a/packages/ui/src/views/delegates/delegate-selector/delegate-selector-form.tsx b/packages/ui/src/views/delegates/delegate-selector/delegate-selector-form.tsx
index 4db668dbc4..17705f21ee 100644
--- a/packages/ui/src/views/delegates/delegate-selector/delegate-selector-form.tsx
+++ b/packages/ui/src/views/delegates/delegate-selector/delegate-selector-form.tsx
@@ -17,6 +17,7 @@ import {
 import { SandboxLayout, TranslationStore } from '@/views'
 import { zodResolver } from '@hookform/resolvers/zod'
 import { RadioOption, RadioSelect } from '@views/components/RadioSelect'
+import { useBackendTagsSearch, useClientTagsSearch } from '@views/delegates/hooks'
 import { z } from 'zod'
 
 import { DelegateConnectivityList } from '../components/delegate-connectivity-list'
@@ -78,7 +79,12 @@ export const DelegateSelectorForm = (props: DelegateSelectorFormProps): JSX.Elem
     disableAnyDelegate
   } = props
   const { t } = useTranslationStore()
-  const [searchTag, setSearchTag] = useState('')
+
+  // TODO: Uncomment to check the client tags search
+  // const { searchTag, handleSearchChange, filteredTags } = useClientTagsSearch(tagsList, preSelectedTags)
+
+  const { searchTag, handleSearchChange, filteredTags, loadingTags } = useBackendTagsSearch(tagsList, preSelectedTags)
+
   const [matchedDelegates, setMatchedDelegates] = useState(0)
   const {
     register,
@@ -182,11 +188,12 @@ export const DelegateSelectorForm = (props: DelegateSelectorFormProps): JSX.Elem
                 label="Tags"
                 placeholder="Enter tags"
                 handleChange={handleTagChange}
-                options={tagsList.map(tag => {
+                options={filteredTags.map(tag => {
                   return { id: tag, label: tag }
                 })}
                 searchValue={searchTag}
-                handleChangeSearchValue={setSearchTag}
+                handleChangeSearchValue={handleSearchChange}
+                loading={loadingTags}
                 error={errors.tags?.message?.toString()}
               />
             </Fieldset>
@@ -202,7 +209,7 @@ export const DelegateSelectorForm = (props: DelegateSelectorFormProps): JSX.Elem
           </>
         )}
 
-        <div className="absolute inset-x-0 bottom-0 bg-cn-background-2 p-4 shadow-md">
+        <div className="bg-cn-background-2 absolute inset-x-0 bottom-0 p-4 shadow-md">
           <ControlGroup>
             <ButtonGroup className="flex flex-row justify-between">
               <Button type="button" variant="ghost" onClick={onBack}>
diff --git a/packages/ui/src/views/delegates/hooks/index.ts b/packages/ui/src/views/delegates/hooks/index.ts
new file mode 100644
index 0000000000..7ca86989a9
--- /dev/null
+++ b/packages/ui/src/views/delegates/hooks/index.ts
@@ -0,0 +1,2 @@
+export * from './use-client-tags-search'
+export * from './use-backend-tags-search'
diff --git a/packages/ui/src/views/delegates/hooks/use-backend-tags-search.ts b/packages/ui/src/views/delegates/hooks/use-backend-tags-search.ts
new file mode 100644
index 0000000000..f5d474f44a
--- /dev/null
+++ b/packages/ui/src/views/delegates/hooks/use-backend-tags-search.ts
@@ -0,0 +1,86 @@
+import { useCallback, useEffect, useRef, useState } from 'react'
+
+import { resolve } from 'path'
+
+import { defaultTo, isEqual } from 'lodash-es'
+
+const TAGS_MOCK = [
+  'myrunner',
+  'macos-arm64',
+  'west1-delegate-qa',
+  'linux-amd64',
+  'eightfivetwo',
+  'automation-eks-delegate'
+]
+
+export const useBackendTagsSearch = (tags: string[], selectedTags?: string[]) => {
+  const [searchTag, setSearchTag] = useState<string>('')
+  const [filteredTags, setFilteredTags] = useState<string[]>(() => defaultTo(selectedTags, []))
+  const [loadingTags, setLoadingTags] = useState<boolean>(false)
+  const latestQueryRef = useRef<string>('')
+
+  const fetchTagsFromBackend = useCallback(
+    (searchQuery: string): Promise<string[]> => {
+      return new Promise(resolve => {
+        console.log(`Fetching tags from backend... Query is ${searchQuery}`)
+        const tagsToResolve = tags.length === 0 ? TAGS_MOCK : tags
+
+        setTimeout(
+          () => {
+            if (searchQuery === '') {
+              resolve(tags)
+            } else {
+              const tagsToResolveFiltered = tagsToResolve.filter(tag =>
+                tag.toLowerCase().includes(searchQuery.toLowerCase())
+              )
+              resolve(tagsToResolveFiltered)
+            }
+          },
+          Math.floor(Math.random() * 3000)
+        )
+      })
+    },
+    [tags]
+  )
+
+  useEffect(() => {
+    const searchQuery = searchTag.trim()
+
+    if (searchQuery === latestQueryRef.current) {
+      return
+    }
+
+    latestQueryRef.current = searchQuery
+
+    setLoadingTags(true)
+
+    fetchTagsFromBackend(searchQuery)
+      .then(resolvedTags => {
+        setFilteredTags(prev => {
+          if (searchQuery === '' && resolvedTags.length === 0 && selectedTags) {
+            return selectedTags
+          }
+
+          if (isEqual(prev, resolvedTags)) {
+            return prev
+          }
+
+          return resolvedTags
+        })
+      })
+      .finally(() => {
+        setLoadingTags(false)
+      })
+  }, [searchTag, tags, selectedTags, fetchTagsFromBackend])
+
+  const handleSearchChange = useCallback((value: string) => {
+    setSearchTag(value)
+  }, [])
+
+  return {
+    searchTag,
+    filteredTags,
+    handleSearchChange,
+    loadingTags
+  }
+}
diff --git a/packages/ui/src/views/delegates/hooks/use-client-tags-search.ts b/packages/ui/src/views/delegates/hooks/use-client-tags-search.ts
new file mode 100644
index 0000000000..a3409516a5
--- /dev/null
+++ b/packages/ui/src/views/delegates/hooks/use-client-tags-search.ts
@@ -0,0 +1,28 @@
+import { useMemo, useState } from 'react'
+
+import { defaultTo } from 'lodash-es'
+
+export const useClientTagsSearch = (tags: string[], selectedTags?: string[]) => {
+  const [searchTag, setSearchTag] = useState('')
+  const filteredTags = useMemo(() => {
+    if (!searchTag && tags.length === 0) {
+      return defaultTo(selectedTags, [])
+    }
+
+    if (!searchTag) return tags
+
+    const search = searchTag.toLowerCase()
+
+    return tags.filter(tag => tag.toLowerCase().includes(search))
+  }, [searchTag, tags, selectedTags])
+
+  const handleSearchChange = (value: string) => {
+    setSearchTag(value)
+  }
+
+  return {
+    searchTag,
+    handleSearchChange,
+    filteredTags
+  }
+}