diff --git a/drivers/bus/mhi/core/mhi_main.c b/drivers/bus/mhi/core/mhi_main.c
index b577f9477edf..cb0ba6b6e4f3 100644
--- a/drivers/bus/mhi/core/mhi_main.c
+++ b/drivers/bus/mhi/core/mhi_main.c
@@ -1207,19 +1207,21 @@ int mhi_process_ctrl_ev_ring(struct mhi_controller *mhi_cntrl,
 				enum MHI_PM_STATE new_state;
 
 				/*
-				 * Don't process sys error if device support
-				 * rddm since we will be processing rddm ee
-				 * event instead of sys error state change event
+				 * Allow move to SYS_ERROR even if RDDM is
+				 * supported so that core driver is inactive
+				 * with anticipation of an upcoming RDDM event
 				 */
-				if (mhi_cntrl->ee == MHI_EE_RDDM ||
-				    mhi_cntrl->rddm_supported)
-					break;
-
-				MHI_ERR("MHI system error detected\n");
 				write_lock_irq(&mhi_cntrl->pm_lock);
+				/* skip if RDDM event was already processed */
+				if (mhi_cntrl->ee == MHI_EE_RDDM) {
+					write_unlock_irq(&mhi_cntrl->pm_lock);
+					break;
+				}
 				new_state = mhi_tryset_pm_state(mhi_cntrl,
 							MHI_PM_SYS_ERR_DETECT);
 				write_unlock_irq(&mhi_cntrl->pm_lock);
+
+				MHI_ERR("MHI system error detected\n");
 				if (new_state == MHI_PM_SYS_ERR_DETECT)
 					mhi_process_sys_err(mhi_cntrl);
 				break;
diff --git a/drivers/bus/mhi/core/mhi_pm.c b/drivers/bus/mhi/core/mhi_pm.c
index d8e3c2154d86..a54903307b8d 100644
--- a/drivers/bus/mhi/core/mhi_pm.c
+++ b/drivers/bus/mhi/core/mhi_pm.c
@@ -102,8 +102,9 @@ static struct mhi_pm_transitions const mhi_state_transitions[] = {
 	},
 	{
 		MHI_PM_SYS_ERR_DETECT,
-		MHI_PM_SYS_ERR_PROCESS | MHI_PM_SHUTDOWN_PROCESS |
-		MHI_PM_LD_ERR_FATAL_DETECT | MHI_PM_SHUTDOWN_NO_ACCESS
+		MHI_PM_DEVICE_ERR_DETECT | MHI_PM_SYS_ERR_PROCESS |
+		MHI_PM_SHUTDOWN_PROCESS | MHI_PM_LD_ERR_FATAL_DETECT |
+		MHI_PM_SHUTDOWN_NO_ACCESS
 	},
 	{
 		MHI_PM_SYS_ERR_PROCESS,