diff --git a/.changeset/stale-berries-stare.md b/.changeset/stale-berries-stare.md
new file mode 100644
index 00000000000..4758ee7af91
--- /dev/null
+++ b/.changeset/stale-berries-stare.md
@@ -0,0 +1,5 @@
+---
+"saleor-dashboard": minor
+---
+
+Handle `replace` in the app-bridge routing updates
diff --git a/src/apps/components/AppFrame/appActionsHandler.test.ts b/src/apps/components/AppFrame/appActionsHandler.test.ts
index 6d769665cc0..a4448a171ef 100644
--- a/src/apps/components/AppFrame/appActionsHandler.test.ts
+++ b/src/apps/components/AppFrame/appActionsHandler.test.ts
@@ -139,6 +139,36 @@ describe("AppActionsHandler", function () {
         "/dashboard/apps/XYZ/app/foo/bar",
       );
     });
+    it("replaces dashboard url properly", () => {
+      const mockHistoryReplaceState = jest.fn();
+      jest
+        .spyOn(window.history, "replaceState")
+        .mockImplementation(mockHistoryReplaceState);
+
+      const {
+        result: {
+          current: { handle },
+        },
+      } = renderHook(() =>
+        AppActionsHandler.useHandleUpdateRoutingAction("XYZ"),
+      );
+
+      handle({
+        type: "updateRouting",
+        payload: {
+          actionId: "123",
+          newRoute: "/foo/bar",
+          replace: true,
+        },
+      });
+
+      expect(mockHistoryReplaceState).toHaveBeenCalledTimes(1);
+      expect(mockHistoryReplaceState).toHaveBeenCalledWith(
+        null,
+        "",
+        "/dashboard/apps/XYZ/app/foo/bar",
+      );
+    });
   });
   describe("useHandleRedirectAction", () => {
     describe("Open in the new browser context", () => {
diff --git a/src/apps/components/AppFrame/appActionsHandler.ts b/src/apps/components/AppFrame/appActionsHandler.ts
index aeccff443c0..d0f165a4722 100644
--- a/src/apps/components/AppFrame/appActionsHandler.ts
+++ b/src/apps/components/AppFrame/appActionsHandler.ts
@@ -157,12 +157,13 @@ const useHandleRedirectAction = (appId: string) => {
 
 const useHandleUpdateRoutingAction = (appId: string) => ({
   handle: (action: UpdateRouting) => {
-    const { newRoute, actionId } = action.payload;
+    const { newRoute, replace, actionId } = action.payload;
 
     debug(
-      `Handling UpdateRouting action with ID: %s and new route: %s`,
+      `Handling UpdateRouting action with ID: %s and new route: %s (replace=%s)`,
       actionId,
       newRoute,
+      replace,
     );
 
     const exactLocation = urlJoin(
@@ -173,7 +174,11 @@ const useHandleUpdateRoutingAction = (appId: string) => ({
 
     debug(`Update to new nested route:  %s`, exactLocation);
 
-    window.history.pushState(null, "", exactLocation);
+    if (replace) {
+      window.history.replaceState(null, "", exactLocation);
+    } else {
+      window.history.pushState(null, "", exactLocation);
+    }
 
     return createResponseStatus(actionId, true);
   },