diff --git a/shell/assets/translations/en-us.yaml b/shell/assets/translations/en-us.yaml
index ccd59accf52..2e026d8a0bb 100644
--- a/shell/assets/translations/en-us.yaml
+++ b/shell/assets/translations/en-us.yaml
@@ -4620,6 +4620,7 @@ moveModal:
   description: 'You are moving the following namespaces:'
   moveButtonLabel: Move
   targetProject: Target Project
+  noProject: None (remove from any project)
 
 nameNsDescription:
   name:
diff --git a/shell/dialog/MoveNamespaceDialog.vue b/shell/dialog/MoveNamespaceDialog.vue
index e5aca4d0086..5d6048f0685 100644
--- a/shell/dialog/MoveNamespaceDialog.vue
+++ b/shell/dialog/MoveNamespaceDialog.vue
@@ -6,6 +6,8 @@ import LabeledSelect from '@shell/components/form/LabeledSelect';
 import { MANAGEMENT } from '@shell/config/types';
 import { PROJECT } from '@shell/config/labels-annotations';
 
+const NONE_VALUE = ' ';
+
 export default {
   emits: ['close'],
 
@@ -48,8 +50,12 @@ export default {
       return this.toMove.filter((namespace) => !!namespace.project).map((namespace) => namespace.project.shortId);
     },
 
+    isAllInProject() {
+      return this.toMove.every((namespace) => !!namespace.project);
+    },
+
     projectOptions() {
-      return this.projects.reduce((inCluster, project) => {
+      const options = this.projects.reduce((inCluster, project) => {
         if (!this.excludedProjects.includes(project.shortId) && project.spec?.clusterName === this.currentCluster.id) {
           inCluster.push({
             value: project.shortId,
@@ -59,6 +65,16 @@ export default {
 
         return inCluster;
       }, []);
+
+      // To be consistent with listed projects we should only provide the option if it applies too all of the namespaces
+      if (this.isAllInProject) {
+        options.unshift({
+          value: NONE_VALUE,
+          label: this.t('moveModal.noProject')
+        });
+      }
+
+      return options;
     }
   },
 
@@ -69,10 +85,10 @@ export default {
 
     async move(finish) {
       const cluster = this.$store.getters['currentCluster'];
-      const clusterWithProjectId = `${ cluster.id }:${ this.targetProject }`;
+      const clusterWithProjectId = this.targetProject && this.targetProject !== NONE_VALUE ? `${ cluster.id }:${ this.targetProject }` : null;
 
       const promises = this.toMove.map((namespace) => {
-        namespace.setLabel(PROJECT, this.targetProject);
+        namespace.setLabel(PROJECT, this.targetProject && this.targetProject !== NONE_VALUE ? this.targetProject : null);
         namespace.setAnnotation(PROJECT, clusterWithProjectId);
 
         return namespace.save();
@@ -128,7 +144,7 @@ export default {
       <AsyncButton
         :action-label="t('moveModal.moveButtonLabel')"
         class="btn bg-primary ml-10"
-        :disabled="!targetProject"
+        :disabled="targetProject === null"
         @click="move"
       />
     </template>
diff --git a/shell/dialog/__tests__/MoveNamespaceDialog.test.ts b/shell/dialog/__tests__/MoveNamespaceDialog.test.ts
new file mode 100644
index 00000000000..2373bf0dd4c
--- /dev/null
+++ b/shell/dialog/__tests__/MoveNamespaceDialog.test.ts
@@ -0,0 +1,249 @@
+import { shallowMount, VueWrapper } from '@vue/test-utils';
+import MoveNamespaceDialog from '@shell/dialog/MoveNamespaceDialog.vue';
+
+const t = (key: string): string => key;
+const NONE_VALUE = ' ';
+
+describe('component: MoveNamespaceDialog', () => {
+  let wrapper: VueWrapper<any>;
+
+  const mockProjects = [
+    {
+      shortId:     'p-abc123',
+      nameDisplay: 'Project A',
+      spec:        { clusterName: 'local' }
+    },
+    {
+      shortId:     'p-def456',
+      nameDisplay: 'Project B',
+      spec:        { clusterName: 'local' }
+    },
+    {
+      shortId:     'p-other',
+      nameDisplay: 'Other Cluster Project',
+      spec:        { clusterName: 'other-cluster' }
+    }
+  ];
+
+  const createMockNamespace = (projectId: string | null = null) => {
+    const namespace: any = {
+      nameDisplay:   'test-namespace',
+      projectId,
+      project:       projectId ? { shortId: projectId } : null,
+      setLabel:      jest.fn(),
+      setAnnotation: jest.fn(),
+      save:          jest.fn().mockResolvedValue({}),
+    };
+
+    return namespace;
+  };
+
+  const mountComponent = (propsData = {}, options = {}) => {
+    const store = {
+      dispatch: jest.fn().mockResolvedValue(mockProjects),
+      getters:  { currentCluster: { id: 'local' } }
+    };
+
+    const defaultProps = {
+      resources:                 [createMockNamespace('p-abc123')],
+      movingCb:                  jest.fn(),
+      registerBackgroundClosing: jest.fn(),
+    };
+
+    return shallowMount(MoveNamespaceDialog, {
+      propsData: {
+        ...defaultProps,
+        ...propsData,
+      },
+      global: {
+        mocks: {
+          $store: store,
+          t,
+        },
+      },
+      ...options,
+    });
+  };
+
+  afterEach(() => {
+    if (wrapper) {
+      wrapper.unmount();
+    }
+  });
+
+  describe('projectOptions', () => {
+    it('should include "None" option as first item', async() => {
+      wrapper = mountComponent();
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      const options = wrapper.vm.projectOptions;
+
+      expect(options[0]).toStrictEqual({
+        value: NONE_VALUE,
+        label: 'moveModal.noProject'
+      });
+    });
+
+    it('should include projects from current cluster', async() => {
+      // Use a namespace not in any project so no projects get excluded
+      const namespace = createMockNamespace(null);
+
+      wrapper = mountComponent({ resources: [namespace] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      const options = wrapper.vm.projectOptions;
+      const projectLabels = options.map((o: any) => o.label);
+
+      expect(projectLabels).toContain('Project A');
+      expect(projectLabels).toContain('Project B');
+    });
+
+    it('should exclude projects from other clusters', async() => {
+      wrapper = mountComponent();
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      const options = wrapper.vm.projectOptions;
+      const projectLabels = options.map((o: any) => o.label);
+
+      expect(projectLabels).not.toContain('Other Cluster Project');
+    });
+
+    it('should exclude current project of namespaces being moved', async() => {
+      const namespace = createMockNamespace('p-abc123');
+
+      wrapper = mountComponent({ resources: [namespace] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      const options = wrapper.vm.projectOptions;
+      const projectValues = options.map((o: any) => o.value);
+
+      expect(projectValues).not.toContain('p-abc123');
+      expect(projectValues).toContain('p-def456');
+    });
+
+    it('should NOT include "None" option when some namespaces are not in a project', async() => {
+      const namespaceInProject = createMockNamespace('p-abc123');
+      const namespaceNotInProject = createMockNamespace(null);
+
+      wrapper = mountComponent({ resources: [namespaceInProject, namespaceNotInProject] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      const options = wrapper.vm.projectOptions;
+      const optionValues = options.map((o: any) => o.value);
+
+      expect(optionValues).not.toContain(NONE_VALUE);
+    });
+
+    it('should NOT include "None" option when no namespaces are in a project', async() => {
+      const namespace = createMockNamespace(null);
+
+      wrapper = mountComponent({ resources: [namespace] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      const options = wrapper.vm.projectOptions;
+      const optionValues = options.map((o: any) => o.value);
+
+      expect(optionValues).not.toContain(NONE_VALUE);
+    });
+  });
+
+  describe('targetProject default value', () => {
+    it('should default to empty string (None option)', () => {
+      wrapper = mountComponent();
+
+      expect(wrapper.vm.targetProject).toBeNull();
+    });
+  });
+
+  describe('move button disabled state', () => {
+    it('should be enabled when targetProject is NONE_VALUE (None)', () => {
+      wrapper = mountComponent();
+      wrapper.vm.targetProject = NONE_VALUE;
+
+      // The button should be enabled when targetProject !== null
+      expect(wrapper.vm.targetProject === null).toBe(false);
+    });
+
+    it('should be enabled when targetProject is a project id', () => {
+      wrapper = mountComponent();
+      wrapper.vm.targetProject = 'p-def456';
+
+      expect(wrapper.vm.targetProject === null).toBe(false);
+    });
+  });
+
+  describe('move method', () => {
+    it('should clear labels and annotations when targetProject is NONE_VALUE (None)', async() => {
+      const namespace = createMockNamespace('p-abc123');
+
+      wrapper = mountComponent({ resources: [namespace] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      wrapper.vm.targetProject = NONE_VALUE;
+
+      const finish = jest.fn();
+
+      await wrapper.vm.move(finish);
+
+      expect(namespace.setLabel).toHaveBeenCalledWith('field.cattle.io/projectId', null);
+      expect(namespace.setAnnotation).toHaveBeenCalledWith('field.cattle.io/projectId', null);
+      expect(namespace.save).toHaveBeenCalledWith();
+      expect(finish).toHaveBeenCalledWith(true);
+    });
+
+    it('should set labels and annotations when moving to a project', async() => {
+      const namespace = createMockNamespace('p-abc123');
+
+      wrapper = mountComponent({ resources: [namespace] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      wrapper.vm.targetProject = 'p-def456';
+
+      const finish = jest.fn();
+
+      await wrapper.vm.move(finish);
+
+      expect(namespace.setLabel).toHaveBeenCalledWith('field.cattle.io/projectId', 'p-def456');
+      expect(namespace.setAnnotation).toHaveBeenCalledWith('field.cattle.io/projectId', 'local:p-def456');
+      expect(namespace.save).toHaveBeenCalledWith();
+      expect(finish).toHaveBeenCalledWith(true);
+    });
+
+    it('should handle multiple namespaces', async() => {
+      const namespace1 = createMockNamespace('p-abc123');
+      const namespace2 = createMockNamespace('p-abc123');
+
+      wrapper = mountComponent({ resources: [namespace1, namespace2] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      wrapper.vm.targetProject = NONE_VALUE;
+
+      const finish = jest.fn();
+
+      await wrapper.vm.move(finish);
+
+      expect(namespace1.setLabel).toHaveBeenCalledWith('field.cattle.io/projectId', null);
+      expect(namespace1.setAnnotation).toHaveBeenCalledWith('field.cattle.io/projectId', null);
+      expect(namespace2.setLabel).toHaveBeenCalledWith('field.cattle.io/projectId', null);
+      expect(namespace2.setAnnotation).toHaveBeenCalledWith('field.cattle.io/projectId', null);
+      expect(namespace1.save).toHaveBeenCalledWith();
+      expect(namespace2.save).toHaveBeenCalledWith();
+    });
+
+    it('should call finish with false when save fails', async() => {
+      const namespace = createMockNamespace('p-abc123');
+
+      jest.spyOn(namespace, 'save').mockImplementation().mockRejectedValue(new Error('Save failed'));
+      wrapper = mountComponent({ resources: [namespace] });
+      await wrapper.vm.$options.fetch.call(wrapper.vm);
+
+      wrapper.vm.targetProject = NONE_VALUE;
+
+      const finish = jest.fn();
+
+      await wrapper.vm.move(finish);
+
+      expect(finish).toHaveBeenCalledWith(false);
+    });
+  });
+});