diff --git a/MIGRATION.md b/MIGRATION.md
index 58b42f10c0aa..28b4bc5d6ddc 100644
--- a/MIGRATION.md
+++ b/MIGRATION.md
@@ -1,6 +1,7 @@
 <h1>Migration</h1>
 
 - [From version 8.4.x to 8.5.x](#from-version-84x-to-85x)
+  - [Added source code panel to docs](#added-source-code-panel-to-docs)
   - [Addon-a11y: Component test integration](#addon-a11y-component-test-integration)
   - [Addon-a11y: Deprecated `parameters.a11y.manual`](#addon-a11y-deprecated-parametersa11ymanual)
   - [Indexing behavior of @storybook/experimental-addon-test is changed](#indexing-behavior-of-storybookexperimental-addon-test-is-changed)
@@ -425,6 +426,22 @@
 
 ## From version 8.4.x to 8.5.x
 
+### Added source code panel to docs
+
+Starting in 8.5, Storybook Docs (`@storybook/addon-docs`) automatically adds a new addon panel to stories that displays a source snippet beneath each story. This works similarly to the existing [source snippet doc block](https://storybook.js.org/docs/writing-docs/doc-blocks#source), but in the story view. It is intended to replace the [Storysource addon](https://storybook.js.org/addons/@storybook/addon-storysource).
+
+If you wish to disable this panel globally, add the following line to your `.storybook/preview.js` project configuration. You can also selectively disable/enable at the story level.
+
+```js
+export default {
+  parameters: {
+    docs: {
+      codePanel: false,
+    },
+  },
+};
+```
+
 ### Addon-a11y: Component test integration
 
 In Storybook 8.4, we introduced the [Test addon](https://storybook.js.org/docs/writing-tests/test-addon) (`@storybook/experimental-addon-test`). Powered by Vitest under the hood, this addon lets you watch, run, and debug your component tests directly in Storybook.
diff --git a/code/addons/docs/package.json b/code/addons/docs/package.json
index e515eb363746..85ad01ecc334 100644
--- a/code/addons/docs/package.json
+++ b/code/addons/docs/package.json
@@ -71,7 +71,12 @@
     "./angular": "./angular/index.js",
     "./angular/index.js": "./angular/index.js",
     "./web-components/index.js": "./web-components/index.js",
-    "./package.json": "./package.json"
+    "./package.json": "./package.json",
+    "./manager": {
+      "types": "./dist/manager.d.ts",
+      "import": "./dist/manager.mjs",
+      "require": "./dist/manager.js"
+    }
   },
   "main": "dist/index.js",
   "module": "dist/index.mjs",
@@ -129,7 +134,11 @@
       "./src/preview.ts",
       "./src/blocks.ts",
       "./src/shims/mdx-react-shim.ts",
-      "./src/mdx-loader.ts"
+      "./src/mdx-loader.ts",
+      "./src/manager.tsx"
+    ],
+    "managerEntries": [
+      "./src/manager.tsx"
     ]
   },
   "gitHead": "e6a7fd8a655c69780bc20b9749c2699e44beae16",
diff --git a/code/addons/docs/src/manager.tsx b/code/addons/docs/src/manager.tsx
new file mode 100644
index 000000000000..0b84cd6e36f8
--- /dev/null
+++ b/code/addons/docs/src/manager.tsx
@@ -0,0 +1,57 @@
+import React from 'react';
+
+import { AddonPanel, type SyntaxHighlighterFormatTypes } from 'storybook/internal/components';
+import { ADDON_ID, PANEL_ID, PARAM_KEY, SNIPPET_RENDERED } from 'storybook/internal/docs-tools';
+import { addons, types, useAddonState, useChannel } from 'storybook/internal/manager-api';
+
+import { Source } from '@storybook/blocks';
+
+addons.register(ADDON_ID, (api) => {
+  addons.add(PANEL_ID, {
+    title: 'Code',
+    type: types.PANEL,
+    paramKey: PARAM_KEY,
+    /**
+     * This code panel can be disabled by the user by adding this parameter:
+     *
+     * @example
+     *
+     * ```ts
+     *  parameters: {
+     *    docs: {
+     *      codePanel: false,
+     *    },
+     *  },
+     * ```
+     */
+    disabled: (parameters) => {
+      return (
+        !!parameters &&
+        typeof parameters[PARAM_KEY] === 'object' &&
+        parameters[PARAM_KEY].codePanel === false
+      );
+    },
+    match: ({ viewMode }) => viewMode === 'story',
+    render: ({ active }) => {
+      const [codeSnippet, setSourceCode] = useAddonState<{
+        source: string;
+        format: SyntaxHighlighterFormatTypes;
+      }>(ADDON_ID, {
+        source: '',
+        format: 'html',
+      });
+
+      useChannel({
+        [SNIPPET_RENDERED]: ({ source, format }) => {
+          setSourceCode({ source, format });
+        },
+      });
+
+      return (
+        <AddonPanel active={!!active}>
+          <Source code={codeSnippet.source} format={codeSnippet.format} dark />
+        </AddonPanel>
+      );
+    },
+  });
+});
diff --git a/code/addons/docs/template/stories/sourcePanel/index.stories.tsx b/code/addons/docs/template/stories/sourcePanel/index.stories.tsx
new file mode 100644
index 000000000000..9958096cb815
--- /dev/null
+++ b/code/addons/docs/template/stories/sourcePanel/index.stories.tsx
@@ -0,0 +1,23 @@
+export default {
+  component: globalThis.Components.Button,
+  tags: ['autodocs'],
+  parameters: {
+    chromatic: { disable: true },
+    docs: {
+      codePanel: false,
+    },
+  },
+};
+
+export const One = { args: { label: 'One' } };
+
+export const Two = { args: { label: 'Two' } };
+
+export const WithSource = {
+  args: { label: 'Three' },
+  parameters: {
+    docs: {
+      codePanel: true,
+    },
+  },
+};
diff --git a/code/addons/essentials/package.json b/code/addons/essentials/package.json
index a8b609df935b..8946fc941275 100644
--- a/code/addons/essentials/package.json
+++ b/code/addons/essentials/package.json
@@ -40,6 +40,7 @@
     },
     "./backgrounds/manager": "./dist/backgrounds/manager.js",
     "./controls/manager": "./dist/controls/manager.js",
+    "./docs/manager": "./dist/docs/manager.js",
     "./docs/preview": {
       "types": "./dist/docs/preview.d.ts",
       "import": "./dist/docs/preview.mjs",
@@ -114,10 +115,14 @@
       "./src/docs/preset.ts",
       "./src/docs/mdx-react-shim.ts"
     ],
+    "entries": [
+      "./src/docs/manager.ts"
+    ],
     "managerEntries": [
       "./src/actions/manager.ts",
       "./src/backgrounds/manager.ts",
       "./src/controls/manager.ts",
+      "./src/docs/manager.ts",
       "./src/measure/manager.ts",
       "./src/outline/manager.ts",
       "./src/toolbars/manager.ts",
diff --git a/code/addons/essentials/src/docs/manager.ts b/code/addons/essentials/src/docs/manager.ts
new file mode 100644
index 000000000000..6101f7d79261
--- /dev/null
+++ b/code/addons/essentials/src/docs/manager.ts
@@ -0,0 +1,2 @@
+// @ts-expect-error (no types needed for this)
+export * from '@storybook/addon-docs/manager';
diff --git a/code/addons/essentials/src/index.ts b/code/addons/essentials/src/index.ts
index 5809420bc1b8..a72554227ba2 100644
--- a/code/addons/essentials/src/index.ts
+++ b/code/addons/essentials/src/index.ts
@@ -88,9 +88,9 @@ export function addons(options: PresetOptions) {
 
   // NOTE: The order of these addons is important.
   return [
-    'docs',
     'controls',
     'actions',
+    'docs',
     'backgrounds',
     'viewport',
     'toolbars',
diff --git a/code/core/src/manager/components/preview/Toolbar.tsx b/code/core/src/manager/components/preview/Toolbar.tsx
index 5dd460e80e69..05385487a804 100644
--- a/code/core/src/manager/components/preview/Toolbar.tsx
+++ b/code/core/src/manager/components/preview/Toolbar.tsx
@@ -92,7 +92,7 @@ export const createTabsTool = (tabs: Addon_BaseType[]): Addon_BaseType => ({
                 const isActive = rp.path.includes(`tab=${tab.id}`);
                 return (
                   <TabButton
-                    disabled={tab.disabled}
+                    disabled={!!tab.disabled}
                     active={isActive}
                     onClick={() => {
                       rp.applyQueryParams({ tab: tabIdToApply });
@@ -146,7 +146,7 @@ export const ToolbarComp = React.memo<ToolData>(function ToolbarComp({
                 {tabs.map((tab, index) => {
                   return (
                     <TabButton
-                      disabled={tab.disabled}
+                      disabled={!!tab.disabled}
                       active={tab.id === tabId || (tab.id === 'canvas' && !tabId)}
                       onClick={() => {
                         api.applyQueryParams({ tab: tab.id === 'canvas' ? undefined : tab.id });
diff --git a/code/core/src/manager/container/Panel.tsx b/code/core/src/manager/container/Panel.tsx
index c81e489d8f68..f8cc2877cef0 100644
--- a/code/core/src/manager/container/Panel.tsx
+++ b/code/core/src/manager/container/Panel.tsx
@@ -32,6 +32,12 @@ const getPanels = (api: API) => {
     if (paramKey && parameters && parameters[paramKey] && parameters[paramKey].disable) {
       return;
     }
+    if (
+      panel.disabled === true ||
+      (typeof panel.disabled === 'function' && panel.disabled(parameters))
+    ) {
+      return;
+    }
     filteredPanels[id] = panel;
   });
 
diff --git a/code/core/src/types/modules/addons.ts b/code/core/src/types/modules/addons.ts
index 47f5aec6412b..b2c7b4ac2f3c 100644
--- a/code/core/src/types/modules/addons.ts
+++ b/code/core/src/types/modules/addons.ts
@@ -5,7 +5,7 @@ import type { TestProviderConfig, TestingModuleProgressReportProgress } from '..
 import type { RenderData as RouterData } from '../../router/types';
 import type { ThemeVars } from '../../theming/types';
 import type { API_SidebarOptions } from './api';
-import type { API_HashEntry, API_StatusState, API_StatusUpdate } from './api-stories';
+import type { API_HashEntry, API_StoryEntry } from './api-stories';
 import type {
   Args,
   ArgsStoryFn as ArgsStoryFnForFramework,
@@ -392,7 +392,7 @@ export interface Addon_BaseType {
   /** @unstable */
   paramKey?: string;
   /** @unstable */
-  disabled?: boolean;
+  disabled?: boolean | ((parameters: API_StoryEntry['parameters']) => boolean);
   /** @unstable */
   hidden?: boolean;
 }
diff --git a/code/renderers/vue3/src/docs/sourceDecorator.ts b/code/renderers/vue3/src/docs/sourceDecorator.ts
index 7eb8734305af..cc2f922f63f1 100644
--- a/code/renderers/vue3/src/docs/sourceDecorator.ts
+++ b/code/renderers/vue3/src/docs/sourceDecorator.ts
@@ -107,7 +107,6 @@ ${template}`;
  * Checks if the source code generation should be skipped for the given Story context. Will be true
  * if one of the following is true:
  *
- * - View mode is not "docs"
  * - Story is no arg story
  * - Story has set custom source code via parameters.docs.source.code
  * - Story has set source type to "code" via parameters.docs.source.type
@@ -120,13 +119,10 @@ export const shouldSkipSourceCodeGeneration = (context: StoryContext): boolean =
   }
 
   const isArgsStory = context?.parameters.__isArgsStory;
-  const isDocsViewMode = context?.viewMode === 'docs';
 
   // never render if the user is forcing the block to render code, or
   // if the user provides code, or if it's not an args story.
-  return (
-    !isDocsViewMode || !isArgsStory || sourceParams?.code || sourceParams?.type === SourceType.CODE
-  );
+  return !isArgsStory || sourceParams?.code || sourceParams?.type === SourceType.CODE;
 };
 
 /**