diff --git a/python/test/test_api.py b/python/test/test_api.py
index 75ca9391e..93124c470 100644
--- a/python/test/test_api.py
+++ b/python/test/test_api.py
@@ -345,11 +345,6 @@ def test_ready(self):
         server = tritonserver.Server(self._server_options).start()
         self.assertTrue(server.ready())
 
-    @pytest.mark.xfail(
-        tritonserver.__version__ <= "2.48.0",
-        reason="Known issue on stop: Exit timeout expired. Exiting immediately",
-        raises=tritonserver.InternalError,
-    )
     def test_stop(self):
         server = tritonserver.Server(self._server_options).start(wait_until_ready=True)
 
diff --git a/python/tritonserver/_c/tritonserver_pybind.cc b/python/tritonserver/_c/tritonserver_pybind.cc
index 127bb15b8..6017b3d7e 100644
--- a/python/tritonserver/_c/tritonserver_pybind.cc
+++ b/python/tritonserver/_c/tritonserver_pybind.cc
@@ -1,4 +1,4 @@
-// Copyright 2023, NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+// Copyright 2023-2024, NVIDIA CORPORATION & AFFILIATES. All rights reserved.
 //
 // Redistribution and use in source and binary forms, with or without
 // modification, are permitted provided that the following conditions
@@ -1434,7 +1434,18 @@ class PyServer : public PyWrapper<struct TRITONSERVER_Server> {
     owned_ = true;
   }
 
-  void Stop() const { ThrowIfError(TRITONSERVER_ServerStop(triton_object_)); }
+  void Stop() const
+  {
+    // ServerStop is blocking for the duration of the server exit timeout, so
+    // ensure to release the GIL. This can allow request release callbacks
+    // to be interleaved while server is waiting for live requests/models
+    // to complete. Without releasing GIL, this function may acquire the GIL
+    // first and block the Triton request from being released/freed, thus
+    // blocking the server's shutdown in a circular manner thinking a model is
+    // still alive.
+    py::gil_scoped_release release;
+    ThrowIfError(TRITONSERVER_ServerStop(triton_object_));
+  }
 
   void RegisterModelRepository(
       const std::string& repository_path,