diff --git a/docs/release-notes/release-notes-0.18.0.md b/docs/release-notes/release-notes-0.18.0.md
index b3a388052..4fcda2e4e 100644
--- a/docs/release-notes/release-notes-0.18.0.md
+++ b/docs/release-notes/release-notes-0.18.0.md
@@ -49,7 +49,7 @@
   same exclusive group](https://github.com/lightningnetwork/lnd/pull/7800).
   When using neutrino as a backend unconfirmed transactions have to be
   removed from the wallet when a conflicting tx is confirmed. For other backends
-  these unconfirmed transactions are already removed. In addition a new 
+  these unconfirmed transactions are already removed. In addition, a new 
   walletrpc endpoint `RemoveTransaction` is introduced which let one easily
   remove unconfirmed transaction manually.
   
@@ -61,6 +61,9 @@
   this buffer which can be used to increase the commitment fee and it also
   protects against the case where htlcs are added asynchronously resulting in
   stuck channels.
+ 
+* [Fixed](https://github.com/lightningnetwork/lnd/pull/8377) a watchtower client
+  test flake that prevented new tasks from overflowing to disk. 
 
 * [Properly handle un-acked updates for exhausted watchtower 
   sessions](https://github.com/lightningnetwork/lnd/pull/8233)
diff --git a/watchtower/wtclient/queue.go b/watchtower/wtclient/queue.go
index 7f61336b7..f2e660457 100644
--- a/watchtower/wtclient/queue.go
+++ b/watchtower/wtclient/queue.go
@@ -529,6 +529,13 @@ func (q *DiskOverflowQueue[T]) feedMemQueue() {
 				}
 			}
 
+			// If we did manage to fetch a task from disk, we make
+			// sure to set the toDisk mode to true since we may
+			// block indefinitely while trying to push the tasks to
+			// the memQueue in which case we want the drainInputList
+			// goroutine to write any new tasks to disk.
+			q.toDisk.Store(true)
+
 			for i, task := range tasks {
 				select {
 				case q.memQueue <- task:
diff --git a/watchtower/wtclient/queue_test.go b/watchtower/wtclient/queue_test.go
index 7adb5a9bf..e87ca1480 100644
--- a/watchtower/wtclient/queue_test.go
+++ b/watchtower/wtclient/queue_test.go
@@ -75,9 +75,9 @@ func TestDiskOverflowQueue(t *testing.T) {
 	}
 }
 
-// demoFlake is a temporary test demonstrating race condition that currently
-// exists in the DiskOverflowQueue. It contrives a scenario that results in
-// the queue being in memory mode when it really should be in disk mode.
+// demoFlake is a temporary test demonstrating the fix of a race condition that
+// existed in the DiskOverflowQueue. It contrives a scenario that once resulted
+// in the queue being in memory mode when it really should be in disk mode.
 func demoFlake(t *testing.T, db wtdb.Queue[*wtdb.BackupID]) {
 	// Generate some backup IDs that we want to add to the queue.
 	tasks := genBackupIDs(10)
@@ -147,21 +147,25 @@ func demoFlake(t *testing.T, db wtdb.Queue[*wtdb.BackupID]) {
 	}, waitTime)
 	require.NoError(t, err)
 
-	// Now, we allow task 4 to be written to disk. NOTE that this is
-	// happening while the mode is memory mode! This is the bug! This will
-	// result in a newDiskItemsSignal being sent meaning that feedMemQueue
-	// will read from disk and block on pushing the new item to memQueue.
+	// Now, we allow task 4 to be written to disk. This will result in a
+	// newDiskItemsSignal being sent meaning that feedMemQueue will read
+	// from disk and block on pushing the new item to memQueue.
 	q.allowDiskWrite()
 
-	// Now, if we enqueue task 5, it will _not_ be written to disk since the
-	// queue is currently in memory mode. This is the bug that needs to be
-	// fixed.
+	// The above will result in feeMemQueue switching the mode to disk-mode.
+	err = wait.Predicate(func() bool {
+		return q.toDisk.Load()
+	}, waitTime)
+	require.NoError(t, err)
+
+	// Now, if we enqueue task 5, it _will_ be written to disk since the
+	// queue is currently in disk mode.
 	enqueue(t, q, tasks[5])
 	q.allowDiskWrite()
 
-	// Show that there are no items on disk at this point. When the bug is
-	// fixed, this should be changed to 1.
-	waitForNumDisk(t, db, 0)
+	// Show that there is an item on disk at this point. This demonstrates
+	// that the bug has been fixed.
+	waitForNumDisk(t, db, 1)
 
 	require.NoError(t, q.Stop())
 }