diff --git a/plugins/amazonq/chat/jetbrains-community/tst/software/aws/toolkits/jetbrains/services/amazonq/workspace/context/ProjectContextControllerTest.kt b/plugins/amazonq/chat/jetbrains-community/tst/software/aws/toolkits/jetbrains/services/amazonq/workspace/context/ProjectContextControllerTest.kt
new file mode 100644
index 00000000000..385d269bee9
--- /dev/null
+++ b/plugins/amazonq/chat/jetbrains-community/tst/software/aws/toolkits/jetbrains/services/amazonq/workspace/context/ProjectContextControllerTest.kt
@@ -0,0 +1,79 @@
+// Copyright 2024 Amazon.com, Inc. or its affiliates. All Rights Reserved.
+// SPDX-License-Identifier: Apache-2.0
+
+package software.aws.toolkits.jetbrains.services.amazonq.workspace.context
+
+import com.intellij.openapi.Disposable
+import com.intellij.openapi.application.ApplicationManager
+import com.intellij.openapi.project.Project
+import com.intellij.testFramework.ProjectExtension
+import com.intellij.testFramework.junit5.TestDisposable
+import com.intellij.testFramework.replaceService
+import kotlinx.coroutines.CoroutineScope
+import kotlinx.coroutines.test.runTest
+import org.assertj.core.api.Assertions.assertThat
+import org.junit.jupiter.api.Test
+import org.junit.jupiter.api.extension.RegisterExtension
+import org.mockito.Mockito.mockConstruction
+import org.mockito.kotlin.doReturn
+import org.mockito.kotlin.mock
+import org.mockito.kotlin.times
+import org.mockito.kotlin.verify
+import software.aws.toolkits.jetbrains.core.coroutines.getCoroutineBgContext
+import software.aws.toolkits.jetbrains.services.amazonq.project.EncoderServer
+import software.aws.toolkits.jetbrains.services.amazonq.project.ProjectContextController
+import software.aws.toolkits.jetbrains.settings.CodeWhispererSettings
+
+class ProjectContextControllerTest {
+    lateinit var sut: ProjectContextController
+
+    val project: Project
+        get() = projectExtension.project
+
+    private companion object {
+        @JvmField
+        @RegisterExtension
+        val projectExtension = ProjectExtension()
+    }
+
+    @Test
+    fun `should start encoderServer if chat project context is disabled`(@TestDisposable disposable: Disposable) = runTest {
+        ApplicationManager.getApplication()
+            .replaceService(
+                CodeWhispererSettings::class.java,
+                mock { on { isProjectContextEnabled() } doReturn false },
+                disposable
+            )
+
+        assertEncoderServerStarted()
+    }
+
+    @Test
+    fun `should start encoderServer if chat project context is enabled`(@TestDisposable disposable: Disposable) = runTest {
+        ApplicationManager.getApplication()
+            .replaceService(
+                CodeWhispererSettings::class.java,
+                mock { on { isProjectContextEnabled() } doReturn true },
+                disposable
+            )
+
+        assertEncoderServerStarted()
+    }
+
+    private fun assertEncoderServerStarted() = runTest {
+        mockConstruction(EncoderServer::class.java).use {
+            // TODO: figure out how to make this testScope work
+//            val cs = TestScope(context = StandardTestDispatcher()) // not works and the test never finish
+            val cs = CoroutineScope(getCoroutineBgContext()) // works
+
+            assertThat(it.constructed()).isEmpty()
+            sut = ProjectContextController(project, cs)
+            assertThat(it.constructed()).hasSize(1)
+
+//            cs.advanceUntilIdle()
+            sut.initJob.join()
+            val encoderServer = it.constructed().first()
+            verify(encoderServer, times(1)).downloadArtifactsAndStartServer()
+        }
+    }
+}
diff --git a/plugins/amazonq/shared/jetbrains-community/src/software/aws/toolkits/jetbrains/services/amazonq/project/ProjectContextController.kt b/plugins/amazonq/shared/jetbrains-community/src/software/aws/toolkits/jetbrains/services/amazonq/project/ProjectContextController.kt
index 2169a5bbad6..aeaabff547a 100644
--- a/plugins/amazonq/shared/jetbrains-community/src/software/aws/toolkits/jetbrains/services/amazonq/project/ProjectContextController.kt
+++ b/plugins/amazonq/shared/jetbrains-community/src/software/aws/toolkits/jetbrains/services/amazonq/project/ProjectContextController.kt
@@ -9,21 +9,19 @@ import com.intellij.openapi.components.service
 import com.intellij.openapi.project.Project
 import com.intellij.openapi.util.Disposer
 import kotlinx.coroutines.CoroutineScope
+import kotlinx.coroutines.Job
 import kotlinx.coroutines.launch
 import software.aws.toolkits.core.utils.getLogger
 import software.aws.toolkits.core.utils.warn
-import software.aws.toolkits.jetbrains.settings.CodeWhispererSettings
 
 @Service(Service.Level.PROJECT)
 class ProjectContextController(private val project: Project, private val cs: CoroutineScope) : Disposable {
+    // TODO: Ideally we should inject dependencies via constructor for easier testing, refer to how [TelemetryService] inject publisher and batcher
     private val encoderServer: EncoderServer = EncoderServer(project)
     private val projectContextProvider: ProjectContextProvider = ProjectContextProvider(project, encoderServer, cs)
-    init {
-        cs.launch {
-            if (CodeWhispererSettings.getInstance().isProjectContextEnabled()) {
-                encoderServer.downloadArtifactsAndStartServer()
-            }
-        }
+
+    val initJob: Job = cs.launch {
+        encoderServer.downloadArtifactsAndStartServer()
     }
 
     fun getProjectContextIndexComplete() = projectContextProvider.isIndexComplete.get()