diff --git a/arch/arm/core/cortex_m/pm_s2ram.S b/arch/arm/core/cortex_m/pm_s2ram.S
index d15bfea0432..1722e32136e 100644
--- a/arch/arm/core/cortex_m/pm_s2ram.S
+++ b/arch/arm/core/cortex_m/pm_s2ram.S
@@ -178,9 +178,7 @@ SECTION_FUNC(TEXT, arch_pm_s2ram_suspend)
 	/*
 	 * Mark entering suspend to RAM.
 	 */
-	mov 	r1, lr
-	bl 	pm_s2ram_mark_set
-	mov	lr, r1
+	bl pm_s2ram_mark_set
 
 	/*
 	 * Call the system_off function passed as parameter. This should never
@@ -199,9 +197,7 @@ SECTION_FUNC(TEXT, arch_pm_s2ram_suspend)
 	/*
 	 * Reset the marking of suspend to RAM, return is ignored.
 	 */
-	mov 	r1, lr
-	bl	pm_s2ram_mark_check_and_clear
-	mov 	lr, r1
+	bl pm_s2ram_mark_check_and_clear
 
 	/* Move the stored return value of system_off back to r0,
 	 * setting it as return value for this function.
@@ -216,13 +212,16 @@ GTEXT(arch_pm_s2ram_resume)
 SECTION_FUNC(TEXT, arch_pm_s2ram_resume)
 	/*
 	 * Check if reset occurred after suspending to RAM.
+	 * Store LR to ensure we can continue boot when we are not suspended
+	 * to RAM. In addition to LR, R0 is pushed too, to ensure "SP mod 8 = 0",
+	 * as stated by ARM rule 6.2.1.2 for AAPCS32.
 	 */
-	mov 	r1, lr
-	bl 	pm_s2ram_mark_check_and_clear
-	mov 	lr, r1
-	cmp     r0, #0x1
-	beq     resume
-	bx      lr
+	push    {r0, lr}
+	bl      pm_s2ram_mark_check_and_clear
+	cmp	r0, #0x1
+	pop     {r0, lr}
+	beq	resume
+	bx	lr
 
 resume:
 	/*
diff --git a/arch/arm/core/cortex_m/pm_s2ram.c b/arch/arm/core/cortex_m/pm_s2ram.c
index b7fe5d9b626..2657d48dc32 100644
--- a/arch/arm/core/cortex_m/pm_s2ram.c
+++ b/arch/arm/core/cortex_m/pm_s2ram.c
@@ -22,44 +22,20 @@ __noinit _cpu_context_t _cpu_context;
  */
 static __noinit uint32_t marker;
 
-void __attribute__((naked)) pm_s2ram_mark_set(void)
+void pm_s2ram_mark_set(void)
 {
-	__asm__ volatile(
-		/* Set the marker to MAGIC value */
-		"str	%[_magic_val], [%[_marker]]\n"
-
-		"bx	lr\n"
-		:
-		: [_magic_val] "r"(MAGIC), [_marker] "r"(&marker)
-		: "r1", "r4", "memory");
+	marker = MAGIC;
 }
 
-bool __attribute__((naked)) pm_s2ram_mark_check_and_clear(void)
+bool pm_s2ram_mark_check_and_clear(void)
 {
-	__asm__ volatile(
-		/* Set return value to 0 */
-		"mov	r0, #0\n"
-
-		/* Check the marker */
-		"ldr	r3, [%[_marker]]\n"
-		"cmp	r3, %[_magic_val]\n"
-		"bne	exit\n"
-
-		/*
-		 * Reset the marker
-		 */
-		"str	r0, [%[_marker]]\n"
+	if (marker == MAGIC) {
+		marker = 0;
 
-		/*
-		 * Set return value to 1
-		 */
-		"mov	r0, #1\n"
+		return true;
+	}
 
-		"exit:\n"
-		"bx lr\n"
-		:
-		: [_magic_val] "r"(MAGIC), [_marker] "r"(&marker)
-		: "r0", "r1", "r3", "r4", "memory");
+	return false;
 }
 
 #endif /* CONFIG_PM_S2RAM_CUSTOM_MARKING */
diff --git a/arch/arm/core/cortex_m/reset.S b/arch/arm/core/cortex_m/reset.S
index bc75ccfceaa..c3f9362eca8 100644
--- a/arch/arm/core/cortex_m/reset.S
+++ b/arch/arm/core/cortex_m/reset.S
@@ -21,6 +21,7 @@ _ASM_FILE_PROLOGUE
 GTEXT(z_arm_reset)
 GTEXT(z_early_memset)
 GDATA(z_interrupt_stacks)
+GDATA(z_main_stack)
 #if defined(CONFIG_DEBUG_THREAD_INFO)
 GDATA(z_sys_post_kernel)
 #endif
@@ -29,7 +30,6 @@ GTEXT(soc_reset_hook)
 #endif
 #if defined(CONFIG_INIT_ARCH_HW_AT_BOOT)
 GTEXT(z_arm_init_arch_hw_at_boot)
-GDATA(z_main_stack)
 #endif
 #if defined(CONFIG_PM_S2RAM)
 GTEXT(arch_pm_s2ram_resume)
@@ -68,13 +68,6 @@ SECTION_SUBSEC_FUNC(TEXT,_reset_section,z_arm_reset)
  */
 SECTION_SUBSEC_FUNC(TEXT,_reset_section,__start)
 
-#if defined(CONFIG_DEBUG_THREAD_INFO)
-    /* Clear z_sys_post_kernel flag for RTOS aware debuggers */
-    movs.n r0, #0
-    ldr r1, =z_sys_post_kernel
-    strb r0, [r1]
-#endif /* CONFIG_DEBUG_THREAD_INFO */
-
 #if defined(CONFIG_INIT_ARCH_HW_AT_BOOT)
     /* Reset CONTROL register */
     movs.n r0, #0
@@ -90,9 +83,56 @@ SECTION_SUBSEC_FUNC(TEXT,_reset_section,__start)
 #endif /* CONFIG_INIT_ARCH_HW_AT_BOOT */
 
 #if defined(CONFIG_PM_S2RAM)
+    /*
+     * Temporarily set MSP to interrupt stack so that arch_pm_s2ram_resume can
+     * use stack for calling pm_s2ram_mark_check_and_clear.
+     * This is safe because suspend never being called from an ISR ensures that
+     * interrupt stack was not live during suspend.
+     * Note:
+     * if resuming from suspend, MSP is restored from cpu context
+     * if not resuming, MSP will be set back to z_main_stack for proper init
+     * And, apart from arch_pm_s2ram_resume being able to use the stack for
+     * a short while, there is no change in behavior in either of the paths.
+     */
+    ldr r0, =z_interrupt_stacks + CONFIG_ISR_STACK_SIZE + MPU_GUARD_ALIGN_AND_SIZE
+    msr msp, r0
+
     bl arch_pm_s2ram_resume
 #endif /* CONFIG_PM_S2RAM */
 
+    /*
+     * MSP needs to be set to main stack for following scenarios:
+     * - If CONFIG_PM_S2RAM is enabled, MSP is set to z_interrupt_stacks
+     *   for resume functions to make use of a stack. However,
+     *   if the device was not suspended and if resume functions return,
+     *   MSP needs to be set back to z_main_stack to ensure proper
+     *   initialization.
+     * - If CONFIG_PM_S2RAM is not enabled but CONFIG_INIT_ARCH_HW_AT_BOOT is,
+     *   MSP needs to be set to z_main_stack for proper initialization in case
+     *   device was loaded through chain loading or a debugger, as the initial
+     *   value of MSP would be anything that the previous image loaded.
+     * - If CONFIG_INIT_STACKS is enabled, we need to ensure MSP is not set
+     *   to z_interrupt_stacks, so we set it to z_main_stack.
+     *
+     * Since these scenarios cover most of the cases, we set MSP to
+     * z_main_stack here.
+     *
+     */
+    ldr r0, =z_main_stack + CONFIG_MAIN_STACK_SIZE
+    msr msp, r0
+
+    /* Note: Make sure that variables like z_sys_post_kernel
+     *       are set after the call to arch_pm_s2ram_resume
+     *       to avoid any issues with suspend/resume path.
+     *       Refer issue #83660 for more details.
+     */
+#if defined(CONFIG_DEBUG_THREAD_INFO)
+    /* Clear z_sys_post_kernel flag for RTOS aware debuggers */
+    movs.n r0, #0
+    ldr r1, =z_sys_post_kernel
+    strb r0, [r1]
+#endif /* CONFIG_DEBUG_THREAD_INFO */
+
 #if defined(CONFIG_SOC_RESET_HOOK)
     bl soc_reset_hook
 #endif
@@ -105,8 +145,6 @@ SECTION_SUBSEC_FUNC(TEXT,_reset_section,__start)
     str r0, [r1]
     dsb
 #endif /* CONFIG_CPU_HAS_ARM_MPU */
-    ldr r0, =z_main_stack + CONFIG_MAIN_STACK_SIZE
-    msr msp, r0
 
     /* Initialize core architecture registers and system blocks */
     bl z_arm_init_arch_hw_at_boot
diff --git a/include/zephyr/arch/common/pm_s2ram.h b/include/zephyr/arch/common/pm_s2ram.h
index ad9ab8ad7a4..34c544c769b 100644
--- a/include/zephyr/arch/common/pm_s2ram.h
+++ b/include/zephyr/arch/common/pm_s2ram.h
@@ -65,11 +65,6 @@ int arch_pm_s2ram_suspend(pm_s2ram_system_off_fn_t system_off);
  *
  * Default implementation is setting a magic word in RAM. CONFIG_PM_S2RAM_CUSTOM_MARKING
  * allows custom implementation.
- * The following requirements must be fulfilled:
- * - the function cannot use stack (asm function or function with 'naked' attribute)
- * - the content of the R1 and R4 registers must remain unchanged
- * - returning from the function should be performed with the `bx lr` instruction
- *
  */
 void pm_s2ram_mark_set(void);
 
@@ -81,11 +76,6 @@ void pm_s2ram_mark_set(void);
  *
  * Default implementation is checking a magic word in RAM. CONFIG_PM_S2RAM_CUSTOM_MARKING
  * allows custom implementation.
- * The following requirements must be fulfilled:
- * - the function cannot use stack (most likely asm function)
- * - the content of the R1 and R4 registers must remain unchanged
- * - the function's return value is passed by R0 register
- * - returning from the function should be performed with the `bx lr` instruction
  *
  * @retval true if marking is found which indicates resuming after suspend-to-RAM.
  * @retval false if marking is not found which indicates standard boot.