diff --git a/news/changelog-1.8.md b/news/changelog-1.8.md
index ec10b18d463..b28360c641c 100644
--- a/news/changelog-1.8.md
+++ b/news/changelog-1.8.md
@@ -40,6 +40,10 @@ All changes included in 1.8:
 
 - ([#12775](https://github.com/quarto-dev/quarto-cli/issues/12775)): Convert Quarto-native layouts (divs with `layout` syntax) to Beamer columns, equivalent to using the Pandoc-native syntax of div with `columns` and `column` classes.
 
+### `hugo-md`
+
+- ([#12676](https://github.com/quarto-dev/quarto-cli/issues/12676)): Add support for rendering layout panels that are not floats.
+
 ## Projects
 
 ### `website`
diff --git a/src/resources/filters/layout/hugo.lua b/src/resources/filters/layout/hugo.lua
index 88f20430223..3c73b00c927 100644
--- a/src/resources/filters/layout/hugo.lua
+++ b/src/resources/filters/layout/hugo.lua
@@ -4,9 +4,51 @@
 _quarto.ast.add_renderer("PanelLayout", function(_)
   return _quarto.format.isHugoMarkdownOutput()
 end, function(layout)
+  local function make_panel_content()
+    local panel_content = pandoc.Blocks({})
+    -- layout
+    for i, row in ipairs(layout.layout) do
+      
+      local aligns = row:map(function(cell) 
+        -- get the align
+        local align = cell.attributes[kLayoutAlign]
+        return layoutTableAlign(align) 
+      end)
+      local widths = row:map(function(cell) 
+        -- propagage percents if they are provided
+        local layoutPercent = horizontalLayoutPercent(cell)
+        if layoutPercent then
+          return layoutPercent / 100
+        else
+          return 0
+        end
+      end)
+
+      local cells = pandoc.List()
+      for _, cell in ipairs(row) do
+        cells:insert(cell)
+      end
+      
+      -- make the table
+      local panelTable = pandoc.SimpleTable(
+        pandoc.List(), -- caption
+        aligns,
+        widths,
+        pandoc.List(), -- headers
+        pandoc.List { cells }
+      )
+      
+      -- add it to the panel
+      panel_content:insert(pandoc.utils.from_simple_table(panelTable))
+    end
+    return panel_content
+  end
+
   if layout.float == nil then
-    fail_and_ask_for_bug_report("Can't render layouts without floats")
-    return pandoc.Div({})
+    -- if there is no float, then we just return the content and preamble
+    local result = pandoc.Div(layout.preamble or {})
+    result.content:extend(make_panel_content())
+    return result
   end
   decorate_caption_with_crossref(layout.float)
 
@@ -14,45 +56,9 @@ end, function(layout)
   if not options then
     options = {}
   end
-  -- outer panel to contain css and figure panel
-  local attr = pandoc.Attr(layout.identifier or "", layout.classes or {}, layout.attributes or {})
-  local panel_content = pandoc.Blocks({})
-  -- layout
-  for i, row in ipairs(layout.layout) do
-    
-    local aligns = row:map(function(cell) 
-      -- get the align
-      local align = cell.attributes[kLayoutAlign]
-      return layoutTableAlign(align) 
-    end)
-    local widths = row:map(function(cell) 
-      -- propagage percents if they are provided
-      local layoutPercent = horizontalLayoutPercent(cell)
-      if layoutPercent then
-        return layoutPercent / 100
-      else
-        return 0
-      end
-    end)
-
-    local cells = pandoc.List()
-    for _, cell in ipairs(row) do
-      cells:insert(cell)
-    end
-    
-    -- make the table
-    local panelTable = pandoc.SimpleTable(
-      pandoc.List(), -- caption
-      aligns,
-      widths,
-      pandoc.List(), -- headers
-      { cells }
-    )
-    
-    -- add it to the panel
-    panel_content:insert(pandoc.utils.from_simple_table(panelTable))
-  end
+  local panel_content = make_panel_content()
 
+  -- outer panel to contain css and figure panel
   local result = pandoc.Div({})
   -- the format for the rawblock is html and not markdown_strict
   -- because this might end up inside a table, and Pandoc
diff --git a/tests/docs/smoke-all/2025/06/12/issue-12676.qmd b/tests/docs/smoke-all/2025/06/12/issue-12676.qmd
new file mode 100644
index 00000000000..494962bc448
--- /dev/null
+++ b/tests/docs/smoke-all/2025/06/12/issue-12676.qmd
@@ -0,0 +1,12 @@
+---
+format: hugo-md
+---
+
+::: {layout-ncol="2"}
+
+Hello.
+
+Hello.
+
+:::
+