diff --git a/compiler/daemon/src/org/jetbrains/kotlin/daemon/CompileServiceImpl.kt b/compiler/daemon/src/org/jetbrains/kotlin/daemon/CompileServiceImpl.kt
index 2158e137aa9..dbdcef00f5a 100644
--- a/compiler/daemon/src/org/jetbrains/kotlin/daemon/CompileServiceImpl.kt
+++ b/compiler/daemon/src/org/jetbrains/kotlin/daemon/CompileServiceImpl.kt
@@ -619,7 +619,7 @@ class CompileServiceImpl(
                     shutdownWithDelay()
                     return
                 }
-                state.aliveClientsCount == 0 && compilationsCounter.get() > 0 -> {
+                state.aliveClientsCount == 0 -> {
                     log.info("No more clients left")
                     shutdownWithDelay()
                     return
diff --git a/compiler/tests/org/jetbrains/kotlin/daemon/CompilerDaemonTest.kt b/compiler/tests/org/jetbrains/kotlin/daemon/CompilerDaemonTest.kt
index 6065afa9419..eb34fc99cb5 100644
--- a/compiler/tests/org/jetbrains/kotlin/daemon/CompilerDaemonTest.kt
+++ b/compiler/tests/org/jetbrains/kotlin/daemon/CompilerDaemonTest.kt
@@ -85,11 +85,12 @@ class CompilerDaemonTest : KotlinIntegrationTestBase() {
                                       verbose = true,
                                       reportPerf = true)
 
-    fun makeTestDaemonJvmOptions(logFile: File? = null, xmx: Int = 384): DaemonJVMOptions {
+    fun makeTestDaemonJvmOptions(logFile: File? = null, xmx: Int = 384, args: Iterable<String> = listOf()): DaemonJVMOptions {
         val additionalArgs = arrayListOf<String>()
         if (logFile != null) {
             additionalArgs.add("D$COMPILE_DAEMON_LOG_PATH_PROPERTY=\"${logFile.loggerCompatiblePath}\"")
         }
+        args.forEach { additionalArgs.add(it) }
         val baseOpts = if (xmx > 0) DaemonJVMOptions(maxMemory = "${xmx}m") else DaemonJVMOptions()
         return configureDaemonJVMOptions(
                 baseOpts,
@@ -346,6 +347,61 @@ class CompilerDaemonTest : KotlinIntegrationTestBase() {
         }
     }
 
+    fun testDaemonExitsOnClientFlagDeletedWithActiveSessions() {
+        val daemonOptions = DaemonOptions(autoshutdownIdleSeconds = 1000, shutdownDelayMilliseconds = 1, runFilesPath = File(tmpdir, getTestName(true)).absolutePath)
+        val clientFlag = createTempFile(getTestName(true), "-client.alive")
+        val sessionFlag = createTempFile(getTestName(true), "-session.alive")
+        try {
+            withLogFile("kotlin-daemon-test") { logFile ->
+                val daemonJVMOptions = makeTestDaemonJvmOptions(logFile)
+                val daemon = KotlinCompilerClient.connectToCompileService(compilerId, clientFlag, daemonJVMOptions, daemonOptions, DaemonReportingTargets(out = System.err), autostart = true)
+                assertNotNull("failed to connect daemon", daemon)
+                daemon?.leaseCompileSession(sessionFlag.canonicalPath)
+
+                clientFlag.delete()
+
+                Thread.sleep(2100) // allow deleted file detection, should be 2 * DAEMON_PERIODIC_CHECK_INTERVAL_MS + o
+                // TODO: consider possibility to set DAEMON_PERIODIC_CHECK_INTERVAL_MS from tests, to allow shorter sleeps
+
+                logFile.assertLogContainsSequence("No more clients left",
+                                                  "Shutdown started")
+            }
+        }
+        finally {
+            sessionFlag.delete()
+            clientFlag.delete()
+        }
+    }
+
+    fun testDaemonExitsOnClientFlagDeletedWithAllSessionsReleased() {
+        val daemonOptions = DaemonOptions(autoshutdownIdleSeconds = 1000, shutdownDelayMilliseconds = 1, runFilesPath = File(tmpdir, getTestName(true)).absolutePath)
+        val clientFlag = createTempFile(getTestName(true), "-client.alive")
+        val sessionFlag = createTempFile(getTestName(true), "-session.alive")
+        try {
+            withLogFile("kotlin-daemon-test") { logFile ->
+                val daemonJVMOptions = makeTestDaemonJvmOptions(logFile)
+                val daemon = KotlinCompilerClient.connectToCompileService(compilerId, clientFlag, daemonJVMOptions, daemonOptions, DaemonReportingTargets(out = System.err), autostart = true)
+                assertNotNull("failed to connect daemon", daemon)
+                daemon?.leaseCompileSession(sessionFlag.canonicalPath)
+
+                sessionFlag.delete()
+
+                Thread.sleep(2100) // allow deleted file detection, should be 2 * DAEMON_PERIODIC_CHECK_INTERVAL_MS + o
+
+                clientFlag.delete()
+
+                Thread.sleep(2100) // allow deleted file detection, should be 2 * DAEMON_PERIODIC_CHECK_INTERVAL_MS + o
+
+                logFile.assertLogContainsSequence("No more clients left",
+                                                  "Shutdown started")
+            }
+        }
+        finally {
+            sessionFlag.delete()
+            clientFlag.delete()
+        }
+    }
+
     /** Testing that running daemon in the child process doesn't block on s child process.waitFor()
      *  that may happen on windows if simple processBuilder.start is used due to handles inheritance:
      *  - process A starts process B using ProcessBuilder and waits for it using process.waitFor()