diff --git a/etcdserver/api/v3rpc/rpctypes/error.go b/etcdserver/api/v3rpc/rpctypes/error.go
index e6a281460d52..d008908508a1 100644
--- a/etcdserver/api/v3rpc/rpctypes/error.go
+++ b/etcdserver/api/v3rpc/rpctypes/error.go
@@ -35,6 +35,8 @@ var (
 	ErrGRPCLeaseExist       = status.New(codes.FailedPrecondition, "etcdserver: lease already exists").Err()
 	ErrGRPCLeaseTTLTooLarge = status.New(codes.OutOfRange, "etcdserver: too large lease TTL").Err()
 
+	ErrGRPCWatchCanceled = status.New(codes.Canceled, "etcdserver: watch canceled").Err()
+
 	ErrGRPCMemberExist            = status.New(codes.FailedPrecondition, "etcdserver: member ID already exist").Err()
 	ErrGRPCPeerURLExist           = status.New(codes.FailedPrecondition, "etcdserver: Peer URLs already exists").Err()
 	ErrGRPCMemberNotEnoughStarted = status.New(codes.FailedPrecondition, "etcdserver: re-configuration failed due to not enough started members").Err()
diff --git a/etcdserver/api/v3rpc/watch.go b/etcdserver/api/v3rpc/watch.go
index f41cb6c05695..1857e5498f86 100644
--- a/etcdserver/api/v3rpc/watch.go
+++ b/etcdserver/api/v3rpc/watch.go
@@ -29,6 +29,7 @@ import (
 	"go.etcd.io/etcd/mvcc/mvccpb"
 
 	"go.uber.org/zap"
+	"google.golang.org/grpc/metadata"
 )
 
 type watchServer struct {
@@ -189,19 +190,23 @@ func (ws *watchServer) Watch(stream pb.Watch_WatchServer) (err error) {
 		}
 	}()
 
+	defer sws.close()
 	select {
 	case err = <-errc:
 		close(sws.ctrlStream)
 
 	case <-stream.Context().Done():
 		err = stream.Context().Err()
-		// the only server-side cancellation is noleader for now.
 		if err == context.Canceled {
-			err = rpctypes.ErrGRPCNoLeader
+			if md, ok := metadata.FromIncomingContext(stream.Context()); ok {
+				rl := md.Get(rpctypes.MetadataRequireLeaderKey)
+				if len(rl) > 0 && rl[0] == "true" {
+					return rpctypes.ErrGRPCNoLeader
+				}
+			}
+			return rpctypes.ErrGRPCWatchCanceled
 		}
 	}
-
-	sws.close()
 	return err
 }
 
diff --git a/tests/e2e/metrics_test.go b/tests/e2e/metrics_test.go
index b515ac5b2bfc..2de2230eb1ed 100644
--- a/tests/e2e/metrics_test.go
+++ b/tests/e2e/metrics_test.go
@@ -49,6 +49,7 @@ func metricsTest(cx ctlCtx) {
 		{"/metrics", fmt.Sprintf("etcd_mvcc_delete_total 3")},
 		{"/metrics", fmt.Sprintf(`etcd_server_version{server_version="%s"} 1`, version.Version)},
 		{"/metrics", fmt.Sprintf(`etcd_cluster_version{cluster_version="%s"} 1`, version.Cluster(version.Version))},
+		{"/metrics", fmt.Sprintf(`grpc_server_handled_total{grpc_code="Canceled",grpc_method="Watch",grpc_service="etcdserverpb.Watch",grpc_type="bidi_stream"} 6`)},
 		{"/health", `{"health":"true"}`},
 	} {
 		i++
@@ -59,6 +60,9 @@ func metricsTest(cx ctlCtx) {
 			cx.t.Fatal(err)
 		}
 
+		if err := ctlV3Watch(cx, []string{"k", "--rev", "1"}, []kvExec{{key: "k", val: "v"}}...); err != nil {
+			cx.t.Fatal(err)
+		}
 		if err := cURLGet(cx.epc, cURLReq{endpoint: test.endpoint, expected: test.expected, metricsURLScheme: cx.cfg.metricsURLScheme}); err != nil {
 			cx.t.Fatalf("failed get with curl (%v)", err)
 		}