diff --git a/storage/innobase/xtrabackup/src/xtrabackup.cc b/storage/innobase/xtrabackup/src/xtrabackup.cc
index ebe2fa193ec..65b56e413b3 100644
--- a/storage/innobase/xtrabackup/src/xtrabackup.cc
+++ b/storage/innobase/xtrabackup/src/xtrabackup.cc
@@ -5539,6 +5539,18 @@ static bool xtrabackup_apply_delta(
   return false;
 }
 
+// Function to check if a string ends with another string
+static bool ends_with(const string &full_string, const string &ext) {
+  // Check if the ending string is longer than the full
+  // string
+  if (ext.size() > full_string.size()) return false;
+
+  // Compare the ending of the full string with the target
+  // ending
+  return full_string.compare(full_string.size() - ext.size(), ext.size(),
+                             ext) == 0;
+}
+
 /************************************************************************
 Scan .meta files and build std::unordered_map<space_id, meta_path>.
 This map is later used to delete the .delta and .meta file for a dropped
@@ -5559,6 +5571,12 @@ static bool xtrabackup_scan_meta(
 
   ut_a(xtrabackup_incremental);
 
+  // We dont want to add .new.meta to meta_map, as they are meant to be replace
+  // the old version of the file.
+  if (ends_with(entry.file_name, ".new.meta")) {
+    return true;
+  }
+
   if (!xb_read_delta_metadata(meta_path.c_str(), &info)) {
     goto error;
   }
@@ -5790,28 +5808,27 @@ static bool prepare_handle_del_files(
       ut::free(space_name);
       return false;
     }
+  }
 
-    os_file_delete(0, del_file.c_str());
-    if (xtrabackup_incremental) {
-      auto [exists, meta_file] = is_in_meta_map(fil_space->id);
-      if (exists) {
-        // create .delta path from .meta
-        std::string delta_file =
-            meta_file.substr(0, strlen(meta_file.c_str()) - strlen(".meta")) +
-            ".delta";
-        xb::info() << "Deleting incremental meta file: " << meta_file;
-        delete_force(meta_file);
-        xb::info() << "Deleting incremental delta file: " << delta_file;
-        delete_force(delta_file);
-      }
+  if (xtrabackup_incremental) {
+    auto [exists, meta_file] = is_in_meta_map(space_id);
+    if (exists) {
+      // create .delta path from .meta
+      std::string delta_file =
+          meta_file.substr(0, strlen(meta_file.c_str()) - strlen(".meta")) +
+          ".delta";
+      xb::info() << "Deleting incremental meta file: " << meta_file;
+      delete_force(meta_file);
+      xb::info() << "Deleting incremental delta file: " << delta_file;
+      delete_force(delta_file);
     }
-    return true;
-  } else {
-    // if table was already deleted then return true
-    os_file_delete(0, del_file.c_str());
-    return true;
   }
+
+  xb::info() << "prepare_handle_del_files: deleting " << del_file.c_str();
+  os_file_delete(0, del_file.c_str());
+  return true;
 }
+
 /************************************************************************
 Callback to handle datadir entry. Deletes entry if it has no matching
 fil_space in fil_system directory.
diff --git a/storage/innobase/xtrabackup/test/suites/lockless/incremental_delete.sh b/storage/innobase/xtrabackup/test/suites/lockless/incremental_delete.sh
new file mode 100644
index 00000000000..ca9a9e87a23
--- /dev/null
+++ b/storage/innobase/xtrabackup/test/suites/lockless/incremental_delete.sh
@@ -0,0 +1,52 @@
+###############################################################################
+# PXB-3320: prepare_handle_del_files() fails to delete the .meta and .delta files
+#           for deleted tablespaces in incremental backup directory
+###############################################################################
+
+. inc/common.sh
+
+require_debug_pxb_version
+start_server
+
+innodb_wait_for_flush_all
+
+xtrabackup --backup --target-dir=$topdir/backup_base --lock-ddl=REDUCED
+
+innodb_wait_for_flush_all
+
+$MYSQL $MYSQL_ARGS -Ns -e "CREATE TABLE t2(a INT)" test
+
+xtrabackup --backup --target-dir=$topdir/backup_inc --incremental-basedir=$topdir/backup_base \
+  --debug-sync="ddl_tracker_before_lock_ddl" --lock-ddl=REDUCED \
+  2> >( tee $topdir/backup_inc.log)&
+
+job_pid=$!
+pid_file=$topdir/backup_inc/xtrabackup_debug_sync
+wait_for_xb_to_suspend $pid_file
+xb_pid=`cat $pid_file`
+echo "backup pid is $job_pid"
+
+# Generate redo on table than delete it
+$MYSQL $MYSQL_ARGS -Ns -e "INSERT INTO test.t2 VALUES (1); DROP TABLE test.t2;" test
+
+# Resume the xtrabackup process
+vlog "Resuming xtrabackup"
+kill -SIGCONT $xb_pid
+run_cmd wait $job_pid
+
+xtrabackup --prepare --apply-log-only --target-dir=$topdir/backup_base
+xtrabackup --prepare --target-dir=$topdir/backup_base --incremental-dir=$topdir/backup_inc
+
+# Ensure that t2.ibd shouldn't be present
+FILE=$topdir/backup_base/test/t2.ibd
+[ ! -f $FILE ] || die "$FILE exists. It should have been deleted by prepare. Server has dropped the table during incremental"
+
+record_db_state test
+stop_server
+rm -rf $mysql_datadir/*
+xtrabackup --copy-back --target-dir=$topdir/backup_base
+start_server
+verify_db_state test
+rm -rf $topdir/backup_base
+rm -rf $topdir/backup_inc
+rm $topdir/backup_inc.log