diff --git a/packages/jumpstarter-cli-common/jumpstarter_cli_common/exceptions.py b/packages/jumpstarter-cli-common/jumpstarter_cli_common/exceptions.py
index 95616ceab..dd989cc88 100644
--- a/packages/jumpstarter-cli-common/jumpstarter_cli_common/exceptions.py
+++ b/packages/jumpstarter-cli-common/jumpstarter_cli_common/exceptions.py
@@ -1,6 +1,7 @@
 import types
 from functools import wraps
 from types import TracebackType
+from typing import NoReturn
 
 import click
 
@@ -13,12 +14,21 @@ def format_message(self) -> str:
 
 
 def async_handle_exceptions(func):
-    """Decorator to handle exceptions in async functions."""
+    """Decorator to handle exceptions in async functions, including those wrapped in BaseExceptionGroup."""
 
     @wraps(func)
     async def wrapped(*args, **kwargs):
         try:
             return await func(*args, **kwargs)
+        except BaseExceptionGroup as eg:
+            # Handle exceptions wrapped in ExceptionGroup (e.g., from task groups)
+            for exc in leaf_exceptions(eg, fix_tracebacks=False):
+                if isinstance(exc, JumpstarterException):
+                    raise ClickExceptionRed(str(exc)) from None
+                elif isinstance(exc, click.ClickException):
+                    raise exc from None
+            # If no handled exceptions, re-raise the original group
+            raise eg
         except JumpstarterException as e:
             raise ClickExceptionRed(str(e)) from None
         except click.ClickException:
@@ -46,26 +56,48 @@ def wrapped(*args, **kwargs):
     return wrapped
 
 
+def _handle_connection_error_with_reauth(exc, login_func):
+    """Handle ConnectionError with reauthentication logic."""
+    if "expired" in str(exc).lower():
+        click.echo(click.style("Token is expired, triggering re-authentication", fg="red"))
+        config = exc.get_config()
+        login_func(config)
+        raise ClickExceptionRed("Please try again now") from None
+    else:
+        raise ClickExceptionRed(str(exc)) from None
+
+
+def _handle_single_exception_with_reauth(exc, login_func):
+    """Handle a single exception (may raise)."""
+    if isinstance(exc, ConnectionError):
+        _handle_connection_error_with_reauth(exc, login_func)
+    elif isinstance(exc, JumpstarterException):
+        raise ClickExceptionRed(str(exc)) from None
+    elif isinstance(exc, click.ClickException):
+        raise exc from None
+    # Not handled: fall through
+
+
+def _handle_exception_group_with_reauth(eg, login_func) -> NoReturn:
+    """Handle exceptions wrapped in BaseExceptionGroup."""
+    for exc in leaf_exceptions(eg, fix_tracebacks=False):
+        _handle_single_exception_with_reauth(exc, login_func)
+    # If no handled exceptions, re-raise the original group
+    raise eg
+
+
 def handle_exceptions_with_reauthentication(login_func):
-    """Decorator to handle exceptions in blocking functions."""
+    """Decorator to handle exceptions in blocking functions, including those wrapped in BaseExceptionGroup."""
 
     def decorator(func):
         @wraps(func)
         def wrapped(*args, **kwargs):
             try:
                 return func(*args, **kwargs)
-            except ConnectionError as e:
-                if "expired" in str(e).lower():
-                    click.echo(click.style("Token is expired, triggering re-authentication", fg="red"))
-                    config = e.get_config()
-                    login_func(config)
-                    raise ClickExceptionRed("Please try again now") from None
-                else:
-                    raise ClickExceptionRed(str(e)) from None
-            except JumpstarterException as e:
-                raise ClickExceptionRed(str(e)) from None
-            except click.ClickException:
-                raise  # if it was already a click exception from the cli commands, just re-raise it
+            except BaseExceptionGroup as eg:
+                _handle_exception_group_with_reauth(eg, login_func)
+            except (ConnectionError, JumpstarterException, click.ClickException) as e:
+                _handle_single_exception_with_reauth(e, login_func)
             except Exception:
                 raise
 
@@ -74,7 +106,7 @@ def wrapped(*args, **kwargs):
     return decorator
 
 
-# https://peps.python.org/pep-0785/#reference-implementation
+# https://peps.python.org/pep-0654/
 def leaf_exceptions(self: BaseExceptionGroup, *, fix_tracebacks: bool = True) -> list[BaseException]:
     """
     Return a flat list of all 'leaf' exceptions.
diff --git a/packages/jumpstarter-cli/jumpstarter_cli/shell.py b/packages/jumpstarter-cli/jumpstarter_cli/shell.py
index 1a696d393..4e460dd71 100644
--- a/packages/jumpstarter-cli/jumpstarter_cli/shell.py
+++ b/packages/jumpstarter-cli/jumpstarter_cli/shell.py
@@ -1,9 +1,12 @@
 import sys
 from datetime import timedelta
 
+import anyio
 import click
+from anyio import create_task_group, get_cancelled_exc_class
 from jumpstarter_cli_common.config import opt_config
 from jumpstarter_cli_common.exceptions import handle_exceptions_with_reauthentication
+from jumpstarter_cli_common.signal import signal_handler
 
 from .common import opt_duration_partial, opt_selector
 from .login import relogin_client
@@ -12,6 +15,52 @@
 from jumpstarter.config.exporter import ExporterConfigV1Alpha1
 
 
+def _run_shell_with_lease(lease, exporter_logs, config, command):
+    """Run shell with lease context managers."""
+    def launch_remote_shell(path: str) -> int:
+        return launch_shell(
+            path, lease.exporter_name, config.drivers.allow, config.drivers.unsafe,
+            config.shell.use_profiles, command=command
+        )
+
+    with lease.serve_unix() as path:
+        with lease.monitor():
+            if exporter_logs:
+                with lease.connect() as client:
+                    with client.log_stream():
+                        return launch_remote_shell(path)
+            else:
+                return launch_remote_shell(path)
+
+
+async def _shell_with_signal_handling(config, selector, lease_name, duration, exporter_logs, command):
+    """Handle lease acquisition and shell execution with signal handling."""
+    exit_code = 0
+    cancelled_exc_class = get_cancelled_exc_class()
+
+    async with create_task_group() as tg:
+        tg.start_soon(signal_handler, tg.cancel_scope)
+        try:
+            try:
+                async with anyio.from_thread.BlockingPortal() as portal:
+                    async with config.lease_async(selector, lease_name, duration, portal) as lease:
+                        exit_code = await anyio.to_thread.run_sync(
+                            _run_shell_with_lease, lease, exporter_logs, config, command
+                        )
+            except BaseExceptionGroup as eg:
+                for exc in eg.exceptions:
+                    if isinstance(exc, TimeoutError):
+                        raise exc from None
+                raise
+            except cancelled_exc_class:
+                exit_code = 2
+        finally:
+            if not tg.cancel_scope.cancel_called:
+                tg.cancel_scope.cancel()
+
+    return exit_code
+
+
 @click.command("shell")
 @opt_config()
 @click.argument("command", nargs=-1)
@@ -38,27 +87,9 @@ def shell(config, command: tuple[str, ...], lease_name, selector, duration, expo
 
     match config:
         case ClientConfigV1Alpha1():
-            exit_code = 0
-            def _launch_remote_shell(path: str) -> int:
-                return launch_shell(
-                    path,
-                    "remote",
-                    config.drivers.allow,
-                    config.drivers.unsafe,
-                    config.shell.use_profiles,
-                    command=command,
-                )
-
-            with config.lease(selector=selector, lease_name=lease_name, duration=duration) as lease:
-                with lease.serve_unix() as path:
-                    with lease.monitor():
-                        if exporter_logs:
-                            with lease.connect() as client:
-                                with client.log_stream():
-                                    exit_code = _launch_remote_shell(path)
-                        else:
-                            exit_code = _launch_remote_shell(path)
-            # we exit here to make sure that all the with clauses unwind
+            exit_code = anyio.run(
+                _shell_with_signal_handling, config, selector, lease_name, duration, exporter_logs, command
+            )
             sys.exit(exit_code)
 
         case ExporterConfigV1Alpha1():
diff --git a/packages/jumpstarter/jumpstarter/client/lease.py b/packages/jumpstarter/jumpstarter/client/lease.py
index 953d30867..08af4b20b 100644
--- a/packages/jumpstarter/jumpstarter/client/lease.py
+++ b/packages/jumpstarter/jumpstarter/client/lease.py
@@ -9,7 +9,14 @@
 from datetime import datetime, timedelta
 from typing import Any, Self
 
-from anyio import AsyncContextManagerMixin, ContextManagerMixin, create_task_group, fail_after, sleep
+from anyio import (
+    AsyncContextManagerMixin,
+    CancelScope,
+    ContextManagerMixin,
+    create_task_group,
+    fail_after,
+    sleep,
+)
 from anyio.from_thread import BlockingPortal
 from grpc.aio import Channel
 from jumpstarter_protocol import jumpstarter_pb2, jumpstarter_pb2_grpc
@@ -40,6 +47,8 @@ class Lease(ContextManagerMixin, AsyncContextManagerMixin):
     controller: jumpstarter_pb2_grpc.ControllerServiceStub = field(init=False)
     tls_config: TLSConfigV1Alpha1 = field(default_factory=TLSConfigV1Alpha1)
     grpc_options: dict[str, Any] = field(default_factory=dict)
+    acquisition_timeout: int = field(default=7200)  # Timeout in seconds for lease acquisition, polled in 5s intervals
+    exporter_name: str = field(default="remote", init=False)  # Populated during acquisition
 
     def __post_init__(self):
         if hasattr(super(), "__post_init__"):
@@ -57,7 +66,7 @@ async def _create(self):
                     duration=self.duration,
                 )
             ).name
-        logger.info("Created lease request for selector %s for duration %s", self.selector, self.duration)
+        logger.info("Acquiring lease %s for selector %s for duration %s", self.name, self.selector, self.duration)
 
     async def get(self):
         with translate_grpc_exceptions():
@@ -99,6 +108,7 @@ async def request_async(self):
                 await self._create()
         else:
             await self._create()
+
         return await self._acquire()
 
     async def _acquire(self):
@@ -106,47 +116,62 @@ async def _acquire(self):
 
         Makes sure the lease is ready, and returns the lease object.
         """
-        with fail_after(300):  # TODO: configurable timeout
-            while True:
-                logger.debug("Polling Lease %s", self.name)
-                result = await self.get()
-                # lease ready
-                if condition_true(result.conditions, "Ready"):
-                    logger.debug("Lease %s acquired", self.name)
-                    return self
-                # lease unsatisfiable
-                if condition_true(result.conditions, "Unsatisfiable"):
-                    message = condition_message(result.conditions, "Unsatisfiable")
-                    logger.debug(
-                        "Lease %s cannot be satisfied: %s",
-                        self.name,
-                        condition_message(result.conditions, "Unsatisfiable"),
-                    )
-                    raise LeaseError(f"the lease cannot be satisfied: {message}")
-
-                # lease not pending
-                if condition_false(result.conditions, "Pending"):
-                    raise LeaseError(
-                        f"Lease {self.name} is not in pending, but it isn't in Ready or Unsatisfiable state either"
-                    )
-
-                # lease released
-                if condition_present_and_equal(result.conditions, "Ready", "False", "Released"):
-                    raise LeaseError(f"lease {self.name} released")
-
-                await sleep(1)
+        try:
+            with fail_after(self.acquisition_timeout):
+                while True:
+                    logger.debug("Polling Lease %s", self.name)
+                    result = await self.get()
+                    # lease ready
+                    if condition_true(result.conditions, "Ready"):
+                        logger.debug("Lease %s acquired", self.name)
+                        self.exporter_name = result.exporter
+                        return self
+                    # lease unsatisfiable
+                    if condition_true(result.conditions, "Unsatisfiable"):
+                        message = condition_message(result.conditions, "Unsatisfiable")
+                        logger.debug("Lease %s cannot be satisfied: %s", self.name, message)
+                        raise LeaseError(f"the lease cannot be satisfied: {message}")
+
+                    # lease invalid
+                    if condition_true(result.conditions, "Invalid"):
+                        message = condition_message(result.conditions, "Invalid")
+                        logger.debug("Lease %s is invalid: %s", self.name, message)
+                        raise LeaseError(f"the lease is invalid: {message}")
+
+                    # lease not pending
+                    if condition_false(result.conditions, "Pending"):
+                        raise LeaseError(
+                            f"Lease {self.name} is not in pending, but it isn't in Ready or Unsatisfiable state either"
+                        )
+
+                    # lease released
+                    if condition_present_and_equal(result.conditions, "Ready", "False", "Released"):
+                        raise LeaseError(f"lease {self.name} released")
+
+                    await sleep(5)
+        except TimeoutError:
+            logger.debug(f"Lease {self.name} acquisition timed out after {self.acquisition_timeout} seconds")
+            raise LeaseError(
+                f"lease {self.name} acquisition timed out after {self.acquisition_timeout} seconds"
+            ) from None
 
     @asynccontextmanager
     async def __asynccontextmanager__(self) -> AsyncGenerator[Self]:
-        value = await self.request_async()
         try:
+            value = await self.request_async()
             yield value
         finally:
-            if self.release:
+            if self.release and self.name:
                 logger.info("Releasing Lease %s", self.name)
-                await self.svc.DeleteLease(
-                    name=self.name,
-                )
+                # Shield cleanup from cancellation to ensure it completes
+                with CancelScope(shield=True):
+                    try:
+                        with fail_after(30):
+                            await self.svc.DeleteLease(
+                                name=self.name,
+                            )
+                    except TimeoutError:
+                        logger.warning("Timeout while deleting lease %s during cleanup", self.name)
 
     @contextmanager
     def __contextmanager__(self) -> Generator[Self]:
diff --git a/packages/jumpstarter/jumpstarter/common/utils.py b/packages/jumpstarter/jumpstarter/common/utils.py
index b960bfdb0..8fb3cc67f 100644
--- a/packages/jumpstarter/jumpstarter/common/utils.py
+++ b/packages/jumpstarter/jumpstarter/common/utils.py
@@ -59,7 +59,7 @@ def launch_shell(
 
     Args:
         host: The jumpstarter host path
-        context: The context of the shell ("local" or "remote")
+        context: The context of the shell (e.g. "local" or exporter name)
         allow: List of allowed drivers
         unsafe: Whether to allow drivers outside of the allow list
     """
diff --git a/packages/jumpstarter/jumpstarter/config/client.py b/packages/jumpstarter/jumpstarter/config/client.py
index 9872c3c7e..fc4c3d1c2 100644
--- a/packages/jumpstarter/jumpstarter/config/client.py
+++ b/packages/jumpstarter/jumpstarter/config/client.py
@@ -86,6 +86,16 @@ def decode_unsafe(self) -> Self:
         return self
 
 
+class ClientConfigV1Alpha1Lease(BaseSettings):
+    """Configuration for lease operations."""
+
+    acquisition_timeout: int = Field(
+        default=7200,
+        description="Timeout in seconds for lease acquisition",
+        ge=5,  # Must be at least 5 seconds (polling interval)
+    )
+
+
 class ClientConfigV1Alpha1(BaseSettings):
     CLIENT_CONFIGS_PATH: ClassVar[Path] = CONFIG_PATH / "clients"
 
@@ -108,6 +118,8 @@ class ClientConfigV1Alpha1(BaseSettings):
 
     shell: ShellConfigV1Alpha1 = Field(default_factory=ShellConfigV1Alpha1)
 
+    leases: ClientConfigV1Alpha1Lease = Field(default_factory=ClientConfigV1Alpha1Lease)
+
     async def channel(self):
         if self.endpoint is None or self.token is None:
             raise ConfigurationError("endpoint or token not set in client config")
@@ -258,6 +270,7 @@ async def lease_async(
                 release=release_lease,
                 tls_config=self.tls,
                 grpc_options=self.grpcOptions,
+                acquisition_timeout=self.leases.acquisition_timeout,
             ) as lease:
                 yield lease
 
diff --git a/packages/jumpstarter/jumpstarter/config/client_config_test.py b/packages/jumpstarter/jumpstarter/config/client_config_test.py
index 3dbcdabf1..a82ed01f6 100644
--- a/packages/jumpstarter/jumpstarter/config/client_config_test.py
+++ b/packages/jumpstarter/jumpstarter/config/client_config_test.py
@@ -214,6 +214,8 @@ def test_client_config_save(monkeypatch: pytest.MonkeyPatch):
   unsafe: false
 shell:
   use_profiles: false
+leases:
+  acquisition_timeout: 7200
 """
     config = ClientConfigV1Alpha1(
         alias="testclient",
@@ -253,6 +255,8 @@ def test_client_config_save_explicit_path():
   unsafe: false
 shell:
   use_profiles: false
+leases:
+  acquisition_timeout: 7200
 """
     config = ClientConfigV1Alpha1(
         alias="testclient",
@@ -288,6 +292,8 @@ def test_client_config_save_unsafe_drivers():
   unsafe: true
 shell:
   use_profiles: false
+leases:
+  acquisition_timeout: 7200
 """
     config = ClientConfigV1Alpha1(
         alias="testclient",