diff --git a/pageserver/src/tenant/timeline/walreceiver/walreceiver_connection.rs b/pageserver/src/tenant/timeline/walreceiver/walreceiver_connection.rs
index e91bd5d43a..6d52da1f00 100644
--- a/pageserver/src/tenant/timeline/walreceiver/walreceiver_connection.rs
+++ b/pageserver/src/tenant/timeline/walreceiver/walreceiver_connection.rs
@@ -275,12 +275,20 @@ pub(super) async fn handle_walreceiver_connection(
     let copy_stream = replication_client.copy_both_simple(&query).await?;
     let mut physical_stream = pin!(ReplicationStream::new(copy_stream));
 
-    let mut walingest = WalIngest::new(timeline.as_ref(), startpoint, &ctx)
-        .await
-        .map_err(|e| match e.kind {
-            crate::walingest::WalIngestErrorKind::Cancelled => WalReceiverError::Cancelled,
-            _ => WalReceiverError::Other(e.into()),
-        })?;
+    let walingest_future = WalIngest::new(timeline.as_ref(), startpoint, &ctx);
+    let walingest_res = select! {
+        walingest_res = walingest_future => walingest_res,
+        _ = cancellation.cancelled() => {
+            // We are doing reads in WalIngest::new, and those can hang as they come from the network.
+            // Timeline cancellation hits the walreceiver cancellation token before it hits the timeline global one.
+            debug!("Connection cancelled");
+            return Err(WalReceiverError::Cancelled);
+        },
+    };
+    let mut walingest = walingest_res.map_err(|e| match e.kind {
+        crate::walingest::WalIngestErrorKind::Cancelled => WalReceiverError::Cancelled,
+        _ => WalReceiverError::Other(e.into()),
+    })?;
 
     let (format, compression) = match protocol {
         PostgresClientProtocol::Interpreted {
diff --git a/test_runner/regress/test_ondemand_download.py b/test_runner/regress/test_ondemand_download.py
index 2b71662669..2590a3fe9d 100644
--- a/test_runner/regress/test_ondemand_download.py
+++ b/test_runner/regress/test_ondemand_download.py
@@ -671,12 +671,6 @@ def test_layer_download_cancelled_by_config_location(neon_env_builder: NeonEnvBu
     """
     neon_env_builder.enable_pageserver_remote_storage(s3_storage())
 
-    # On the new mode, the test runs into a cancellation issue, i.e. the walproposer can't shut down
-    # as it is hang-waiting on the timeline_checkpoint call in WalIngest::new.
-    neon_env_builder.storage_controller_config = {
-        "timelines_onto_safekeepers": False,
-    }
-
     # turn off background tasks so that they don't interfere with the downloads
     env = neon_env_builder.init_start(
         initial_tenant_conf={