diff --git a/tests/unittests/telemetry/__init__.py b/tests/unittests/telemetry/__init__.py
new file mode 100644
index 0000000000..0a2669d7a2
--- /dev/null
+++ b/tests/unittests/telemetry/__init__.py
@@ -0,0 +1,13 @@
+# Copyright 2025 Google LLC
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
diff --git a/tests/unittests/telemetry/test_functional.py b/tests/unittests/telemetry/test_functional.py
new file mode 100644
index 0000000000..54db282a6c
--- /dev/null
+++ b/tests/unittests/telemetry/test_functional.py
@@ -0,0 +1,129 @@
+# Copyright 2025 Google LLC
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+import gc
+import sys
+from unittest import mock
+
+from google.adk import telemetry
+from google.adk.agents import base_agent
+from google.adk.agents.llm_agent import Agent
+from google.adk.models.base_llm import BaseLlm
+from google.adk.tools import FunctionTool
+from google.adk.utils.context_utils import Aclosing
+from google.genai.types import Part
+from opentelemetry.version import __version__
+import pytest
+
+from ..testing_utils import MockModel
+from ..testing_utils import TestInMemoryRunner
+
+
+@pytest.fixture
+def test_model() -> BaseLlm:
+  mock_model = MockModel.create(
+      responses=[
+          Part.from_function_call(name='some_tool', args={}),
+          Part.from_text(text='text response'),
+      ]
+  )
+  return mock_model
+
+
+@pytest.fixture
+def test_agent(test_model: BaseLlm) -> Agent:
+  def some_tool():
+    pass
+
+  root_agent = Agent(
+      name='some_root_agent',
+      model=test_model,
+      tools=[
+          FunctionTool(some_tool),
+      ],
+  )
+  return root_agent
+
+
+@pytest.fixture
+async def test_runner(test_agent: Agent) -> TestInMemoryRunner:
+  runner = TestInMemoryRunner(test_agent)
+  return runner
+
+
+@pytest.fixture
+def mock_start_as_current_span(monkeypatch: pytest.MonkeyPatch) -> mock.Mock:
+  mock_context_manager = mock.MagicMock()
+  mock_context_manager.__enter__.return_value = mock.Mock()
+  mock_start_as_current_span = mock.Mock()
+  mock_start_as_current_span.return_value = mock_context_manager
+
+  def do_replace(tracer):
+    monkeypatch.setattr(
+        tracer, 'start_as_current_span', mock_start_as_current_span
+    )
+
+  do_replace(telemetry.tracer)
+  do_replace(base_agent.tracer)
+
+  return mock_start_as_current_span
+
+
+@pytest.mark.asyncio
+async def test_tracer_start_as_current_span(
+    test_runner: TestInMemoryRunner,
+    mock_start_as_current_span: mock.Mock,
+):
+  """Test creation of multiple spans in an E2E runner invocation.
+
+  Additionally tests if each async generator invoked is wrapped in Aclosing.
+  This is necessary because instrumentation utilizes contextvars, which ran into "ContextVar was created in a different Context" errors,
+  when a given coroutine gets indeterminitely suspended.
+  """
+  firstiter, finalizer = sys.get_asyncgen_hooks()
+
+  def wrapped_firstiter(coro):
+    nonlocal firstiter
+    assert any(
+        isinstance(referrer, Aclosing)
+        or isinstance(indirect_referrer, Aclosing)
+        for referrer in gc.get_referrers(coro)
+        # Some coroutines have a layer of indirection in python 3.9 and 3.10
+        for indirect_referrer in gc.get_referrers(referrer)
+    ), f'Coro `{coro.__name__}` is not wrapped with Aclosing'
+    firstiter(coro)
+
+  sys.set_asyncgen_hooks(wrapped_firstiter, finalizer)
+
+  # Act
+  async with Aclosing(test_runner.run_async_with_new_session_agen('')) as agen:
+    async for _ in agen:
+      pass
+
+  # Assert
+  expected_start_as_current_span_calls = [
+      mock.call('invocation'),
+      mock.call('execute_tool some_tool'),
+      mock.call('agent_run [some_root_agent]'),
+      mock.call('call_llm'),
+      mock.call('call_llm'),
+  ]
+
+  mock_start_as_current_span.assert_has_calls(
+      expected_start_as_current_span_calls,
+      any_order=True,
+  )
+  assert mock_start_as_current_span.call_count == len(
+      expected_start_as_current_span_calls
+  )
diff --git a/tests/unittests/test_telemetry.py b/tests/unittests/telemetry/test_spans.py
similarity index 100%
rename from tests/unittests/test_telemetry.py
rename to tests/unittests/telemetry/test_spans.py
diff --git a/tests/unittests/testing_utils.py b/tests/unittests/testing_utils.py
index 1ff3d79866..0cc637871b 100644
--- a/tests/unittests/testing_utils.py
+++ b/tests/unittests/testing_utils.py
@@ -36,6 +36,7 @@
 from google.adk.runners import Runner
 from google.adk.sessions.in_memory_session_service import InMemorySessionService
 from google.adk.sessions.session import Session
+from google.adk.utils.context_utils import Aclosing
 from google.genai import types
 from google.genai.types import Part
 from typing_extensions import override
@@ -161,19 +162,26 @@ async def run_async_with_new_session(
       self, new_message: types.ContentUnion
   ) -> list[Event]:
 
+    collected_events: list[Event] = []
+    async for event in self.run_async_with_new_session_agen(new_message):
+      collected_events.append(event)
+
+    return collected_events
+
+  async def run_async_with_new_session_agen(
+      self, new_message: types.ContentUnion
+  ) -> AsyncGenerator[Event, None]:
     session = await self.session_service.create_session(
         app_name='InMemoryRunner', user_id='test_user'
     )
-    collected_events = []
-
-    async for event in self.run_async(
+    agen = self.run_async(
         user_id=session.user_id,
         session_id=session.id,
         new_message=get_user_content(new_message),
-    ):
-      collected_events.append(event)
-
-    return collected_events
+    )
+    async with Aclosing(agen):
+      async for event in agen:
+        yield event
 
 
 class InMemoryRunner: