diff --git a/src/network/networkd-link.c b/src/network/networkd-link.c
index 9ce75361fdc..8f21504d92c 100644
--- a/src/network/networkd-link.c
+++ b/src/network/networkd-link.c
@@ -222,7 +222,7 @@ void link_dns_settings_clear(Link *link) {
         link->dnssec_negative_trust_anchors = set_free_free(link->dnssec_negative_trust_anchors);
 }
 
-static void link_free_engines(Link *link) {
+void link_free_engines(Link *link) {
         if (!link)
                 return;
 
@@ -376,7 +376,7 @@ int link_stop_engines(Link *link, bool may_keep_dhcp) {
         bool keep_dhcp = may_keep_dhcp &&
                          link->network &&
                          !link->network->dhcp_send_decline && /* IPv4 ACD for the DHCPv4 address is running. */
-                         (link->manager->restarting ||
+                         (link->manager->state == MANAGER_RESTARTING ||
                           FLAGS_SET(link->network->keep_configuration, KEEP_CONFIGURATION_DHCP_ON_STOP));
 
         if (!keep_dhcp) {
@@ -1321,6 +1321,10 @@ int link_reconfigure_impl(Link *link, bool force) {
         int r;
 
         assert(link);
+        assert(link->manager);
+
+        if (link->manager->state != MANAGER_RUNNING)
+                return 0;
 
         if (IN_SET(link->state, LINK_STATE_PENDING, LINK_STATE_LINGER))
                 return 0;
diff --git a/src/network/networkd-link.h b/src/network/networkd-link.h
index b1b2fe42db9..18586e6ccf1 100644
--- a/src/network/networkd-link.h
+++ b/src/network/networkd-link.h
@@ -248,6 +248,7 @@ int link_ipv6ll_gained(Link *link);
 bool link_has_ipv6_connectivity(Link *link);
 
 int link_stop_engines(Link *link, bool may_keep_dhcp);
+void link_free_engines(Link *link);
 
 const char* link_state_to_string(LinkState s) _const_;
 LinkState link_state_from_string(const char *s) _pure_;
diff --git a/src/network/networkd-manager.c b/src/network/networkd-manager.c
index 4ec4550caf3..caff1ed1820 100644
--- a/src/network/networkd-manager.c
+++ b/src/network/networkd-manager.c
@@ -425,30 +425,73 @@ static int manager_connect_rtnl(Manager *m, int fd) {
 static int manager_post_handler(sd_event_source *s, void *userdata) {
         Manager *manager = ASSERT_PTR(userdata);
 
+        /* To release dynamic leases, we need to process queued remove requests before stopping networkd.
+         * This is especially important when KeepConfiguration=no. See issue #34837. */
         (void) manager_process_remove_requests(manager);
-        (void) manager_process_requests(manager);
-        (void) manager_clean_all(manager);
+
+        switch (manager->state) {
+        case MANAGER_RUNNING:
+                (void) manager_process_requests(manager);
+                (void) manager_clean_all(manager);
+                return 0;
+
+        case MANAGER_TERMINATING:
+        case MANAGER_RESTARTING:
+                if (!ordered_set_isempty(manager->remove_request_queue))
+                        return 0; /* There are some unissued remove requests. */
+
+                if (netlink_get_reply_callback_count(manager->rtnl) > 0 ||
+                    netlink_get_reply_callback_count(manager->genl) > 0 ||
+                    fw_ctx_get_reply_callback_count(manager->fw_ctx) > 0)
+                        return 0; /* There are some message calls waiting for their replies. */
+
+                manager->state = MANAGER_STOPPED;
+                return sd_event_exit(sd_event_source_get_event(s), 0);
+
+        default:
+                assert_not_reached();
+        }
+
+        return 0;
+}
+
+static int manager_stop(Manager *manager, ManagerState state) {
+        assert(manager);
+        assert(IN_SET(state, MANAGER_TERMINATING, MANAGER_RESTARTING));
+
+        if (manager->state != MANAGER_RUNNING) {
+                log_debug("Already terminating or restarting systemd-networkd, refusing further operation request.");
+                return 0;
+        }
+
+        switch (state) {
+        case MANAGER_TERMINATING:
+                log_debug("Terminate operation initiated.");
+                break;
+        case MANAGER_RESTARTING:
+                log_debug("Restart operation initiated.");
+                break;
+        default:
+                assert_not_reached();
+        }
+
+        manager->state = state;
+
+        Link *link;
+        HASHMAP_FOREACH(link, manager->links_by_index) {
+                (void) link_stop_engines(link, /* may_keep_dhcp = */ true);
+                link_free_engines(link);
+        }
+
         return 0;
 }
 
 static int signal_terminate_callback(sd_event_source *s, const struct signalfd_siginfo *si, void *userdata) {
-        Manager *m = ASSERT_PTR(userdata);
-
-        m->restarting = false;
-
-        log_debug("Terminate operation initiated.");
-
-        return sd_event_exit(sd_event_source_get_event(s), 0);
+        return manager_stop(userdata, MANAGER_TERMINATING);
 }
 
 static int signal_restart_callback(sd_event_source *s, const struct signalfd_siginfo *si, void *userdata) {
-        Manager *m = ASSERT_PTR(userdata);
-
-        m->restarting = true;
-
-        log_debug("Restart operation initiated.");
-
-        return sd_event_exit(sd_event_source_get_event(s), 0);
+        return manager_stop(userdata, MANAGER_RESTARTING);
 }
 
 static int signal_reload_callback(sd_event_source *s, const struct signalfd_siginfo *si, void *userdata) {
@@ -614,16 +657,11 @@ int manager_new(Manager **ret, bool test_mode) {
 }
 
 Manager* manager_free(Manager *m) {
-        Link *link;
-
         if (!m)
                 return NULL;
 
         free(m->state_file);
 
-        HASHMAP_FOREACH(link, m->links_by_index)
-                (void) link_stop_engines(link, true);
-
         m->request_queue = ordered_set_free(m->request_queue);
         m->remove_request_queue = ordered_set_free(m->remove_request_queue);
 
diff --git a/src/network/networkd-manager.h b/src/network/networkd-manager.h
index c14a98fb975..7fc99fc1c24 100644
--- a/src/network/networkd-manager.h
+++ b/src/network/networkd-manager.h
@@ -19,6 +19,15 @@
 #include "time-util.h"
 #include "varlink.h"
 
+typedef enum ManagerState {
+        MANAGER_RUNNING,
+        MANAGER_TERMINATING,
+        MANAGER_RESTARTING,
+        MANAGER_STOPPED,
+        _MANAGER_STATE_MAX,
+        _MANAGER_STATE_INVALID = -EINVAL,
+} ManagerState;
+
 struct Manager {
         sd_netlink *rtnl;
         /* lazy initialized */
@@ -35,10 +44,10 @@ struct Manager {
         KeepConfiguration keep_configuration;
         IPv6PrivacyExtensions ipv6_privacy_extensions;
 
+        ManagerState state;
         bool test_mode;
         bool enumerating;
         bool dirty;
-        bool restarting;
         bool manage_foreign_routes;
         bool manage_foreign_rules;
         bool manage_foreign_nexthops;