diff --git a/subsys/fs/nvs/Kconfig b/subsys/fs/nvs/Kconfig
index 8b7dfdbab4094d..208be140f2219f 100644
--- a/subsys/fs/nvs/Kconfig
+++ b/subsys/fs/nvs/Kconfig
@@ -37,6 +37,14 @@ config NVS_DATA_CRC
 	  The CRC-32 is transparently stored at the end of the data field,
 	  in the NVS data section, so 4 more bytes are needed per NVS element.
 
+config NVS_INIT_BAD_MEMORY_REGION
+	bool "Non-volatile Storage bad memory region recovery"
+	help
+	  Enable automatic initialization of a NVS on a memory region that does
+	  not contain a valid NVS. A region containing an invalid NVS can be
+	  caused by corruption or by providing a non-empty region. This option
+	  ensures a new NVS can be created.
+
 module = NVS
 module-str = nvs
 source "subsys/logging/Kconfig.template.log_config"
diff --git a/subsys/fs/nvs/nvs.c b/subsys/fs/nvs/nvs.c
index e45e93e19825df..2c7c4ff5606f47 100644
--- a/subsys/fs/nvs/nvs.c
+++ b/subsys/fs/nvs/nvs.c
@@ -781,10 +781,23 @@ static int nvs_startup(struct nvs_fs *fs)
 			}
 		}
 	}
-	/* all sectors are closed, this is not a nvs fs */
+	/* all sectors are closed, this is not a nvs fs or irreparably corrupted */
 	if (closed_sectors == fs->sector_count) {
+#ifdef CONFIG_NVS_INIT_BAD_MEMORY_REGION
+		LOG_WRN("All sectors closed, erasing all sectors...");
+		rc = flash_flatten(fs->flash_device, fs->offset,
+				   fs->sector_size * fs->sector_count);
+		if (rc) {
+			goto end;
+		}
+
+		i = fs->sector_count;
+		addr = ((fs->sector_count - 1) << ADDR_SECT_SHIFT) +
+		       (uint16_t)(fs->sector_size - ate_size);
+#else
 		rc = -EDEADLK;
 		goto end;
+#endif
 	}
 
 	if (i == fs->sector_count) {
diff --git a/tests/subsys/fs/nvs/prj.conf b/tests/subsys/fs/nvs/prj.conf
index 75740e3df33328..c046194738a786 100644
--- a/tests/subsys/fs/nvs/prj.conf
+++ b/tests/subsys/fs/nvs/prj.conf
@@ -8,3 +8,4 @@ CONFIG_FLASH_MAP=y
 CONFIG_NVS=y
 CONFIG_LOG=y
 CONFIG_NVS_LOG_LEVEL_DBG=y
+CONFIG_NVS_INIT_BAD_MEMORY_REGION=y
diff --git a/tests/subsys/fs/nvs/src/main.c b/tests/subsys/fs/nvs/src/main.c
index 85aaf9f1b79f38..dcd264422b7416 100644
--- a/tests/subsys/fs/nvs/src/main.c
+++ b/tests/subsys/fs/nvs/src/main.c
@@ -959,3 +959,40 @@ ZTEST_F(nvs, test_nvs_cache_hash_quality)
 
 #endif
 }
+
+/*
+ * Test NVS bad region initialization recovery.
+ */
+ZTEST_F(nvs, test_nvs_init_bad_memory_region)
+{
+	int err;
+	uint32_t data;
+
+	err = nvs_mount(&fixture->fs);
+	zassert_true(err == 0, "nvs_mount call failure: %d", err);
+
+	/* Write bad ATE to each sector */
+	for (uint16_t i = 0; i < TEST_SECTOR_COUNT; i++) {
+		data = 0xdeadbeef;
+		err = flash_write(fixture->fs.flash_device,
+				  fixture->fs.offset + (fixture->fs.sector_size * (i + 1)) -
+					  sizeof(struct nvs_ate),
+				  &data, sizeof(data));
+		zassert_true(err == 0, "flash_write failed: %d", err);
+	}
+
+	/* Reinitialize the NVS. */
+	memset(&fixture->fs, 0, sizeof(fixture->fs));
+	(void)setup();
+
+#ifdef CONFIG_NVS_INIT_BAD_MEMORY_REGION
+	err = nvs_mount(&fixture->fs);
+	zassert_true(err == 0, "nvs_mount call failure: %d", err);
+
+	/* Ensure that the NVS is able to store new content. */
+	execute_long_pattern_write(TEST_DATA_ID, &fixture->fs);
+#else
+	err = nvs_mount(&fixture->fs);
+	zassert_true(err == -EDEADLK, "nvs_mount call ok, expect fail: %d", err);
+#endif
+}