diff --git a/kernel/timeout.c b/kernel/timeout.c
index 1c5ad0ff5b810..4653c1f0368bd 100644
--- a/kernel/timeout.c
+++ b/kernel/timeout.c
@@ -336,6 +336,7 @@ void z_vrfy_sys_clock_tick_set(uint64_t tick)
 #ifdef CONFIG_SOC_FAMILY_REALTEK_BEE
 /* To support RTK PM */
 extern void sys_clock_only_add_cycle_count(int32_t ticks);
+extern void CPU_DLPS_Exit(void);
 struct _timeout *get_first_timeout(void)
 {
 	return first();
@@ -366,6 +367,7 @@ void sys_clock_restore_tick_and_cycle(void)
 
 void sys_clock_announce_process_timeout(void)
 {
+	/* Update the timeout list: only handle pended ticks. */
 	k_spinlock_key_t key = k_spin_lock(&timeout_lock);
 
 	struct _timeout *t;
@@ -383,11 +385,24 @@ void sys_clock_announce_process_timeout(void)
 
 	pended_ticks = 0;
 
-	/* Separate the handling of pending tick counts and timeout
-	 * callback functions to avoid errors when a timer is started
+	k_spin_unlock(&timeout_lock, key);
+
+	/* Resume NVIC to trigger interrupts that occurred during DLPS.
+	 * ISR might update the timout list, so ensure this is done after updating
+	 * the timeout list.
+	 */
+	__disable_irq();
+	CPU_DLPS_Exit();
+	__enable_irq();
+
+	/* Manually trigger processing of the timeout callback.
+	 * Separating updating pended ticks and timeout
+	 * callback processing to avoid errors if timer behaivor happens
 	 * during the timer callback.
 	 */
 
+ 	key = k_spin_lock(&timeout_lock);
+
 	for (t = first(); (t != NULL) && (t->dticks == 0); t = first()) {
 		remove_timeout(t);
 
diff --git a/soc/realtek/bee/rtl87x2g/power.c b/soc/realtek/bee/rtl87x2g/power.c
index d1889af738d3e..e01eca4bc9a28 100644
--- a/soc/realtek/bee/rtl87x2g/power.c
+++ b/soc/realtek/bee/rtl87x2g/power.c
@@ -161,8 +161,6 @@ void pm_resume_devices_rtk(void)
 				     PM_DEVICE_ACTION_RESUME);
 	}
 
-	CPU_DLPS_Exit();
-
 	num_susp_rtk = 0;
 }
 
@@ -183,7 +181,8 @@ void pm_reusme_systick_and_process_timeout(void)
 	sys_clock_restore_tick_and_cycle();
 	__enable_irq();
 
-	/* Subtract the pended tick from the timeout list and manually trigger a timeout process. */
+	/* Subtract the pended tick from the timeout list, resume NVIC and manually trigger the
+	 * timeout callback process. */
 	sys_clock_announce_process_timeout();
 }
 
diff --git a/tests/boards/rtl87x2g_evb/pm/timeout_wakeup/src/main.c b/tests/boards/rtl87x2g_evb/pm/timeout_wakeup/src/main.c
index 86f6242691572..0dd52fc74841e 100644
--- a/tests/boards/rtl87x2g_evb/pm/timeout_wakeup/src/main.c
+++ b/tests/boards/rtl87x2g_evb/pm/timeout_wakeup/src/main.c
@@ -98,7 +98,7 @@ ZTEST(timeout_wakeup, test_k_thread_wakeup)
 	uint32_t wakeup_count_thread;
 
 	power_get_statistics(&wakeup_count_before_test, &last_wakeup_clk, &last_sleep_clk);
-	while (test_thread_sleep_num <= THREAD_SLEEP_NUMBERS) {
+	while (test_thread_sleep_num < THREAD_SLEEP_NUMBERS) {
 		k_msleep(100);
 		test_thread_sleep_num++;
 	}