diff --git a/src/components/select/simple-select/components.test-pw.tsx b/src/components/select/simple-select/components.test-pw.tsx
index 27eea052b0..c94e8252c2 100644
--- a/src/components/select/simple-select/components.test-pw.tsx
+++ b/src/components/select/simple-select/components.test-pw.tsx
@@ -266,6 +266,60 @@ export const SimpleSelectMultipleColumnsComponent = (
   );
 };
 
+export const SimpleSelectWithActionButtonComponent = () => {
+  const [value, setValue] = useState("");
+  const [isOpen, setIsOpen] = useState(false);
+  const [optionList, setOptionList] = useState([
+    <Option text="Amber" value="amber" key="Amber" />,
+    <Option text="Black" value="black" key="Black" />,
+    <Option text="Blue" value="blue" key="Blue" />,
+    <Option text="Brown" value="brown" key="Brown" />,
+    <Option text="Green" value="green" key="Green" />,
+    <Option text="Amber" value="amber1" key="Amber1" />,
+    <Option text="Black" value="black1" key="Black1" />,
+    <Option text="Blue" value="blue1" key="Blue1" />,
+    <Option text="Brown" value="brown1" key="Brown1" />,
+    <Option text="Green" value="green1" key="Green1" />,
+  ]);
+  function addNew() {
+    const counter = optionList.length.toString();
+    setOptionList((newOptionList) => [
+      ...newOptionList,
+      <Option
+        text={`New${counter}`}
+        value={`val${counter}`}
+        key={`New${counter}`}
+      />,
+    ]);
+    setIsOpen(false);
+    setValue(`val${counter}`);
+  }
+  return (
+    <>
+      <SimpleSelect
+        label="color"
+        value={value}
+        onChange={(event) => setValue(event.target.value)}
+        listActionButton={
+          <Button iconType="add" iconPosition="after">
+            Add a New Element
+          </Button>
+        }
+        onListAction={() => setIsOpen(true)}
+      >
+        {optionList}
+      </SimpleSelect>
+      <Dialog
+        open={isOpen}
+        onCancel={() => setIsOpen(false)}
+        title="Dialog component triggered on action"
+      >
+        <Button onClick={addNew}>Add new</Button>
+      </Dialog>
+    </>
+  );
+};
+
 export const SimpleSelectCustomOptionChildrenComponent = (
   props: Partial<SimpleSelectProps>
 ) => {
@@ -373,6 +427,32 @@ export const SimpleSelectWithLongWrappingTextComponent = () => (
   </Box>
 );
 
+export const SimpleSelectListActionEventComponent = (
+  props: Partial<SimpleSelectProps>
+) => {
+  const [value, setValue] = useState("");
+  return (
+    <SimpleSelect
+      label="color"
+      value={value}
+      labelInline
+      onChange={(event) => setValue(event.target.value)}
+      {...props}
+      listActionButton={
+        <Button iconType="add" iconPosition="after">
+          Add a New Element
+        </Button>
+      }
+    >
+      <Option text="Amber" value="1" />
+      <Option text="Black" value="2" />
+      <Option text="Blue" value="3" />
+      <Option text="Brown" value="4" />
+      <Option text="Green" value="5" />
+    </SimpleSelect>
+  );
+};
+
 export const WithVirtualScrolling = () => (
   <SimpleSelect
     name="Virtualised"
diff --git a/src/components/select/simple-select/simple-select.component.tsx b/src/components/select/simple-select/simple-select.component.tsx
index 5f7f2e9cf5..0e90a0a429 100644
--- a/src/components/select/simple-select/simple-select.component.tsx
+++ b/src/components/select/simple-select/simple-select.component.tsx
@@ -7,6 +7,7 @@ import React, {
 } from "react";
 import invariant from "invariant";
 
+import { ButtonProps } from "../../button";
 import { filterOutStyledSystemSpacingProps } from "../../../style/utils";
 import StyledSelect from "../select.style";
 import SelectTextbox, {
@@ -56,6 +57,8 @@ export interface SimpleSelectProps
   defaultValue?: string | Record<string, unknown>;
   /** If true the loader animation is displayed in the option list */
   isLoading?: boolean;
+  /** True for default text button or a Button Component to be rendered */
+  listActionButton?: boolean | React.ReactElement<ButtonProps>;
   /** When true component will work in multi column mode.
    * Children should consist of OptionRow components in this mode
    */
@@ -64,6 +67,8 @@ export interface SimpleSelectProps
   onListScrollBottom?: () => void;
   /** A custom callback for when the dropdown menu opens */
   onOpen?: () => void;
+  /** A callback for when the Action Button is triggered */
+  onListAction?: () => void;
   /** If true the Component opens on focus */
   openOnFocus?: boolean;
   /** SelectList table header, should consist of multiple th elements.
@@ -126,7 +131,9 @@ export const SimpleSelect = React.forwardRef<
       onKeyDown,
       onBlur,
       isLoading,
+      listActionButton,
       listMaxHeight,
+      onListAction,
       onListScrollBottom,
       tableHeader,
       multiColumn,
@@ -313,6 +320,17 @@ export const SimpleSelect = React.forwardRef<
       }
     }, [value, onChange]);
 
+    useEffect(() => {
+      const hasListActionButton = listActionButton !== undefined;
+      const onListActionMissingMessage =
+        "onListAction prop required when using listActionButton prop";
+
+      invariant(
+        !hasListActionButton || (hasListActionButton && onListAction),
+        onListActionMissingMessage
+      );
+    }, [listActionButton, onListAction]);
+
     useEffect(() => {
       const matchingOption = childOptions.find((child) =>
         isExpectedOption(child, selectedValue)
@@ -369,6 +387,11 @@ export const SimpleSelect = React.forwardRef<
       isMouseDownReported.current = true;
     }
 
+    function handleOnListAction() {
+      setOpenState(false);
+      onListAction?.();
+    }
+
     function handleTextboxBlur(event: React.FocusEvent<HTMLInputElement>) {
       if (isMouseDownReported.current) {
         return;
@@ -436,6 +459,11 @@ export const SimpleSelect = React.forwardRef<
       } = optionData;
       const isClickTriggered = selectionType === "click";
 
+      if (selectionType === "tab") {
+        setOpenState(false);
+        return;
+      }
+
       updateValue(newValue, text, selectionConfirmed);
       setActiveDescendantId(selectedOptionId);
 
@@ -518,7 +546,9 @@ export const SimpleSelect = React.forwardRef<
         onMouseDown={handleListMouseDown}
         onSelectListClose={onSelectListClose}
         highlightedValue={selectedValue}
+        listActionButton={listActionButton}
         listMaxHeight={listMaxHeight}
+        onListAction={handleOnListAction}
         isLoading={isLoading}
         onListScrollBottom={onListScrollBottom}
         tableHeader={tableHeader}
diff --git a/src/components/select/simple-select/simple-select.mdx b/src/components/select/simple-select/simple-select.mdx
index 9c6d0f19a4..2e3e5d7fed 100644
--- a/src/components/select/simple-select/simple-select.mdx
+++ b/src/components/select/simple-select/simple-select.mdx
@@ -96,6 +96,11 @@ In this example the `maxWidth` prop is 100%.
 
 <Canvas of={SimpleSelectStories.WithCustomMaxWidth} />
 
+### With Action Button
+Setting the `listActionButton` prop to `true` renders a default `"Add New Item"` `Button`. However, a custom `Button` component can be passed as the `listActionButton` value via a node.
+We recommend this pattern for loading/adding new options to the `SimpleSelect`.
+<Canvas of={SimpleSelectStories.WithActionButton} />
+
 ### With isLoading prop
 
 When `isLoading` prop is passed, a loader will be appended at the end of the Select List. That functionality could be used to load the options asynchronously.
diff --git a/src/components/select/simple-select/simple-select.pw.tsx b/src/components/select/simple-select/simple-select.pw.tsx
index 0efb533986..1d9831b49a 100644
--- a/src/components/select/simple-select/simple-select.pw.tsx
+++ b/src/components/select/simple-select/simple-select.pw.tsx
@@ -6,11 +6,13 @@ import {
   SimpleSelectWithLazyLoadingComponent,
   SimpleSelectWithInfiniteScrollComponent,
   SimpleSelectMultipleColumnsComponent,
+  SimpleSelectWithActionButtonComponent,
   SimpleSelectObjectAsValueComponent,
   SimpleSelectCustomOptionChildrenComponent,
   SimpleSelectGroupComponent,
   SimpleSelectWithLongWrappingTextComponent,
   SimpleSelectEventsComponent,
+  SimpleSelectListActionEventComponent,
   WithVirtualScrolling,
   SimpleSelectNestedInDialog,
   SelectWithOptionGroupHeader,
@@ -738,6 +740,75 @@ test.describe("SimpleSelect component", () => {
     await expect(thirdColumnElement).toBeVisible();
   });
 
+  test("should render list options with an action button and trigger Dialog on action", async ({
+    mount,
+    page,
+  }) => {
+    await mount(<SimpleSelectWithActionButtonComponent />);
+    await dropdownButton(page).click();
+    await expect(selectListWrapper(page)).toBeVisible();
+    const addElementButtonElement = page.locator('[data-component="button"]');
+    await expect(addElementButtonElement).toBeVisible();
+    await expect(addElementButtonElement).toHaveText("Add a New Element");
+    const iconElement = page.locator('[type="add"]');
+    await expect(iconElement).toBeVisible();
+    await addElementButtonElement.click();
+    await expect(alertDialogPreview(page)).toBeVisible();
+  });
+  test("should render list options with an action button that is visible without scrolling and without affecting the list height", async ({
+    mount,
+    page,
+  }) => {
+    await mount(<SimpleSelectWithActionButtonComponent />);
+    await dropdownButton(page).click();
+    await expect(selectListWrapper(page)).toBeVisible();
+    await expect(page.locator('[data-component="button"]')).toBeInViewport();
+    const selectListHeight = await selectListWrapper(
+      page
+    ).evaluate((wrapperElement) =>
+      parseInt(
+        window.getComputedStyle(wrapperElement).getPropertyValue("height")
+      )
+    );
+    await expect(selectListHeight).toBeGreaterThan(220);
+    await expect(selectListHeight).toBeLessThan(250);
+  });
+  test("when navigating with the keyboard, the selected option is not hidden behind an action button", async ({
+    mount,
+    page,
+  }) => {
+    await mount(<SimpleSelectWithActionButtonComponent />);
+    await dropdownButton(page).click();
+    const inputElement = commonDataElementInputPreview(page);
+    for (let i = 0; i < 5; i++) {
+      // eslint-disable-next-line no-await-in-loop
+      await inputElement.focus();
+      // eslint-disable-next-line no-await-in-loop
+      await inputElement.press("ArrowDown");
+    }
+    await expect(selectOptionByText(page, "Green").nth(0)).toBeInViewport();
+  });
+  test("should add new list option from Add new Dialog", async ({
+    mount,
+    page,
+  }) => {
+    await mount(<SimpleSelectWithActionButtonComponent />);
+    const newOption = "New10";
+    await dropdownButton(page).click();
+    await expect(selectListWrapper(page)).toBeVisible();
+    const addElementButtonElement = page.locator('[data-component="button"]');
+    await expect(addElementButtonElement).toBeVisible();
+    await addElementButtonElement.click();
+    await expect(alertDialogPreview(page)).toBeVisible();
+    await page.waitForTimeout(250);
+    const addNewButtonElement = page.getByRole("button", {
+      name: "Add New",
+    });
+    await expect(addNewButtonElement).toBeVisible();
+    await addNewButtonElement.click();
+    await expect(selectText(page)).toHaveText(newOption);
+  });
+
   ([
     [1, "favourite", "orange"],
     [2, "money_bag", "black"],
@@ -1262,6 +1333,23 @@ test.describe("Check events for SimpleSelect component", () => {
       await expect(callbackCount).toBe(1);
     });
   });
+
+  test("should call onListAction event when the Action Button is clicked", async ({
+    mount,
+    page,
+  }) => {
+    let callbackCount = 0;
+    const callback = () => {
+      callbackCount += 1;
+    };
+    await mount(
+      <SimpleSelectListActionEventComponent onListAction={callback} />
+    );
+
+    await dropdownButton(page).click();
+    await page.locator('[data-component="button"]').click();
+    await expect(callbackCount).toBe(1);
+  });
 });
 
 test.describe("Check virtual scrolling", () => {
@@ -1947,6 +2035,15 @@ test.describe("Accessibility tests for SimpleSelect component", () => {
     await checkAccessibility(page, undefined, "scrollable-region-focusable");
   });
 
+  test("should pass accessibility tests with an action button and trigger Dialog on action", async ({
+    mount,
+    page,
+  }) => {
+    await mount(<SimpleSelectWithActionButtonComponent />);
+    await dropdownButton(page).click();
+    await checkAccessibility(page, undefined, "scrollable-region-focusable");
+  });
+
   test("should pass accessibility tests with virtual scrolling", async ({
     mount,
     page,
diff --git a/src/components/select/simple-select/simple-select.stories.tsx b/src/components/select/simple-select/simple-select.stories.tsx
index ad6384258c..e6430d2697 100644
--- a/src/components/select/simple-select/simple-select.stories.tsx
+++ b/src/components/select/simple-select/simple-select.stories.tsx
@@ -13,6 +13,7 @@ import Icon from "../../icon";
 import CarbonProvider from "../../carbon-provider";
 import Box from "../../box";
 import Typography from "../../typography";
+import Dialog from "../../dialog";
 import generateStyledSystemProps from "../../../../.storybook/utils/styled-system-props";
 
 import SimpleSelect, { SimpleSelectProps } from "./simple-select.component";
@@ -259,6 +260,55 @@ export const WithCustomMaxWidth: Story = () => {
 };
 WithCustomMaxWidth.storyName = "With Custom Max Width";
 
+export const WithActionButton: Story = () => {
+  const [value, setValue] = useState("");
+  const [isOpen, setIsOpen] = useState(false);
+  const [optionList, setOptionList] = useState([
+    <Option text="Amber" value="amber" key="Amber" />,
+    <Option text="Black" value="black" key="Black" />,
+    <Option text="Blue" value="blue" key="Blue" />,
+    <Option text="Brown" value="brown" key="Brown" />,
+    <Option text="Green" value="green" key="Green" />,
+  ]);
+  function addNew() {
+    const counter = optionList.length.toString();
+    setOptionList((previousOptionList) => [
+      ...previousOptionList,
+      <Option
+        text={`New${counter}`}
+        value={`val${counter}`}
+        key={`New${counter}`}
+      />,
+    ]);
+    setIsOpen(false);
+    setValue(`val${counter}`);
+  }
+  return (
+    <Box height={300}>
+      <SimpleSelect
+        name="action"
+        id="action"
+        label="color"
+        value={value}
+        onChange={(event) => setValue(event.target.value)}
+        listActionButton
+        onListAction={() => setIsOpen(true)}
+      >
+        {optionList}
+      </SimpleSelect>
+      <Dialog
+        open={isOpen}
+        onCancel={() => setIsOpen(false)}
+        title="Dialog component triggered on action"
+      >
+        <Button onClick={addNew}>Add a New Element</Button>
+      </Dialog>
+    </Box>
+  );
+};
+WithActionButton.storyName = "With Action Button";
+WithActionButton.parameters = { chromatic: { disableSnapshot: true } };
+
 export const WithIsLoadingProp: Story = () => {
   const preventLoading = useRef(false);
   const [value, setValue] = useState("black");
diff --git a/src/components/select/simple-select/simple-select.test.tsx b/src/components/select/simple-select/simple-select.test.tsx
index e21bc6dcb7..d6325d9dea 100644
--- a/src/components/select/simple-select/simple-select.test.tsx
+++ b/src/components/select/simple-select/simple-select.test.tsx
@@ -701,6 +701,141 @@ test("calls onKeyDown prop with details of the pressed key, when typing a charac
   expect(onKeyDown).toHaveBeenCalledWith(expect.objectContaining({ key: "c" }));
 });
 
+describe("when the `listActionButton` is passed", () => {
+  it("should render the element when the list is open", async () => {
+    render(
+      <SimpleSelect
+        onListAction={() => {}}
+        openOnFocus
+        label="filterable-select"
+        onChange={() => {}}
+        value=""
+        listActionButton={<button type="button">mock button</button>}
+      >
+        <Option value="opt1" text="green" />
+      </SimpleSelect>
+    );
+    screen.getByRole("combobox").focus();
+
+    expect(
+      await screen.findByRole("button", { name: "mock button" })
+    ).toBeVisible();
+  });
+
+  it("should call the `onListAction` callback when the element is clicked", async () => {
+    const onListActionFn = jest.fn();
+    const user = userEvent.setup();
+    render(
+      <SimpleSelect
+        openOnFocus
+        label="filterable-select"
+        onChange={() => {}}
+        value=""
+        listActionButton={<button type="button">mock button</button>}
+        onListAction={onListActionFn}
+      >
+        <Option value="opt1" text="green" />
+      </SimpleSelect>
+    );
+    screen.getByRole("combobox").focus();
+    await user.click(
+      await screen.findByRole("button", { name: "mock button" })
+    );
+
+    expect(onListActionFn).toHaveBeenCalled();
+  });
+
+  it("should focus the element when the user presses the 'Tab' key when the input is focused", async () => {
+    const user = userEvent.setup();
+    render(
+      <SimpleSelect
+        openOnFocus
+        onListAction={() => {}}
+        label="filterable-select"
+        onChange={() => {}}
+        value=""
+        listActionButton={<button type="button">mock button</button>}
+      >
+        <Option value="opt1" text="green" />
+      </SimpleSelect>
+    );
+    screen.getByRole("combobox").focus();
+    await user.tab();
+
+    expect(
+      await screen.findByRole("button", { name: "mock button" })
+    ).toHaveFocus();
+  });
+
+  it("should call the `onListAction` callback when the element is focused and the user presses the 'Enter' key", async () => {
+    const user = userEvent.setup();
+    const onListActionFn = jest.fn();
+    render(
+      <SimpleSelect
+        openOnFocus
+        onListAction={onListActionFn}
+        label="filterable-select"
+        onChange={() => {}}
+        value=""
+        listActionButton={<button type="button">mock button</button>}
+      >
+        <Option value="opt1" text="green" />
+      </SimpleSelect>
+    );
+    screen.getByRole("combobox").focus();
+    await user.tab();
+    await user.keyboard("{Enter}");
+
+    expect(onListActionFn).toHaveBeenCalled();
+  });
+
+  it("should call the `onListAction` callback when the element is focused and the user presses the 'Space' key", async () => {
+    const user = userEvent.setup();
+    const onListActionFn = jest.fn();
+    render(
+      <SimpleSelect
+        openOnFocus
+        onListAction={onListActionFn}
+        label="filterable-select"
+        onChange={() => {}}
+        value=""
+        listActionButton={<button type="button">mock button</button>}
+      >
+        <Option value="opt1" text="green" />
+      </SimpleSelect>
+    );
+    screen.getByRole("combobox").focus();
+    await user.tab();
+    await user.keyboard(" ");
+
+    expect(onListActionFn).toHaveBeenCalled();
+  });
+
+  it("should call the `onSelect` callback when the user presses tab and the action button is focused", async () => {
+    const user = userEvent.setup();
+    const onSelectFn = jest.fn();
+
+    render(
+      <SimpleSelect
+        onSelect={onSelectFn}
+        openOnFocus
+        onListAction={() => {}}
+        label="filterable-select"
+        onChange={() => {}}
+        value=""
+        listActionButton={<button type="button">mock button</button>}
+      >
+        <Option value="opt1" text="green" />
+      </SimpleSelect>
+    );
+    screen.getByRole("combobox").focus();
+    await user.tab();
+    await user.tab();
+
+    expect(onSelectFn).toHaveBeenCalled();
+  });
+});
+
 test("calls onFocus prop when input is focused", async () => {
   const onFocus = jest.fn();
   const user = userEvent.setup();