diff --git a/app/assets/javascripts/project_select_combo_button.js b/app/assets/javascripts/project_select_combo_button.js
index 46a26fb91f4..99cea683d9a 100644
--- a/app/assets/javascripts/project_select_combo_button.js
+++ b/app/assets/javascripts/project_select_combo_button.js
@@ -14,7 +14,14 @@ export default class ProjectSelectComboButton {
 
   bindEvents() {
     this.projectSelectInput.siblings('.new-project-item-select-button')
-      .on('click', this.openDropdown);
+      .on('click', e => this.openDropdown(e));
+
+    this.newItemBtn.on('click', (e) => {
+      if (!this.getProjectFromLocalStorage()) {
+        e.preventDefault();
+        this.openDropdown(e);
+      }
+    });
 
     this.projectSelectInput.on('change', () => this.selectProject());
   }
@@ -28,8 +35,9 @@ export default class ProjectSelectComboButton {
     }
   }
 
-  openDropdown() {
-    $(this).siblings('.project-item-select').select2('open');
+  // eslint-disable-next-line class-methods-use-this
+  openDropdown(event) {
+    $(event.currentTarget).siblings('.project-item-select').select2('open');
   }
 
   selectProject() {
@@ -56,10 +64,8 @@ export default class ProjectSelectComboButton {
     if (project) {
       this.newItemBtn.attr('href', project.url);
       this.newItemBtn.text(`${this.formattedText.defaultTextPrefix} in ${project.name}`);
-      this.newItemBtn.enable();
     } else {
       this.newItemBtn.text(`Select project to create ${this.formattedText.presetTextSuffix}`);
-      this.newItemBtn.disable();
     }
   }
 
diff --git a/changelogs/unreleased/37179-dashboard-project-dropdown.yml b/changelogs/unreleased/37179-dashboard-project-dropdown.yml
new file mode 100644
index 00000000000..3ef080b8eae
--- /dev/null
+++ b/changelogs/unreleased/37179-dashboard-project-dropdown.yml
@@ -0,0 +1,5 @@
+---
+title: Removes disabled state from dashboard project button
+merge_request:
+author:
+type: fixed
diff --git a/spec/javascripts/project_select_combo_button_spec.js b/spec/javascripts/project_select_combo_button_spec.js
index 021804e0769..dda83645c92 100644
--- a/spec/javascripts/project_select_combo_button_spec.js
+++ b/spec/javascripts/project_select_combo_button_spec.js
@@ -32,11 +32,6 @@ describe('Project Select Combo Button', function () {
       this.comboButton = new ProjectSelectComboButton(this.projectSelectInput);
     });
 
-    it('newItemBtn is disabled', function () {
-      expect(this.newItemBtn.hasAttribute('disabled')).toBe(true);
-      expect(this.newItemBtn.classList.contains('disabled')).toBe(true);
-    });
-
     it('newItemBtn href is null', function () {
       expect(this.newItemBtn.getAttribute('href')).toBe('');
     });
@@ -53,11 +48,6 @@ describe('Project Select Combo Button', function () {
       this.comboButton = new ProjectSelectComboButton(this.projectSelectInput);
     });
 
-    it('newItemBtn is not disabled', function () {
-      expect(this.newItemBtn.hasAttribute('disabled')).toBe(false);
-      expect(this.newItemBtn.classList.contains('disabled')).toBe(false);
-    });
-
     it('newItemBtn href is correctly set', function () {
       expect(this.newItemBtn.getAttribute('href')).toBe(this.defaults.projectMeta.url);
     });
@@ -82,11 +72,6 @@ describe('Project Select Combo Button', function () {
         .trigger('change');
     });
 
-    it('newItemBtn is not disabled', function () {
-      expect(this.newItemBtn.hasAttribute('disabled')).toBe(false);
-      expect(this.newItemBtn.classList.contains('disabled')).toBe(false);
-    });
-
     it('newItemBtn href is correctly set', function () {
       expect(this.newItemBtn.getAttribute('href'))
         .toBe('http://myothercoolproject.com/issues/new');