diff --git a/editor/icons/ToolTransform.svg b/editor/icons/ToolTransform.svg
new file mode 100644
index 00000000000..617a1638dc9
--- /dev/null
+++ b/editor/icons/ToolTransform.svg
@@ -0,0 +1 @@
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diff --git a/editor/scene/3d/node_3d_editor_plugin.cpp b/editor/scene/3d/node_3d_editor_plugin.cpp
index bd840740063..98d6b9f9503 100644
--- a/editor/scene/3d/node_3d_editor_plugin.cpp
+++ b/editor/scene/3d/node_3d_editor_plugin.cpp
@@ -1314,7 +1314,7 @@ bool Node3DEditorViewport::_transform_gizmo_select(const Vector2 &p_screenpos, b
 
 	Transform3D gt = spatial_editor->get_gizmo_transform();
 
-	if (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE) {
+	if (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE) {
 		int col_axis = -1;
 		real_t col_d = 1e20;
 
@@ -1380,7 +1380,7 @@ bool Node3DEditorViewport::_transform_gizmo_select(const Vector2 &p_screenpos, b
 		}
 	}
 
-	if (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_ROTATE) {
+	if (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_ROTATE) {
 		int col_axis = -1;
 		bool view_rotation_selected = false;
 
@@ -2076,7 +2076,7 @@ void Node3DEditorViewport::_sinput(const Ref<InputEvent> &p_event) {
 						clicked = _select_ray(b->get_position());
 
 						if (clicked.is_valid() && !editor_selection->is_selected(ObjectDB::get_instance<Node>(clicked))) {
-							if (!node_selected || (!b->is_alt_pressed() && !(spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT && b->is_command_or_control_pressed()))) {
+							if (!node_selected || (!b->is_alt_pressed() && !(spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM && b->is_command_or_control_pressed()))) {
 								selection_in_progress = true;
 								break;
 							}
@@ -2086,7 +2086,7 @@ void Node3DEditorViewport::_sinput(const Ref<InputEvent> &p_event) {
 							if (node_selected) {
 								TransformMode mode = TRANSFORM_NONE;
 
-								if (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT) {
+								if (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM) {
 									if (b->is_command_or_control_pressed()) {
 										mode = TRANSFORM_ROTATE;
 									} else if (b->is_alt_pressed()) {
@@ -2127,7 +2127,7 @@ void Node3DEditorViewport::_sinput(const Ref<InputEvent> &p_event) {
 						TransformMode mode = TRANSFORM_NONE;
 
 						switch (spatial_editor->get_tool_mode()) {
-							case Node3DEditor::TOOL_MODE_SELECT:
+							case Node3DEditor::TOOL_MODE_TRANSFORM:
 								if (b->is_command_or_control_pressed() && node_selected) {
 									mode = TRANSFORM_ROTATE;
 								} else if (b->is_alt_pressed() && node_selected) {
@@ -2188,13 +2188,13 @@ void Node3DEditorViewport::_sinput(const Ref<InputEvent> &p_event) {
 
 						if (clicked.is_valid() && _edit.mode == TRANSFORM_NONE) {
 							_select_clicked(false);
-						}
-
-						if (cursor.region_select) {
+						} else if (cursor.region_select) {
 							_select_region();
-							cursor.region_select = false;
 							surface->queue_redraw();
 						}
+
+						movement_threshold_passed = false;
+						cursor.region_select = false;
 					}
 
 					if (!_edit.instant && _edit.mode != TRANSFORM_NONE) {
@@ -2306,9 +2306,9 @@ void Node3DEditorViewport::_sinput(const Ref<InputEvent> &p_event) {
 			if (change_nav_from_shortcut != NAVIGATION_NONE) {
 				nav_mode = change_nav_from_shortcut;
 			} else {
-				const bool movement_threshold_passed = _edit.original_mouse_pos.distance_to(_edit.mouse_pos) > 8 * EDSCALE;
+				movement_threshold_passed = _edit.original_mouse_pos.distance_to(_edit.mouse_pos) > 8 * EDSCALE;
 
-				if ((selection_in_progress || clicked_wants_append) && movement_threshold_passed && clicked.is_valid()) {
+				if ((selection_in_progress || clicked_wants_append || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT) && movement_threshold_passed && clicked.is_valid()) {
 					cursor.region_select = true;
 					cursor.region_begin = _edit.original_mouse_pos;
 					clicked = ObjectID();
@@ -2320,8 +2320,8 @@ void Node3DEditorViewport::_sinput(const Ref<InputEvent> &p_event) {
 					return;
 				}
 
-				if (clicked.is_valid() && movement_threshold_passed && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE)) {
-					bool is_select_mode = (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT);
+				if (clicked.is_valid() && movement_threshold_passed && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE)) {
+					bool is_select_mode = (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM);
 					bool is_clicked_selected = editor_selection->is_selected(ObjectDB::get_instance<Node>(clicked));
 
 					if (_edit.mode == TRANSFORM_NONE && (is_select_mode || is_clicked_selected)) {
@@ -3678,7 +3678,7 @@ void Node3DEditorViewport::_draw() {
 		get_theme_stylebox(SNAME("FocusViewport"), EditorStringName(EditorStyles))->draw(surface->get_canvas_item(), r);
 	}
 
-	if (cursor.region_select) {
+	if (cursor.region_select && movement_threshold_passed) {
 		const Rect2 selection_rect = Rect2(cursor.region_begin, cursor.region_end - cursor.region_begin);
 
 		surface->draw_rect(
@@ -4582,7 +4582,7 @@ void Node3DEditorViewport::update_transform_gizmo_view() {
 	bool hide_during_rotation = _is_rotation_arc_visible();
 
 	bool show_gizmo = spatial_editor->is_gizmo_visible() && !_edit.instant && transform_gizmo_visible && !collision_reposition && !hide_during_rotation;
-	bool show_rotate_gizmo = show_gizmo && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_ROTATE);
+	bool show_rotate_gizmo = show_gizmo && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_ROTATE);
 
 	for (int i = 0; i < 3; i++) {
 		Transform3D axis_angle;
@@ -4592,9 +4592,9 @@ void Node3DEditorViewport::update_transform_gizmo_view() {
 		axis_angle.basis.scale(scale);
 		axis_angle.origin = xform.origin;
 		RenderingServer::get_singleton()->instance_set_transform(move_gizmo_instance[i], axis_angle);
-		RenderingServer::get_singleton()->instance_set_visible(move_gizmo_instance[i], show_gizmo && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE));
+		RenderingServer::get_singleton()->instance_set_visible(move_gizmo_instance[i], show_gizmo && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE));
 		RenderingServer::get_singleton()->instance_set_transform(move_plane_gizmo_instance[i], axis_angle);
-		RenderingServer::get_singleton()->instance_set_visible(move_plane_gizmo_instance[i], show_gizmo && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_SELECT || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE));
+		RenderingServer::get_singleton()->instance_set_visible(move_plane_gizmo_instance[i], show_gizmo && (spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_TRANSFORM || spatial_editor->get_tool_mode() == Node3DEditor::TOOL_MODE_MOVE));
 		RenderingServer::get_singleton()->instance_set_transform(rotate_gizmo_instance[i], axis_angle);
 		RenderingServer::get_singleton()->instance_set_visible(rotate_gizmo_instance[i], show_rotate_gizmo);
 		RenderingServer::get_singleton()->instance_set_transform(scale_gizmo_instance[i], axis_angle);
@@ -7355,6 +7355,7 @@ void Node3DEditor::_menu_item_pressed(int p_option) {
 		case MENU_TOOL_MOVE:
 		case MENU_TOOL_ROTATE:
 		case MENU_TOOL_SCALE:
+		case MENU_TOOL_TRANSFORM:
 		case MENU_TOOL_LIST_SELECT: {
 			for (int i = 0; i < TOOL_MAX; i++) {
 				tool_button[i]->set_pressed(i == p_option);
@@ -8843,6 +8844,7 @@ void Node3DEditor::_update_theme() {
 	tool_button[TOOL_MODE_MOVE]->set_button_icon(get_editor_theme_icon(SNAME("ToolMove")));
 	tool_button[TOOL_MODE_ROTATE]->set_button_icon(get_editor_theme_icon(SNAME("ToolRotate")));
 	tool_button[TOOL_MODE_SCALE]->set_button_icon(get_editor_theme_icon(SNAME("ToolScale")));
+	tool_button[TOOL_MODE_TRANSFORM]->set_button_icon(get_editor_theme_icon(SNAME("ToolTransform")));
 	tool_button[TOOL_MODE_LIST_SELECT]->set_button_icon(get_editor_theme_icon(SNAME("ListSelect")));
 	tool_button[TOOL_LOCK_SELECTED]->set_button_icon(get_editor_theme_icon(SNAME("Lock")));
 	tool_button[TOOL_UNLOCK_SELECTED]->set_button_icon(get_editor_theme_icon(SNAME("Unlock")));
@@ -8877,7 +8879,8 @@ void Node3DEditor::_update_theme() {
 void Node3DEditor::_notification(int p_what) {
 	switch (p_what) {
 		case NOTIFICATION_TRANSLATION_CHANGED: {
-			tool_button[TOOL_MODE_SELECT]->set_tooltip_text(keycode_get_string((Key)KeyModifierMask::CMD_OR_CTRL) + TTR("Drag: Rotate selected node around pivot.") + "\n" + TTR("Alt+RMB: Show list of all nodes at position clicked, including locked.") + "\n" + TTR("(Available in all modes.)"));
+			tool_button[TOOL_MODE_SELECT]->set_tooltip_text(TTR("Alt+RMB: Show list of all nodes at position clicked, including locked.") + "\n" + TTR("(Available in all modes.)"));
+			tool_button[TOOL_MODE_TRANSFORM]->set_tooltip_text(keycode_get_string((Key)KeyModifierMask::CMD_OR_CTRL) + TTR("Drag: Rotate selected node around pivot.") + "\n" + TTR("Alt+RMB: Show list of all nodes at position clicked, including locked.") + "\n" + TTR("(Available in all modes.)"));
 			tool_button[TOOL_MODE_MOVE]->set_tooltip_text(keycode_get_string((Key)KeyModifierMask::CMD_OR_CTRL) + TTR("Drag: Use snap.") + "\n" + TTR("Alt+RMB: Show list of all nodes at position clicked, including locked."));
 			tool_button[TOOL_MODE_ROTATE]->set_tooltip_text(keycode_get_string((Key)KeyModifierMask::CMD_OR_CTRL) + TTR("Drag: Use snap.") + "\n" + TTR("Alt+RMB: Show list of all nodes at position clicked, including locked."));
 			tool_button[TOOL_MODE_SCALE]->set_tooltip_text(keycode_get_string((Key)KeyModifierMask::CMD_OR_CTRL) + TTR("Drag: Use snap.") + "\n" + TTR("Alt+RMB: Show list of all nodes at position clicked, including locked."));
@@ -9706,6 +9709,7 @@ Node3DEditor::Node3DEditor() {
 	tool_button[TOOL_MODE_SELECT]->set_shortcut(ED_SHORTCUT("spatial_editor/tool_select", TTRC("Select Mode"), Key::Q, true));
 	tool_button[TOOL_MODE_SELECT]->set_shortcut_context(this);
 	tool_button[TOOL_MODE_SELECT]->set_accessibility_name(TTRC("Select Mode"));
+
 	main_menu_hbox->add_child(memnew(VSeparator));
 
 	tool_button[TOOL_MODE_MOVE] = memnew(Button);
@@ -9739,6 +9743,15 @@ Node3DEditor::Node3DEditor() {
 	tool_button[TOOL_MODE_SCALE]->set_shortcut_context(this);
 	tool_button[TOOL_MODE_SCALE]->set_accessibility_name(TTRC("Scale Mode"));
 
+	tool_button[TOOL_MODE_TRANSFORM] = memnew(Button);
+	main_menu_hbox->add_child(tool_button[TOOL_MODE_TRANSFORM]);
+	tool_button[TOOL_MODE_TRANSFORM]->set_toggle_mode(true);
+	tool_button[TOOL_MODE_TRANSFORM]->set_theme_type_variation(SceneStringName(FlatButton));
+	tool_button[TOOL_MODE_TRANSFORM]->connect(SceneStringName(pressed), callable_mp(this, &Node3DEditor::_menu_item_pressed).bind(MENU_TOOL_TRANSFORM));
+	tool_button[TOOL_MODE_TRANSFORM]->set_shortcut(ED_SHORTCUT("spatial_editor/tool_transform", TTRC("Transform Mode"), Key::V, true));
+	tool_button[TOOL_MODE_TRANSFORM]->set_shortcut_context(this);
+	tool_button[TOOL_MODE_TRANSFORM]->set_accessibility_name(TTRC("Transform Mode"));
+
 	main_menu_hbox->add_child(memnew(VSeparator));
 
 	tool_button[TOOL_MODE_LIST_SELECT] = memnew(Button);
diff --git a/editor/scene/3d/node_3d_editor_plugin.h b/editor/scene/3d/node_3d_editor_plugin.h
index 7989e88da2f..957d7e20d07 100644
--- a/editor/scene/3d/node_3d_editor_plugin.h
+++ b/editor/scene/3d/node_3d_editor_plugin.h
@@ -334,6 +334,7 @@ private:
 	Vector<Node3D *> selection_results_menu;
 	bool clicked_wants_append = false;
 	bool selection_in_progress = false;
+	bool movement_threshold_passed = false;
 
 	PopupMenu *selection_menu = nullptr;
 
@@ -662,6 +663,7 @@ public:
 		TOOL_MODE_MOVE,
 		TOOL_MODE_ROTATE,
 		TOOL_MODE_SCALE,
+		TOOL_MODE_TRANSFORM,
 		TOOL_MODE_LIST_SELECT,
 		TOOL_LOCK_SELECTED,
 		TOOL_UNLOCK_SELECTED,
@@ -762,6 +764,7 @@ private:
 		MENU_TOOL_MOVE,
 		MENU_TOOL_ROTATE,
 		MENU_TOOL_SCALE,
+		MENU_TOOL_TRANSFORM,
 		MENU_TOOL_LIST_SELECT,
 		MENU_TOOL_LOCAL_COORDS,
 		MENU_TOOL_USE_SNAP,