diff --git a/changelogs/fragments/7636.yml b/changelogs/fragments/7636.yml
new file mode 100644
index 00000000000..e154dc07a59
--- /dev/null
+++ b/changelogs/fragments/7636.yml
@@ -0,0 +1,2 @@
+fix:
+- [Workspace] Move set default source order to avoid dev server crash ([#7636](https://github.com/opensearch-project/OpenSearch-Dashboards/pull/7636))
\ No newline at end of file
diff --git a/src/plugins/workspace/server/workspace_client.test.ts b/src/plugins/workspace/server/workspace_client.test.ts
index 4339d938034..f6e341603aa 100644
--- a/src/plugins/workspace/server/workspace_client.test.ts
+++ b/src/plugins/workspace/server/workspace_client.test.ts
@@ -181,6 +181,24 @@ describe('#WorkspaceClient', () => {
     expect(mockCheckAndSetDefaultDataSource).toHaveBeenCalledWith(uiSettingsClient, ['id1'], true);
   });
 
+  it('update# should log error when failed set default data source', async () => {
+    const client = new WorkspaceClient(coreSetup, logger);
+    await client.setup(coreSetup);
+    client?.setSavedObjects(savedObjects);
+    client?.setUiSettings(uiSettings);
+    mockCheckAndSetDefaultDataSource.mockRejectedValueOnce(new Error());
+
+    await client.update(mockRequestDetail, mockWorkspaceId, {
+      name: mockWorkspaceName,
+      permissions: {},
+      dataSources: ['id1'],
+    });
+
+    expect(logger.error).toHaveBeenLastCalledWith(
+      'Set default data source error during workspace updating'
+    );
+  });
+
   it('delete# should unassign data source before deleting related saved objects', async () => {
     const client = new WorkspaceClient(coreSetup, logger);
     await client.setup(coreSetup);
diff --git a/src/plugins/workspace/server/workspace_client.ts b/src/plugins/workspace/server/workspace_client.ts
index 7cc8bcec6ba..06476f5e23d 100644
--- a/src/plugins/workspace/server/workspace_client.ts
+++ b/src/plugins/workspace/server/workspace_client.ts
@@ -220,7 +220,7 @@ export class WorkspaceClient implements IWorkspaceClientImpl {
     const { permissions, dataSources: newDataSources, ...attributes } = payload;
     try {
       const client = this.getSavedObjectClientsFromRequestDetail(requestDetail);
-      const workspaceInDB: SavedObject<WorkspaceAttribute> = await client.get(WORKSPACE_TYPE, id);
+      let workspaceInDB: SavedObject<WorkspaceAttribute> = await client.get(WORKSPACE_TYPE, id);
       if (workspaceInDB.attributes.name !== attributes.name) {
         const existingWorkspaceRes = await this.getScopedClientWithoutPermission(
           requestDetail
@@ -265,6 +265,22 @@ export class WorkspaceClient implements IWorkspaceClientImpl {
         }
       }
 
+      /**
+       * When the workspace owner unassign themselves, ensure the default data source is set before
+       * updating the workspace permissions. This prevents a lack of write permission on saved objects
+       * after the user is removed from the workspace.
+       **/
+      if (newDataSources && this.uiSettings && client) {
+        const uiSettingsClient = this.uiSettings.asScopedToClient(client);
+        try {
+          await checkAndSetDefaultDataSource(uiSettingsClient, newDataSources, true);
+          // Doc version may changed after default data source updated.
+          workspaceInDB = await client.get(WORKSPACE_TYPE, id);
+        } catch (error) {
+          this.logger.error('Set default data source error during workspace updating');
+        }
+      }
+
       await client.create<Omit<WorkspaceAttribute, 'id'>>(
         WORKSPACE_TYPE,
         { ...workspaceInDB.attributes, ...attributes },
@@ -276,11 +292,6 @@ export class WorkspaceClient implements IWorkspaceClientImpl {
         }
       );
 
-      if (newDataSources && this.uiSettings && client) {
-        const uiSettingsClient = this.uiSettings.asScopedToClient(client);
-        checkAndSetDefaultDataSource(uiSettingsClient, newDataSources, true);
-      }
-
       return {
         success: true,
         result: true,