diff --git a/NEWS b/NEWS
index 2f5bd4626bd..ba942a7196e 100644
--- a/NEWS
+++ b/NEWS
@@ -29,6 +29,8 @@ PHP                                                                        NEWS
 - Streams:
   . Fixed bug GH-8472 (The resource returned by stream_socket_accept may have
     incorrect metadata). (Jakub Zelenka)
+  . Fixed bug GH-8409 (SSL handshake timeout leaves persistent connections
+    hanging). (Jakub Zelenka, Twosee)
 
 04 Aug 2022, PHP 8.0.22
 
diff --git a/ext/standard/tests/streams/gh8409.phpt b/ext/standard/tests/streams/gh8409.phpt
new file mode 100644
index 00000000000..7f0a28b183f
--- /dev/null
+++ b/ext/standard/tests/streams/gh8409.phpt
@@ -0,0 +1,25 @@
+--TEST--
+GH-8409: Error in socket creation when error handler does not clean persistent connection
+--FILE--
+<?php
+set_error_handler(function (int $errno, string $errstring): never {
+    trigger_error($errstring, E_USER_ERROR);
+});
+
+register_shutdown_function(function (): void {
+    foreach (get_resources() as $res) {
+        if (get_resource_type($res) === 'persistent stream') {
+            echo "ERROR: persistent stream not closed\n";
+            return;
+        }
+    }
+    echo "OK: persistent stream closed\n";
+});
+
+stream_socket_client('tcp://9999.9999.9999.9999:9999', $error_code, $error_message, 0.2, STREAM_CLIENT_CONNECT | STREAM_CLIENT_PERSISTENT);
+
+echo "ERROR: this should not be visible\n";
+?>
+--EXPECTF--
+Fatal error: stream_socket_client(): %s in %sgh8409.php on line %d
+OK: persistent stream closed
diff --git a/main/streams/transports.c b/main/streams/transports.c
index fcc3f293300..2e17969b977 100644
--- a/main/streams/transports.c
+++ b/main/streams/transports.c
@@ -61,7 +61,8 @@ PHPAPI php_stream *_php_stream_xport_create(const char *name, size_t namelen, in
 	php_stream_transport_factory factory = NULL;
 	const char *p, *protocol = NULL;
 	size_t n = 0;
-	int failed = 0;
+	bool failed = false;
+	bool bailout = false;
 	zend_string *error_text = NULL;
 	struct timeval default_timeout = { 0, 0 };
 
@@ -132,46 +133,50 @@ PHPAPI php_stream *_php_stream_xport_create(const char *name, size_t namelen, in
 			context STREAMS_REL_CC);
 
 	if (stream) {
-		php_stream_context_set(stream, context);
+		zend_try {
+			php_stream_context_set(stream, context);
 
-		if ((flags & STREAM_XPORT_SERVER) == 0) {
-			/* client */
+			if ((flags & STREAM_XPORT_SERVER) == 0) {
+				/* client */
 
-			if (flags & (STREAM_XPORT_CONNECT|STREAM_XPORT_CONNECT_ASYNC)) {
-				if (-1 == php_stream_xport_connect(stream, name, namelen,
-							flags & STREAM_XPORT_CONNECT_ASYNC ? 1 : 0,
-							timeout, &error_text, error_code)) {
+				if (flags & (STREAM_XPORT_CONNECT|STREAM_XPORT_CONNECT_ASYNC)) {
+					if (-1 == php_stream_xport_connect(stream, name, namelen,
+								flags & STREAM_XPORT_CONNECT_ASYNC ? 1 : 0,
+								timeout, &error_text, error_code)) {
 
-					ERR_RETURN(error_string, error_text, "connect() failed: %s");
+						ERR_RETURN(error_string, error_text, "connect() failed: %s");
 
-					failed = 1;
-				}
-			}
-
-		} else {
-			/* server */
-			if (flags & STREAM_XPORT_BIND) {
-				if (0 != php_stream_xport_bind(stream, name, namelen, &error_text)) {
-					ERR_RETURN(error_string, error_text, "bind() failed: %s");
-					failed = 1;
-				} else if (flags & STREAM_XPORT_LISTEN) {
-					zval *zbacklog = NULL;
-					int backlog = 32;
-
-					if (PHP_STREAM_CONTEXT(stream) && (zbacklog = php_stream_context_get_option(PHP_STREAM_CONTEXT(stream), "socket", "backlog")) != NULL) {
-						backlog = zval_get_long(zbacklog);
+						failed = true;
 					}
+				}
 
-					if (0 != php_stream_xport_listen(stream, backlog, &error_text)) {
-						ERR_RETURN(error_string, error_text, "listen() failed: %s");
-						failed = 1;
+			} else {
+				/* server */
+				if (flags & STREAM_XPORT_BIND) {
+					if (0 != php_stream_xport_bind(stream, name, namelen, &error_text)) {
+						ERR_RETURN(error_string, error_text, "bind() failed: %s");
+						failed = true;
+					} else if (flags & STREAM_XPORT_LISTEN) {
+						zval *zbacklog = NULL;
+						int backlog = 32;
+
+						if (PHP_STREAM_CONTEXT(stream) && (zbacklog = php_stream_context_get_option(PHP_STREAM_CONTEXT(stream), "socket", "backlog")) != NULL) {
+							backlog = zval_get_long(zbacklog);
+						}
+
+						if (0 != php_stream_xport_listen(stream, backlog, &error_text)) {
+							ERR_RETURN(error_string, error_text, "listen() failed: %s");
+							failed = true;
+						}
 					}
 				}
 			}
-		}
+		} zend_catch {
+			bailout = true;
+		} zend_end_try();
 	}
 
-	if (failed) {
+	if (failed || bailout) {
 		/* failure means that they don't get a stream to play with */
 		if (persistent_id) {
 			php_stream_pclose(stream);
@@ -179,6 +184,9 @@ PHPAPI php_stream *_php_stream_xport_create(const char *name, size_t namelen, in
 			php_stream_close(stream);
 		}
 		stream = NULL;
+		if (bailout) {
+			zend_bailout();
+		}
 	}
 
 	return stream;