diff --git a/packages/dashboard-frontend/src/pages/Loader/Workspace/__mocks__/index.tsx b/packages/dashboard-frontend/src/pages/Loader/Workspace/__mocks__/index.tsx
index 26159fdf39..310627558b 100644
--- a/packages/dashboard-frontend/src/pages/Loader/Workspace/__mocks__/index.tsx
+++ b/packages/dashboard-frontend/src/pages/Loader/Workspace/__mocks__/index.tsx
@@ -13,7 +13,7 @@
 import React from 'react';
 import { Props, State } from '..';
 
-export class WorkspaceLoaderPage extends React.PureComponent<Props, State> {
+export default class WorkspaceLoaderPage extends React.PureComponent<Props, State> {
   render(): React.ReactNode {
     const { alertItem, currentStepId, steps, onRestart } = this.props;
     const wizardSteps = steps.map(step => (
diff --git a/packages/dashboard-frontend/src/pages/Loader/Workspace/__tests__/index.spec.tsx b/packages/dashboard-frontend/src/pages/Loader/Workspace/__tests__/index.spec.tsx
index cd45f0f1b8..cfe39fccf2 100644
--- a/packages/dashboard-frontend/src/pages/Loader/Workspace/__tests__/index.spec.tsx
+++ b/packages/dashboard-frontend/src/pages/Loader/Workspace/__tests__/index.spec.tsx
@@ -11,7 +11,7 @@
  */
 
 import React from 'react';
-import { screen } from '@testing-library/react';
+import { screen, waitFor, within } from '@testing-library/react';
 import userEvent from '@testing-library/user-event';
 import { AlertVariant } from '@patternfly/react-core';
 import WorkspaceLoaderPage from '..';
@@ -25,6 +25,10 @@ import getComponentRenderer from '../../../../services/__mocks__/getComponentRen
 import { Provider } from 'react-redux';
 import { Store } from 'redux';
 import { FakeStoreBuilder } from '../../../../store/__mocks__/storeBuilder';
+import { DevWorkspaceBuilder } from '../../../../store/__mocks__/devWorkspaceBuilder';
+import { Workspace, WorkspaceAdapter } from '../../../../services/workspace-adapter';
+import { RunningWorkspacesExceededError } from '../../../../store/Workspaces/devWorkspaces';
+import { DevWorkspace } from '../../../../services/devfileApi/devWorkspace';
 
 jest.mock('react-tooltip', () => {
   return function DummyTooltip(): React.ReactElement {
@@ -99,6 +103,160 @@ describe('Workspace loader page', () => {
 
     expect(activeTab?.textContent).toEqual(LoaderTab.Logs.toString());
   });
+
+  describe('workspaces runningLimit has been reached', () => {
+    let startedWorkspace1: DevWorkspace;
+    let startedWorkspace2: DevWorkspace;
+    let stoppedWorkspace: DevWorkspace;
+    let currentWorkspace: DevWorkspace;
+
+    beforeEach(() => {
+      const namespace = 'user-che';
+
+      startedWorkspace1 = new DevWorkspaceBuilder()
+        .withName('bash')
+        .withNamespace(namespace)
+        .withMetadata({ uid: 'uid-bash' })
+        .build();
+      startedWorkspace1.spec.started = true;
+
+      startedWorkspace2 = new DevWorkspaceBuilder()
+        .withName('python-hello-world')
+        .withNamespace(namespace)
+        .withMetadata({ uid: 'uid-python-hello-world' })
+        .build();
+      startedWorkspace2.spec.started = true;
+
+      stoppedWorkspace = new DevWorkspaceBuilder()
+        .withName('nodejs-web-app')
+        .withNamespace(namespace)
+        .withMetadata({ uid: 'uid-nodejs-web-app' })
+        .build();
+
+      currentWorkspace = new DevWorkspaceBuilder()
+        .withName('golang-example')
+        .withNamespace(namespace)
+        .withMetadata({ uid: 'uid-golang-example' })
+        .build();
+    });
+
+    it('should show options if workspace running limit has been reached, and there is only one running workspace', () => {
+      const alertItem: AlertItem = {
+        key: 'alert-id',
+        title:
+          'Failed to start the workspace golang-example, reason: You are not allowed to start more workspaces.',
+        variant: AlertVariant.danger,
+        error: new RunningWorkspacesExceededError('You are not allowed to start more workspaces.'),
+      };
+
+      const store = new FakeStoreBuilder()
+        .withDevWorkspaces({
+          workspaces: [startedWorkspace1, stoppedWorkspace, currentWorkspace],
+        })
+        .build();
+
+      renderComponent(
+        { steps: steps.values, alertItem, workspace: new WorkspaceAdapter(currentWorkspace) },
+        store,
+      );
+
+      const alert = screen.getByTestId('action-links');
+      const buttons = within(alert).getAllByRole('button');
+      expect(buttons.length).toEqual(2);
+      expect(buttons[0].textContent).toEqual('Switch to running workspace (bash)');
+      expect(buttons[1].textContent).toEqual(
+        'Close running workspace (bash) and restart golang-example',
+      );
+    });
+
+    it('should switch to running workspace when there is only one running workspace and button clicked', async () => {
+      createWindowMock({
+        href: 'https://che-host/dashboard/#/ide/user-che/golang-example',
+        origin: 'https://che-host',
+      });
+      window.open = jest.fn();
+      window.location.href = 'asdfsadf';
+
+      const alertItem: AlertItem = {
+        key: 'alert-id',
+        title:
+          'Failed to start the workspace golang-example, reason: You are not allowed to start more workspaces.',
+        variant: AlertVariant.danger,
+        error: new RunningWorkspacesExceededError('You are not allowed to start more workspaces.'),
+      };
+
+      const store = new FakeStoreBuilder()
+        .withDevWorkspaces({
+          workspaces: [startedWorkspace1, stoppedWorkspace, currentWorkspace],
+        })
+        .build();
+
+      renderComponent(
+        { steps: steps.values, alertItem, workspace: new WorkspaceAdapter(currentWorkspace) },
+        store,
+      );
+
+      const alert = screen.getByTestId('action-links');
+      const buttons = within(alert).getAllByRole('button');
+      expect(buttons.length).toEqual(2);
+      expect(buttons[0].textContent).toEqual('Switch to running workspace (bash)');
+
+      userEvent.click(buttons[0]);
+      await waitFor(() =>
+        expect(window.open).toHaveBeenCalledWith(
+          'https://che-host/dashboard/#/ide/user-che/bash',
+          'uid-bash',
+        ),
+      );
+    });
+
+    it('should show options if workspace running limit has been reached, and there more than one running workspaces', async () => {
+      createWindowMock({ origin: 'https://che-host' });
+
+      const alertItem: AlertItem = {
+        key: 'alert-id',
+        title:
+          'Failed to start the workspace golang-example, reason: You are not allowed to start more workspaces.',
+        variant: AlertVariant.danger,
+        error: new RunningWorkspacesExceededError('You are not allowed to start more workspaces.'),
+      };
+
+      const store = new FakeStoreBuilder()
+        .withDevWorkspaces({
+          workspaces: [startedWorkspace1, startedWorkspace2, stoppedWorkspace, currentWorkspace],
+        })
+        .build();
+
+      const spyWindowLocation = jest.spyOn(window.location, 'href', 'set');
+
+      renderComponent(
+        { steps: steps.values, alertItem, workspace: new WorkspaceAdapter(currentWorkspace) },
+        store,
+      );
+
+      const button = screen.getByRole('button', { name: 'Return to dashboard' });
+      userEvent.click(button);
+      await waitFor(() =>
+        expect(spyWindowLocation).toHaveBeenCalledWith('https://che-host/dashboard/'),
+      );
+    });
+  });
+
+  function createWindowMock(location: { href?: string; origin?: string }) {
+    delete (window as any).location;
+    (window.location as any) = {
+      origin: location.origin,
+    };
+    Object.defineProperty(window.location, 'href', {
+      set: () => {
+        // no-op
+      },
+      get: () => {
+        return location.href;
+      },
+      configurable: true,
+    });
+  }
 });
 
 function getComponent(
@@ -106,6 +264,7 @@ function getComponent(
     steps: LoaderStep[];
     initialTab?: keyof typeof LoaderTab;
     alertItem?: AlertItem;
+    workspace?: Workspace;
   },
   store?: Store,
 ): React.ReactElement {
@@ -121,7 +280,7 @@ function getComponent(
         onRestart={mockOnWorkspaceRestart}
         steps={props.steps}
         tabParam={'Progress'}
-        workspace={undefined}
+        workspace={props.workspace}
       />
     </Provider>
   );