diff --git a/public/app/core/components/NavBar/NavBarItem.test.tsx b/public/app/core/components/NavBar/NavBarItem.test.tsx
index 49a47820b9a..1103f209be5 100644
--- a/public/app/core/components/NavBar/NavBarItem.test.tsx
+++ b/public/app/core/components/NavBar/NavBarItem.test.tsx
@@ -1,8 +1,11 @@
 import React from 'react';
-import { render, screen } from '@testing-library/react';
+import { render, screen, waitFor } from '@testing-library/react';
+import userEvent from '@testing-library/user-event';
 import { BrowserRouter } from 'react-router-dom';
+import { locationUtil } from '@grafana/data';
+import { config, setLocationService } from '@grafana/runtime';
+
 import NavBarItem, { Props } from './NavBarItem';
-import userEvent from '@testing-library/user-event';
 
 const onClickMock = jest.fn();
 const defaults: Props = {
@@ -17,8 +20,13 @@ const defaults: Props = {
   },
 };
 
-function getTestContext(overrides: Partial<Props> = {}) {
+function getTestContext(overrides: Partial<Props> = {}, subUrl = '') {
   jest.clearAllMocks();
+  config.appSubUrl = subUrl;
+  locationUtil.initialize({ config, getTimeRangeForUrl: jest.fn(), getVariablesUrlParams: jest.fn() });
+  const pushMock = jest.fn();
+  const locationService: any = { push: pushMock };
+  setLocationService(locationService);
   const props = { ...defaults, ...overrides };
 
   const { rerender } = render(
@@ -27,7 +35,7 @@ function getTestContext(overrides: Partial<Props> = {}) {
     </BrowserRouter>
   );
 
-  return { rerender };
+  return { rerender, pushMock };
 }
 
 describe('NavBarItem', () => {
@@ -140,5 +148,56 @@ describe('NavBarItem', () => {
         expect(screen.getAllByRole('menuitem')[2]).toHaveAttribute('tabIndex', '-1');
       });
     });
+
+    describe('when appSubUrl is configured and user clicks on menuitem link', () => {
+      it('then location service should be called with correct url', async () => {
+        const { pushMock } = getTestContext(
+          {
+            link: {
+              ...defaults.link,
+              url: 'https://www.grafana.com',
+              children: [{ text: 'New', url: '/grafana/dashboard/new', children: [] }],
+            },
+          },
+          '/grafana'
+        );
+
+        userEvent.hover(screen.getByRole('link'));
+        await waitFor(() => {
+          expect(screen.getByText('Parent Node')).toBeInTheDocument();
+          expect(screen.getByText('New')).toBeInTheDocument();
+        });
+
+        userEvent.click(screen.getByText('New'));
+        await waitFor(() => {
+          expect(pushMock).toHaveBeenCalledTimes(1);
+          expect(pushMock).toHaveBeenCalledWith('/dashboard/new');
+        });
+      });
+    });
+
+    describe('when appSubUrl is not configured and user clicks on menuitem link', () => {
+      it('then location service should be called with correct url', async () => {
+        const { pushMock } = getTestContext({
+          link: {
+            ...defaults.link,
+            url: 'https://www.grafana.com',
+            children: [{ text: 'New', url: '/grafana/dashboard/new', children: [] }],
+          },
+        });
+
+        userEvent.hover(screen.getByRole('link'));
+        await waitFor(() => {
+          expect(screen.getByText('Parent Node')).toBeInTheDocument();
+          expect(screen.getByText('New')).toBeInTheDocument();
+        });
+
+        userEvent.click(screen.getByText('New'));
+        await waitFor(() => {
+          expect(pushMock).toHaveBeenCalledTimes(1);
+          expect(pushMock).toHaveBeenCalledWith('/grafana/dashboard/new');
+        });
+      });
+    });
   });
 });
diff --git a/public/app/core/components/NavBar/NavBarItem.tsx b/public/app/core/components/NavBar/NavBarItem.tsx
index c049451ca70..7304e8a8e8a 100644
--- a/public/app/core/components/NavBar/NavBarItem.tsx
+++ b/public/app/core/components/NavBar/NavBarItem.tsx
@@ -1,7 +1,7 @@
 import React, { ReactNode } from 'react';
 import { Item } from '@react-stately/collections';
 import { css, cx } from '@emotion/css';
-import { GrafanaTheme2, NavMenuItemType, NavModelItem } from '@grafana/data';
+import { GrafanaTheme2, locationUtil, NavMenuItemType, NavModelItem } from '@grafana/data';
 import { IconName, useTheme2 } from '@grafana/ui';
 import { locationService } from '@grafana/runtime';
 
@@ -50,7 +50,7 @@ const NavBarItem = ({
     }
 
     if (!target && url.startsWith('/')) {
-      locationService.push(url);
+      locationService.push(locationUtil.stripBaseFromUrl(url));
     } else {
       window.open(url, target);
     }