diff --git a/controllers/nstemplateset/nstemplateset_controller.go b/controllers/nstemplateset/nstemplateset_controller.go
index 888423df..783afd17 100644
--- a/controllers/nstemplateset/nstemplateset_controller.go
+++ b/controllers/nstemplateset/nstemplateset_controller.go
@@ -200,6 +200,17 @@ func (r *Reconciler) deleteNSTemplateSet(ctx context.Context, nsTmplSet *toolcha
 	}
 	spacename := nsTmplSet.GetName()
 
+	// delete cluster resources first
+	err := r.clusterResources.delete(ctx, nsTmplSet)
+	if err != nil {
+		return reconcile.Result{}, err
+	}
+
+	// clear the ClusterResources status after successful deletion
+	if err := r.status.clearStatusClusterResources(ctx, nsTmplSet); err != nil {
+		return reconcile.Result{}, r.status.wrapErrorWithStatusUpdate(ctx, nsTmplSet, r.status.setStatusTerminatingFailed, err, "failed to clear ClusterResources status")
+	}
+
 	// delete all namespace one by one
 	allDeleted, err := r.namespaces.ensureDeleted(ctx, nsTmplSet)
 	// when err, status Update will not trigger reconcile, sending returning error.
@@ -216,12 +227,6 @@ func (r *Reconciler) deleteNSTemplateSet(ctx context.Context, nsTmplSet *toolcha
 		}, nil
 	}
 
-	// if no namespace was to be deleted, then we can proceed with the cluster resources associated with the user
-	err = r.clusterResources.delete(ctx, nsTmplSet)
-	if err != nil {
-		return reconcile.Result{}, err
-	}
-
 	// if nothing was to be deleted, then we can remove the finalizer and we're done
 	logger.Info("NSTemplateSet resource is ready to be terminated: all related user namespaces have been marked for deletion")
 	util.RemoveFinalizer(nsTmplSet, toolchainv1alpha1.FinalizerName)
diff --git a/controllers/nstemplateset/nstemplateset_controller_test.go b/controllers/nstemplateset/nstemplateset_controller_test.go
index 7f9bccba..a5730cbd 100644
--- a/controllers/nstemplateset/nstemplateset_controller_test.go
+++ b/controllers/nstemplateset/nstemplateset_controller_test.go
@@ -1162,7 +1162,8 @@ func TestDeleteNSTemplateSet(t *testing.T) {
 			AssertThatNamespace(t, firstNSName, r.Client).DoesNotExist()
 			// get the NSTemplateSet resource again and check its status
 			AssertThatNSTemplateSet(t, namespaceName, spacename, r.Client).
-				HasFinalizer(). // the finalizer should NOT have been removed yet
+				HasFinalizer().                 // the finalizer should NOT have been removed yet
+				HasStatusClusterResourcesNil(). // the cluster resources status should be cleared
 				HasConditions(Terminating())
 
 			t.Run("reconcile after first user namespace deletion triggers deletion of the second namespace", func(t *testing.T) {
@@ -1214,6 +1215,28 @@ func TestDeleteNSTemplateSet(t *testing.T) {
 		require.EqualError(t, err, "failed to delete cluster resource 'for-johnsmith': mock error")
 		require.Equal(t, controllerruntime.Result{}, result)
 	})
+	t.Run("failed to clear cluster resources status", func(t *testing.T) {
+		// given an NSTemplateSet resource with cluster resources
+		nsTmplSet := newNSTmplSet(namespaceName, spacename, "advanced", withDeletionTs(), withClusterResources("abcde11"), withStatusClusterResources("abcde11"))
+		crq := newClusterResourceQuota(spacename, "advanced")
+		r, fakeClient := prepareController(t, nsTmplSet, crq)
+		req := newReconcileRequest(namespaceName, spacename)
+
+		// mock status update failure for clearing cluster resources
+		fakeClient.MockStatusUpdate = func(ctx context.Context, obj client.Object, opts ...client.SubResourceUpdateOption) error {
+			if nsTmplSet, ok := obj.(*toolchainv1alpha1.NSTemplateSet); ok && nsTmplSet.Status.ClusterResources == nil {
+				return fmt.Errorf("mock status update error")
+			}
+			return fakeClient.Client.Status().Update(ctx, obj, opts...)
+		}
+
+		// when reconcile is triggered
+		result, err := r.Reconcile(context.TODO(), req)
+
+		// then
+		require.EqualError(t, err, "failed to clear ClusterResources status: mock status update error")
+		require.Equal(t, controllerruntime.Result{}, result)
+	})
 
 	t.Run("NSTemplateSet deletion errors when namespace is not deleted in 1 min", func(t *testing.T) {
 		// given an NSTemplateSet resource and 1 active user namespaces ("dev")
diff --git a/controllers/nstemplateset/status.go b/controllers/nstemplateset/status.go
index c4f5c2fd..76dbdfa1 100644
--- a/controllers/nstemplateset/status.go
+++ b/controllers/nstemplateset/status.go
@@ -290,3 +290,12 @@ func (r *statusManager) setStatusTerminatingFailed(ctx context.Context, nsTmplSe
 			Message: message,
 		})
 }
+
+// clearStatusClusterResources sets the ClusterResources status to nil
+func (r *statusManager) clearStatusClusterResources(ctx context.Context, nsTmplSet *toolchainv1alpha1.NSTemplateSet) error {
+	if nsTmplSet.Status.ClusterResources != nil {
+		nsTmplSet.Status.ClusterResources = nil
+		return r.Client.Status().Update(ctx, nsTmplSet)
+	}
+	return nil
+}