diff --git a/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingConfigForm.tsx b/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingConfigForm.tsx
index 382af7eb85..6499bb8055 100644
--- a/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingConfigForm.tsx
+++ b/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingConfigForm.tsx
@@ -1,10 +1,34 @@
-import { Button, Text } from "@appsmith/ads";
-import React, { useCallback, useState } from "react";
+import {
+  Button,
+  Flex,
+  Icon,
+  Menu,
+  MenuContent,
+  MenuGroup,
+  MenuItem,
+  MenuSub,
+  MenuSubContent,
+  MenuSubTrigger,
+  MenuTrigger,
+  Text,
+} from "@appsmith/ads";
+import React, { useCallback, useMemo, useState } from "react";
 import type { FieldArrayFieldsProps } from "redux-form";
 import styled from "styled-components";
 import { v4 as uuid } from "uuid";
-import type { FunctionCallingConfigFormToolField } from "../types";
+import type {
+  FunctionCallingConfigFormToolField,
+  FunctionCallingEntityType,
+  FunctionCallingEntityTypeOption,
+} from "../types";
 import { FunctionCallingConfigToolField } from "./FunctionCallingConfigToolField";
+import { useSelector } from "react-redux";
+import { selectEntityOptions } from "./selectors";
+import { createNewJSCollection } from "actions/jsPaneActions";
+import { queryAddURL } from "ee/RouteBuilder";
+import history from "utils/history";
+import { useDispatch } from "react-redux";
+import { getCurrentPageId } from "selectors/editorSelectors";
 
 export interface FunctionCallingConfigFormProps {
   formName: string;
@@ -29,19 +53,48 @@ export const FunctionCallingConfigForm = ({
   formName,
 }: FunctionCallingConfigFormProps) => {
   const [newlyAddedId, setNewlyAddedId] = useState<string | null>(null);
+  const options = useSelector(selectEntityOptions);
+  const dispatch = useDispatch();
+  const pageId = useSelector(getCurrentPageId);
 
-  const handleAddFunctionButtonClick = useCallback(() => {
-    const id = uuid();
+  // Get existing entity IDs from the agentFunctions, excluding the currently selected value
+  const existingEntityIds = useMemo(() => {
+    const agentFunctionIds = new Set(Object.keys(options.agentFunctions));
 
-    fields.push({
-      id,
-      description: "",
-      entityId: "",
-      isApprovalRequired: false,
-      entityType: "Query",
-    });
-    setNewlyAddedId(id);
-  }, [fields]);
+    return agentFunctionIds;
+  }, [options.agentFunctions]);
+
+  // Filter query items to exclude existing entities
+  const filteredQueryItems = useMemo(() => {
+    return options.Query.filter((item) => !existingEntityIds.has(item.value));
+  }, [options.Query, existingEntityIds]);
+
+  // Filter JS collection items
+  const filteredJSCollections = useMemo(() => {
+    return options.JSCollections.map((collection) => ({
+      ...collection,
+      // Filter out functions that are already used
+      functions: collection.functions.filter(
+        (func) => !existingEntityIds.has(func.value),
+      ),
+    })).filter((collection) => collection.functions.length > 0);
+  }, [options.JSCollections, existingEntityIds]);
+
+  const handleAddFunctionButtonClick = useCallback(
+    (option: FunctionCallingEntityTypeOption) => {
+      const id = uuid();
+
+      fields.push({
+        id,
+        description: "",
+        entityId: option.value,
+        isApprovalRequired: false,
+        entityType: option.optionGroupType as FunctionCallingEntityType,
+      });
+      setNewlyAddedId(id);
+    },
+    [fields],
+  );
 
   const handleRemoveToolButtonClick = useCallback(
     (index: number) => {
@@ -54,17 +107,100 @@ export const FunctionCallingConfigForm = ({
     <>
       <Header>
         <Text isBold kind="heading-s" renderAs="p">
-          Function calls
+          Function Calls
         </Text>
 
-        <Button
-          UNSAFE_width="110px"
-          kind="secondary"
-          onClick={handleAddFunctionButtonClick}
-          startIcon="plus"
-        >
-          Add Function
-        </Button>
+        <Menu>
+          <MenuTrigger>
+            <Button UNSAFE_width="110px" kind="secondary" startIcon="plus">
+              Add Function
+            </Button>
+          </MenuTrigger>
+          <MenuContent align="end" loop width="235px">
+            {/* Create new options */}
+            <MenuGroup>
+              <MenuItem onSelect={() => history.push(queryAddURL({}))}>
+                <Flex alignItems="center" gap="spaces-2">
+                  <Icon name="plus" size="md" />
+                  New Query
+                </Flex>
+              </MenuItem>
+              <MenuItem
+                onSelect={() =>
+                  dispatch(
+                    createNewJSCollection(
+                      pageId,
+                      "AI_QUERY_FUNCTION_CALLING_CONFIG",
+                      "onToolCall",
+                    ),
+                  )
+                }
+              >
+                <Flex alignItems="center" gap="spaces-2">
+                  <Icon name="plus" size="md" />
+                  New JS Object
+                </Flex>
+              </MenuItem>
+            </MenuGroup>
+
+            {/* Query options group */}
+            {options.Query.length > 0 && (
+              <MenuGroup>
+                {filteredQueryItems.map((option) => (
+                  <MenuItem
+                    key={option.value}
+                    onSelect={() => handleAddFunctionButtonClick(option)}
+                  >
+                    <Flex alignItems="center" gap="spaces-2">
+                      {option.icon &&
+                        (typeof option.icon === "string" ? (
+                          <Icon name={option.icon} size="md" />
+                        ) : (
+                          option.icon
+                        ))}
+                      {option.label}
+                    </Flex>
+                  </MenuItem>
+                ))}
+              </MenuGroup>
+            )}
+
+            {/* JS Collections group with nested functions */}
+            {options.JSCollections.length > 0 && (
+              <MenuGroup>
+                <MenuGroup>
+                  {filteredJSCollections.map((collection) => (
+                    <MenuSub key={collection.id}>
+                      <MenuSubTrigger>
+                        <Flex alignItems="center" gap="spaces-2">
+                          {collection.icon &&
+                            (typeof collection.icon === "string" ? (
+                              <Icon name={collection.icon} size="md" />
+                            ) : (
+                              collection.icon
+                            ))}
+                          {collection.name}
+                        </Flex>
+                      </MenuSubTrigger>
+                      <MenuSubContent>
+                        {collection.functions.map((jsFunction) => (
+                          <MenuItem
+                            key={jsFunction.value}
+                            onSelect={() =>
+                              handleAddFunctionButtonClick(jsFunction)
+                            }
+                          >
+                            {jsFunction.label}
+                          </MenuItem>
+                        ))}
+                      </MenuSubContent>
+                    </MenuSub>
+                  ))}
+                </MenuGroup>
+              </MenuGroup>
+            )}
+          </MenuContent>
+        </Menu>
       </Header>
 
       {fields.length > 0 && (
diff --git a/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingMenuField.tsx b/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingMenuField.tsx
index 77f1ac2352..2976404372 100644
--- a/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingMenuField.tsx
+++ b/app/client/src/components/formControls/FunctionCallingConfigControl/components/FunctionCallingMenuField.tsx
@@ -18,12 +18,8 @@ import type {
   FunctionCallingEntityType,
   FunctionCallingEntityTypeOption,
 } from "../types";
-import { useSelector, useDispatch } from "react-redux";
+import { useSelector } from "react-redux";
 import { selectEntityOptions } from "./selectors";
-import history from "utils/history";
-import { queryAddURL } from "ee/RouteBuilder";
-import { createNewJSCollection } from "actions/jsPaneActions";
-import { getCurrentPageId } from "selectors/editorSelectors";
 
 interface FunctionCallingMenuFieldProps {
   children?: React.ReactNode;
@@ -86,9 +82,6 @@ const FunctionCallingMenuFieldRender = (props: FieldRenderProps) => {
   const { autoFocus, children, disabled, input, onValueChange } = props;
   const options = useSelector(selectEntityOptions);
 
-  const dispatch = useDispatch();
-  const pageId = useSelector(getCurrentPageId);
-
   // Get existing entity IDs from the agentFunctions, excluding the currently selected value
   const existingEntityIds = useMemo(() => {
     const agentFunctionIds = new Set(Object.keys(options.agentFunctions));
@@ -166,32 +159,6 @@ const FunctionCallingMenuFieldRender = (props: FieldRenderProps) => {
         </Button>
       </MenuTrigger>
       <MenuContent align="start" loop width="235px">
-        {/* Create new options */}
-        <MenuGroup>
-          <MenuItem onSelect={() => history.push(queryAddURL({}))}>
-            <Flex alignItems="center" gap="spaces-2">
-              <Icon name="plus" size="md" />
-              New Query
-            </Flex>
-          </MenuItem>
-          <MenuItem
-            onSelect={() =>
-              dispatch(
-                createNewJSCollection(
-                  pageId,
-                  "AI_QUERY_FUNCTION_CALLING_CONFIG",
-                  "onToolCall",
-                ),
-              )
-            }
-          >
-            <Flex alignItems="center" gap="spaces-2">
-              <Icon name="plus" size="md" />
-              New JS Object
-            </Flex>
-          </MenuItem>
-        </MenuGroup>
-
         {/* Query options group */}
         {filteredQueryItems.length > 0 && (
           <MenuGroup>