diff --git a/packages/block-library/src/navigation/edit/index.js b/packages/block-library/src/navigation/edit/index.js
index b44a5ef142777..48d1bd708b67b 100644
--- a/packages/block-library/src/navigation/edit/index.js
+++ b/packages/block-library/src/navigation/edit/index.js
@@ -319,6 +319,15 @@ function Navigation( {
 											setNavigationMenuId( id );
 											onClose();
 										} }
+										onCreateNew={ () => {
+											if ( navigationArea ) {
+												setAreaMenu( 0 );
+											}
+											setAttributes( {
+												navigationMenuId: undefined,
+											} );
+											setIsPlaceholderShown( true );
+										} }
 									/>
 								) }
 							</ToolbarDropdownMenu>
diff --git a/packages/block-library/src/navigation/edit/navigation-menu-selector.js b/packages/block-library/src/navigation/edit/navigation-menu-selector.js
index c696019cd2b7e..f915fb268e3fe 100644
--- a/packages/block-library/src/navigation/edit/navigation-menu-selector.js
+++ b/packages/block-library/src/navigation/edit/navigation-menu-selector.js
@@ -1,34 +1,42 @@
 /**
  * WordPress dependencies
  */
-import { MenuGroup, MenuItemsChoice } from '@wordpress/components';
+import { MenuGroup, MenuItem, MenuItemsChoice } from '@wordpress/components';
 import { useEntityId } from '@wordpress/core-data';
+import { __ } from '@wordpress/i18n';
 
 /**
  * Internal dependencies
  */
 import useNavigationMenu from '../use-navigation-menu';
 
-export default function NavigationMenuSelector( { onSelect } ) {
+export default function NavigationMenuSelector( { onSelect, onCreateNew } ) {
 	const { navigationMenus } = useNavigationMenu();
 	const navigationMenuId = useEntityId( 'postType', 'wp_navigation' );
 
 	return (
-		<MenuGroup>
-			<MenuItemsChoice
-				value={ navigationMenuId }
-				onSelect={ ( selectedId ) =>
-					onSelect(
-						navigationMenus.find(
-							( post ) => post.id === selectedId
+		<>
+			<MenuGroup>
+				<MenuItemsChoice
+					value={ navigationMenuId }
+					onSelect={ ( selectedId ) =>
+						onSelect(
+							navigationMenus.find(
+								( post ) => post.id === selectedId
+							)
 						)
-					)
-				}
-				choices={ navigationMenus.map( ( { id, title } ) => ( {
-					value: id,
-					label: title.rendered,
-				} ) ) }
-			/>
-		</MenuGroup>
+					}
+					choices={ navigationMenus.map( ( { id, title } ) => ( {
+						value: id,
+						label: title.rendered,
+					} ) ) }
+				/>
+			</MenuGroup>
+			<MenuGroup>
+				<MenuItem onClick={ onCreateNew }>
+					{ __( 'Create new menu' ) }
+				</MenuItem>
+			</MenuGroup>
+		</>
 	);
 }