diff --git a/extension/k8sleaderelector/README.md b/extension/k8sleaderelector/README.md
index 72867d6a0887..fe66317397dd 100644
--- a/extension/k8sleaderelector/README.md
+++ b/extension/k8sleaderelector/README.md
@@ -42,4 +42,26 @@ service:
 | **lease_namespace** | The namespace of the lease object.                                            | none (required) |
 | **lease_duration**  | The duration of the lease.                                                    | 15s             |
 | **renew_deadline**  | The deadline for renewing the lease. It must be less than the lease duration. | 10s             |
-| **retry_period**    | The period for retrying the leader election.                                  | 2s              |
\ No newline at end of file
+| **retry_period**    | The period for retrying the leader election.                                  | 2s              |
+
+### Suggested RBAC
+```yaml
+apiVersion: rbac.authorization.k8s.io/v1
+kind: Role
+metadata:
+  name: my-lease
+  namespace: default
+rules:
+- apiGroups:
+  - coordination.k8s.io
+  resources:
+  - leases
+  verbs:
+  - get
+  - list
+  - watch
+  - create
+  - update
+  - patch
+  - delete
+```
\ No newline at end of file
diff --git a/extension/k8sleaderelector/extension.go b/extension/k8sleaderelector/extension.go
index 49fb4ce25f79..c643a3470822 100644
--- a/extension/k8sleaderelector/extension.go
+++ b/extension/k8sleaderelector/extension.go
@@ -5,6 +5,7 @@ package k8sleaderelector // import "github.com/open-telemetry/opentelemetry-coll
 
 import (
 	"context"
+	"sync"
 
 	"go.opentelemetry.io/collector/component"
 	"go.opentelemetry.io/collector/extension"
@@ -36,17 +37,64 @@ type leaderElectionExtension struct {
 	client        kubernetes.Interface
 	logger        *zap.Logger
 	leaseHolderID string
+	cancel        context.CancelFunc
+	waitGroup     sync.WaitGroup
 
 	onStartedLeading []StartCallback
 	onStoppedLeading []StopCallback
 }
 
+// If the receiver sets a callback function then it would be invoked when the leader wins the election
+func (lee *leaderElectionExtension) startedLeading(ctx context.Context) {
+	for _, callback := range lee.onStartedLeading {
+		callback(ctx)
+	}
+}
+
+// If the receiver sets a callback function then it would be invoked when the leader loss the election
+func (lee *leaderElectionExtension) stoppedLeading() {
+	for _, callback := range lee.onStoppedLeading {
+		callback()
+	}
+}
+
 // Start begins the extension's processing.
 func (lee *leaderElectionExtension) Start(_ context.Context, _ component.Host) error {
+	lee.logger.Info("Starting k8s leader elector with UUID", zap.String("UUID", lee.leaseHolderID))
+
+	ctx := context.Background()
+	ctx, lee.cancel = context.WithCancel(ctx)
+	// Create the K8s leader elector
+	leaderElector, err := newK8sLeaderElector(lee.config, lee.client, lee.startedLeading, lee.stoppedLeading, lee.leaseHolderID)
+	if err != nil {
+		lee.logger.Error("Failed to create k8s leader elector", zap.Error(err))
+		return err
+	}
+	lee.waitGroup.Add(1)
+	go func() {
+		// Leader election loop stops if context is canceled or the leader elector loses the lease.
+		// The loop allows continued participation in leader election, even if the lease is lost.
+		defer lee.waitGroup.Done()
+		for {
+			leaderElector.Run(ctx)
+
+			if ctx.Err() != nil {
+				break
+			}
+
+			lee.logger.Info("Leader lease lost. Returning to standby mode...")
+		}
+	}()
+
 	return nil
 }
 
 // Shutdown ends the extension's processing.
 func (lee *leaderElectionExtension) Shutdown(context.Context) error {
+	lee.logger.Info("Stopping k8s leader elector with UUID", zap.String("UUID", lee.leaseHolderID))
+	if lee.cancel != nil {
+		lee.cancel()
+	}
+	lee.waitGroup.Wait()
 	return nil
 }
diff --git a/extension/k8sleaderelector/extension_test.go b/extension/k8sleaderelector/extension_test.go
new file mode 100644
index 000000000000..baa5ea5887bd
--- /dev/null
+++ b/extension/k8sleaderelector/extension_test.go
@@ -0,0 +1,74 @@
+// Copyright The OpenTelemetry Authors
+// SPDX-License-Identifier: Apache-2.0
+
+package k8sleaderelector
+
+import (
+	"context"
+	"fmt"
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/require"
+	"go.opentelemetry.io/collector/component/componenttest"
+	"go.uber.org/zap"
+	"go.uber.org/zap/zaptest/observer"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/client-go/kubernetes"
+	"k8s.io/client-go/kubernetes/fake"
+	"k8s.io/utils/ptr"
+
+	"github.com/open-telemetry/opentelemetry-collector-contrib/internal/k8sconfig"
+)
+
+func TestExtension(t *testing.T) {
+	config := &Config{
+		LeaseName:      "foo",
+		LeaseNamespace: "default",
+		LeaseDuration:  15 * time.Second,
+		RenewDuration:  10 * time.Second,
+		RetryPeriod:    2 * time.Second,
+	}
+
+	iamInvokedOnLeading := false
+
+	ctx := context.TODO()
+	fakeClient := fake.NewClientset()
+	config.makeClient = func(_ k8sconfig.APIConfig) (kubernetes.Interface, error) {
+		return fakeClient, nil
+	}
+
+	observedZapCore, _ := observer.New(zap.WarnLevel)
+
+	leaderElection := leaderElectionExtension{
+		config:        config,
+		client:        fakeClient,
+		logger:        zap.New(observedZapCore),
+		leaseHolderID: "foo",
+	}
+
+	leaderElection.SetCallBackFuncs(
+		func(_ context.Context) {
+			iamInvokedOnLeading = true
+			fmt.Printf("LeaderElection started leading")
+		},
+		func() {
+			fmt.Printf("LeaderElection stopped leading")
+		},
+	)
+
+	require.NoError(t, leaderElection.Start(ctx, componenttest.NewNopHost()))
+
+	expectedLeaseDurationSeconds := ptr.To(int32(15))
+
+	require.Eventually(t, func() bool {
+		lease, err := fakeClient.CoordinationV1().Leases("default").Get(ctx, "foo", metav1.GetOptions{})
+		require.NoError(t, err)
+		require.NotNil(t, lease)
+		require.Equal(t, expectedLeaseDurationSeconds, lease.Spec.LeaseDurationSeconds)
+		return true
+	}, 10*time.Second, 100*time.Millisecond)
+
+	require.True(t, iamInvokedOnLeading)
+	require.NoError(t, leaderElection.Shutdown(ctx))
+}
diff --git a/extension/k8sleaderelector/factory.go b/extension/k8sleaderelector/factory.go
index 3aa1acbe4649..d26568ee3415 100644
--- a/extension/k8sleaderelector/factory.go
+++ b/extension/k8sleaderelector/factory.go
@@ -6,9 +6,10 @@ package k8sleaderelector // import "github.com/open-telemetry/opentelemetry-coll
 import (
 	"context"
 	"errors"
-	"os"
+	"sync"
 	"time"
 
+	"github.com/google/uuid"
 	"go.opentelemetry.io/collector/component"
 	"go.opentelemetry.io/collector/extension"
 
@@ -52,16 +53,14 @@ func createExtension(
 		return nil, errors.New("failed to create k8s client")
 	}
 
-	leaseHolderID, err := os.Hostname()
-	if err != nil {
-		return nil, err
-	}
+	leaseHolderID := uuid.New().String()
 
 	return &leaderElectionExtension{
 		config:        baseCfg,
 		logger:        set.Logger,
 		client:        client,
 		leaseHolderID: leaseHolderID,
+		waitGroup:     sync.WaitGroup{},
 	}, nil
 }
 
diff --git a/extension/k8sleaderelector/go.mod b/extension/k8sleaderelector/go.mod
index a016289e4533..ef7b6e9eec7e 100644
--- a/extension/k8sleaderelector/go.mod
+++ b/extension/k8sleaderelector/go.mod
@@ -3,6 +3,7 @@ module github.com/open-telemetry/opentelemetry-collector-contrib/extension/k8sle
 go 1.23.0
 
 require (
+	github.com/google/uuid v1.6.0
 	github.com/open-telemetry/opentelemetry-collector-contrib/internal/k8sconfig v0.120.1
 	github.com/stretchr/testify v1.10.0
 	go.opentelemetry.io/collector/component v0.120.1-0.20250226024140-8099e51f9a77
@@ -12,7 +13,9 @@ require (
 	go.opentelemetry.io/collector/extension/extensiontest v0.120.1-0.20250226024140-8099e51f9a77
 	go.uber.org/goleak v1.3.0
 	go.uber.org/zap v1.27.0
+	k8s.io/apimachinery v0.32.2
 	k8s.io/client-go v0.32.2
+	k8s.io/utils v0.0.0-20241104100929-3ea5e8cea738
 )
 
 require (
@@ -30,7 +33,6 @@ require (
 	github.com/google/gnostic-models v0.6.8 // indirect
 	github.com/google/go-cmp v0.6.0 // indirect
 	github.com/google/gofuzz v1.2.0 // indirect
-	github.com/google/uuid v1.6.0 // indirect
 	github.com/josharian/intern v1.0.0 // indirect
 	github.com/json-iterator/go v1.1.12 // indirect
 	github.com/knadh/koanf/maps v0.1.1 // indirect
@@ -69,10 +71,8 @@ require (
 	gopkg.in/inf.v0 v0.9.1 // indirect
 	gopkg.in/yaml.v3 v3.0.1 // indirect
 	k8s.io/api v0.32.2 // indirect
-	k8s.io/apimachinery v0.32.2 // indirect
 	k8s.io/klog/v2 v2.130.1 // indirect
 	k8s.io/kube-openapi v0.0.0-20241105132330-32ad38e42d3f // indirect
-	k8s.io/utils v0.0.0-20241104100929-3ea5e8cea738 // indirect
 	sigs.k8s.io/json v0.0.0-20241010143419-9aa6b5e7a4b3 // indirect
 	sigs.k8s.io/structured-merge-diff/v4 v4.4.3 // indirect
 	sigs.k8s.io/yaml v1.4.0 // indirect
diff --git a/extension/k8sleaderelector/leader_elector.go b/extension/k8sleaderelector/leader_elector.go
new file mode 100644
index 000000000000..9a80f4ad3158
--- /dev/null
+++ b/extension/k8sleaderelector/leader_elector.go
@@ -0,0 +1,46 @@
+// Copyright The OpenTelemetry Authors
+// SPDX-License-Identifier: Apache-2.0
+
+package k8sleaderelector // import "github.com/open-telemetry/opentelemetry-collector-contrib/extension/k8sleaderelector"
+
+import (
+	"context"
+
+	"k8s.io/client-go/kubernetes"
+	"k8s.io/client-go/tools/leaderelection"
+	"k8s.io/client-go/tools/leaderelection/resourcelock"
+)
+
+func newK8sLeaderElector(
+	cfg *Config,
+	client kubernetes.Interface,
+	onStartedLeading func(context.Context),
+	onStoppedLeading func(),
+	identity string,
+) (*leaderelection.LeaderElector, error) {
+	resourceLock, err := resourcelock.New(
+		resourcelock.LeasesResourceLock,
+		cfg.LeaseNamespace,
+		cfg.LeaseName,
+		client.CoreV1(),
+		client.CoordinationV1(),
+		resourcelock.ResourceLockConfig{
+			Identity: identity,
+		})
+	if err != nil {
+		return nil, err
+	}
+
+	leConfig := leaderelection.LeaderElectionConfig{
+		Lock:          resourceLock,
+		LeaseDuration: cfg.LeaseDuration,
+		RenewDeadline: cfg.RenewDuration,
+		RetryPeriod:   cfg.RetryPeriod,
+		Callbacks: leaderelection.LeaderCallbacks{
+			OnStartedLeading: onStartedLeading,
+			OnStoppedLeading: onStoppedLeading,
+		},
+	}
+
+	return leaderelection.NewLeaderElector(leConfig)
+}
diff --git a/extension/k8sleaderelector/leader_elector_test.go b/extension/k8sleaderelector/leader_elector_test.go
new file mode 100644
index 000000000000..e0aaca7574b3
--- /dev/null
+++ b/extension/k8sleaderelector/leader_elector_test.go
@@ -0,0 +1,30 @@
+package k8sleaderelector
+
+// Copyright The OpenTelemetry Authors
+// SPDX-License-Identifier: Apache-2.0
+
+import (
+	"context"
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/require"
+	"k8s.io/client-go/kubernetes/fake"
+)
+
+func TestLeaderElector(t *testing.T) {
+	fakeClient := fake.NewClientset()
+	onStartedLeading := func(_ context.Context) {}
+	onStoppedLeading := func() {}
+	leConfig := Config{
+		LeaseName:      "foo",
+		LeaseNamespace: "bar",
+		LeaseDuration:  20 * time.Second,
+		RenewDuration:  10 * time.Second,
+		RetryPeriod:    2 * time.Second,
+	}
+
+	leaderElector, err := newK8sLeaderElector(&leConfig, fakeClient, onStartedLeading, onStoppedLeading, "host1")
+	require.NoError(t, err)
+	require.NotNil(t, leaderElector)
+}