From c9ffc9465f7e0a8e8063106f72833e7721000a0e Mon Sep 17 00:00:00 2001
From: Lakhan Baheti <94619783+1akhanBaheti@users.noreply.github.com>
Date: Sun, 19 Nov 2023 01:46:11 +0530
Subject: [PATCH] fix: Labels delete & reordering (#2729)

* fix: Labels reordering inconsistency

* fix: Delete child labels

* feat: multi-select while grouping labels

* refactor: label sorting in mobx computed function

* feat: drag & drop label grouping, un-grouping

* chore: removed label select modal

* fix: moving labels from project store to project label store

* fix: typo changes and build tree function added

* labels feature

* disable dropping group into a group

* fix build errors

* fix more issues

* chore: added combining state UI, fixed scroll issue for label groups

* chore: group icon for label groups

* fix: group cannot be dropped in another group

---------

Co-authored-by: sriram veeraghanta <veeraghanta.sriram@gmail.com>
Co-authored-by: rahulramesha <rahulramesham@gmail.com>
Co-authored-by: Aaryan Khandelwal <aaryankhandu123@gmail.com>
---
 web/components/headers/cycle-issues.tsx       |   6 +-
 web/components/headers/module-issues.tsx      |   6 +-
 .../headers/project-archived-issues.tsx       |   7 +-
 web/components/headers/project-issues.tsx     |   6 +-
 .../headers/project-view-issues.tsx           |   7 +-
 .../filters/applied-filters/filters-list.tsx  |   4 +-
 .../filters/applied-filters/label.tsx         |   4 +-
 .../applied-filters/roots/archived-issue.tsx  |   4 +-
 .../applied-filters/roots/cycle-root.tsx      |   4 +-
 .../applied-filters/roots/module-root.tsx     |   4 +-
 .../applied-filters/roots/project-root.tsx    |   4 +-
 .../roots/project-view-root.tsx               |   4 +-
 .../header/filters/filters-selection.tsx      |   4 +-
 .../filters/header/filters/labels.tsx         |   4 +-
 .../issue-layouts/kanban/roots/cycle-root.tsx |   6 +-
 .../kanban/roots/module-root.tsx              |  13 +-
 .../kanban/roots/project-root.tsx             |  22 +-
 .../kanban/roots/project-view-root.tsx        |   2 +-
 .../issues/issue-layouts/kanban/swimlanes.tsx |   6 +-
 .../issues/issue-layouts/list/default.tsx     |   4 +-
 .../list/roots/archived-issue-root.tsx        |   4 +-
 .../issue-layouts/list/roots/cycle-root.tsx   |   4 +-
 .../issue-layouts/list/roots/module-root.tsx  |   4 +-
 .../issue-layouts/list/roots/project-root.tsx |   4 +-
 .../list/roots/project-view-root.tsx          |   2 +-
 .../issue-layouts/properties/labels.tsx       |  16 +-
 .../spreadsheet/columns/columns-list.tsx      |   4 +-
 .../spreadsheet/columns/label-column.tsx      |   4 +-
 .../spreadsheet/roots/cycle-root.tsx          |   5 +-
 .../spreadsheet/roots/module-root.tsx         |   4 +-
 .../spreadsheet/roots/project-root.tsx        |   4 +-
 .../spreadsheet/roots/project-view-root.tsx   |   5 +-
 .../spreadsheet/spreadsheet-column.tsx        |   4 +-
 .../spreadsheet/spreadsheet-view.tsx          |   4 +-
 web/components/issues/select/label.tsx        |   2 +-
 .../issues/sidebar-select/label.tsx           |  10 +-
 web/components/labels/create-label-modal.tsx  |   8 +-
 .../labels/create-update-label-inline.tsx     |  20 +-
 web/components/labels/delete-label-modal.tsx  |   4 +-
 web/components/labels/index.ts                |   2 +-
 .../labels/label-block/drag-handle.tsx        |  24 ++
 .../labels/label-block/label-item-block.tsx   |  80 ++++++
 .../labels/label-block/label-name.tsx         |  27 ++
 web/components/labels/label-select.tsx        |   4 +-
 web/components/labels/labels-list-modal.tsx   |  27 +-
 .../labels/project-setting-label-group.tsx    | 248 ++++++++++--------
 .../labels/project-setting-label-item.tsx     |  91 +++++++
 .../project-setting-label-list-item.tsx       |  73 ------
 .../labels/project-setting-label-list.tsx     | 234 +++++++++++------
 web/components/project/member-list.tsx        |   1 -
 web/components/ui/labels-list.tsx             |   4 +-
 web/components/views/form.tsx                 |   6 +-
 web/helpers/array.helper.ts                   |  16 ++
 web/hooks/use-draggable-portal.ts             |  31 +++
 web/layouts/auth-layout/project-wrapper.tsx   |   3 +-
 .../projects/[projectId]/pages/[pageId].tsx   |   4 +-
 web/services/issue/issue_label.service.ts     |  10 +-
 web/store/project/project-label.store.ts      | 187 ++++++++++---
 web/store/project/project.store.ts            |  56 +---
 web/store/workspace/workspace.store.ts        |  10 +-
 web/types/issues.d.ts                         |   7 +-
 web/types/pages.d.ts                          |   4 +-
 62 files changed, 862 insertions(+), 520 deletions(-)
 create mode 100644 web/components/labels/label-block/drag-handle.tsx
 create mode 100644 web/components/labels/label-block/label-item-block.tsx
 create mode 100644 web/components/labels/label-block/label-name.tsx
 create mode 100644 web/components/labels/project-setting-label-item.tsx
 delete mode 100644 web/components/labels/project-setting-label-list-item.tsx
 create mode 100644 web/hooks/use-draggable-portal.ts

diff --git a/web/components/headers/cycle-issues.tsx b/web/components/headers/cycle-issues.tsx
index 3f177cded..fea9e7019 100644
--- a/web/components/headers/cycle-issues.tsx
+++ b/web/components/headers/cycle-issues.tsx
@@ -30,12 +30,12 @@ export const CycleIssuesHeader: React.FC = observer(() => {
     issueFilter: issueFilterStore,
     cycle: cycleStore,
     cycleIssueFilter: cycleIssueFilterStore,
-    project: projectStore,
+    project: { currentProjectDetails },
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     commandPalette: commandPaletteStore,
   } = useMobxStore();
-  const { currentProjectDetails } = projectStore;
 
   const activeLayout = issueFilterStore.userDisplayFilters.layout;
 
@@ -178,7 +178,7 @@ export const CycleIssuesHeader: React.FC = observer(() => {
               layoutDisplayFiltersOptions={
                 activeLayout ? ISSUE_DISPLAY_FILTERS_BY_LAYOUT.issues[activeLayout] : undefined
               }
-              labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? undefined}
+              labels={projectLabels ?? undefined}
               members={projectMembers?.map((m) => m.member)}
               states={projectStateStore.states?.[projectId?.toString() ?? ""] ?? undefined}
             />
diff --git a/web/components/headers/module-issues.tsx b/web/components/headers/module-issues.tsx
index cea8093bf..6bb5ba84e 100644
--- a/web/components/headers/module-issues.tsx
+++ b/web/components/headers/module-issues.tsx
@@ -30,13 +30,13 @@ export const ModuleIssuesHeader: React.FC = observer(() => {
     issueFilter: issueFilterStore,
     module: moduleStore,
     moduleFilter: moduleFilterStore,
-    project: projectStore,
+    project: { currentProjectDetails },
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     commandPalette: commandPaletteStore,
   } = useMobxStore();
   const activeLayout = issueFilterStore.userDisplayFilters.layout;
-  const { currentProjectDetails } = projectStore;
 
   const { setValue, storedValue } = useLocalStorage("module_sidebar_collapsed", "false");
 
@@ -177,7 +177,7 @@ export const ModuleIssuesHeader: React.FC = observer(() => {
               layoutDisplayFiltersOptions={
                 activeLayout ? ISSUE_DISPLAY_FILTERS_BY_LAYOUT.issues[activeLayout] : undefined
               }
-              labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? undefined}
+              labels={projectLabels ?? undefined}
               members={projectMembers?.map((m) => m.member)}
               states={projectStateStore.states?.[projectId?.toString() ?? ""] ?? undefined}
             />
diff --git a/web/components/headers/project-archived-issues.tsx b/web/components/headers/project-archived-issues.tsx
index 4c2d9f354..8f8a4063d 100644
--- a/web/components/headers/project-archived-issues.tsx
+++ b/web/components/headers/project-archived-issues.tsx
@@ -21,14 +21,13 @@ export const ProjectArchivedIssuesHeader: FC = observer(() => {
   const { workspaceSlug, projectId } = router.query;
 
   const {
-    project: projectStore,
+    project: { currentProjectDetails },
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     archivedIssueFilters: archivedIssueFiltersStore,
     projectState: projectStateStore,
   } = useMobxStore();
 
-  const { currentProjectDetails } = projectStore;
-
   // for archived issues list layout is the only option
   const activeLayout = "list";
 
@@ -119,7 +118,7 @@ export const ProjectArchivedIssuesHeader: FC = observer(() => {
             layoutDisplayFiltersOptions={
               activeLayout ? ISSUE_DISPLAY_FILTERS_BY_LAYOUT.archived_issues[activeLayout] : undefined
             }
-            labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? undefined}
+            labels={projectLabels ?? undefined}
             members={projectMembers?.map((m) => m.member)}
             states={projectStateStore.states?.[projectId?.toString() ?? ""] ?? undefined}
           />
diff --git a/web/components/headers/project-issues.tsx b/web/components/headers/project-issues.tsx
index 1b418d6f4..bb816ff87 100644
--- a/web/components/headers/project-issues.tsx
+++ b/web/components/headers/project-issues.tsx
@@ -25,7 +25,8 @@ export const ProjectIssuesHeader: React.FC = observer(() => {
 
   const {
     issueFilter: issueFilterStore,
-    project: projectStore,
+    project: { currentProjectDetails },
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     inbox: inboxStore,
@@ -92,7 +93,6 @@ export const ProjectIssuesHeader: React.FC = observer(() => {
     },
     [issueFilterStore, projectId, workspaceSlug]
   );
-  const { currentProjectDetails } = projectStore;
 
   const inboxDetails = projectId ? inboxStore.inboxesList?.[projectId.toString()]?.[0] : undefined;
 
@@ -178,7 +178,7 @@ export const ProjectIssuesHeader: React.FC = observer(() => {
               layoutDisplayFiltersOptions={
                 activeLayout ? ISSUE_DISPLAY_FILTERS_BY_LAYOUT.issues[activeLayout] : undefined
               }
-              labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? undefined}
+              labels={projectLabels ?? undefined}
               members={projectMembers?.map((m) => m.member)}
               states={projectStateStore.states?.[projectId?.toString() ?? ""] ?? undefined}
             />
diff --git a/web/components/headers/project-view-issues.tsx b/web/components/headers/project-view-issues.tsx
index 7e899d851..6a4742e99 100644
--- a/web/components/headers/project-view-issues.tsx
+++ b/web/components/headers/project-view-issues.tsx
@@ -22,14 +22,13 @@ export const ProjectViewIssuesHeader: React.FC = observer(() => {
   const {
     issueFilter: issueFilterStore,
     projectViewFilters: projectViewFiltersStore,
-    project: projectStore,
+    project: { currentProjectDetails },
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     projectViews: projectViewsStore,
   } = useMobxStore();
 
-  const { currentProjectDetails } = projectStore;
-
   const storedFilters = viewId ? projectViewFiltersStore.storedFilters[viewId.toString()] : undefined;
 
   const activeLayout = issueFilterStore.userDisplayFilters.layout;
@@ -163,7 +162,7 @@ export const ProjectViewIssuesHeader: React.FC = observer(() => {
             layoutDisplayFiltersOptions={
               activeLayout ? ISSUE_DISPLAY_FILTERS_BY_LAYOUT.issues[activeLayout] : undefined
             }
-            labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? undefined}
+            labels={projectLabels ?? undefined}
             members={projectMembers?.map((m) => m.member)}
             states={projectStateStore.states?.[projectId?.toString() ?? ""] ?? undefined}
           />
diff --git a/web/components/issues/issue-layouts/filters/applied-filters/filters-list.tsx b/web/components/issues/issue-layouts/filters/applied-filters/filters-list.tsx
index f7672ac75..89f9e41c0 100644
--- a/web/components/issues/issue-layouts/filters/applied-filters/filters-list.tsx
+++ b/web/components/issues/issue-layouts/filters/applied-filters/filters-list.tsx
@@ -15,13 +15,13 @@ import { X } from "lucide-react";
 // helpers
 import { replaceUnderscoreIfSnakeCase } from "helpers/string.helper";
 // types
-import { IIssueFilterOptions, IIssueLabels, IProject, IState, IUserLite } from "types";
+import { IIssueFilterOptions, IIssueLabel, IProject, IState, IUserLite } from "types";
 
 type Props = {
   appliedFilters: IIssueFilterOptions;
   handleClearAllFilters: () => void;
   handleRemoveFilter: (key: keyof IIssueFilterOptions, value: string | null) => void;
-  labels?: IIssueLabels[] | undefined;
+  labels?: IIssueLabel[] | undefined;
   members?: IUserLite[] | undefined;
   projects?: IProject[] | undefined;
   states?: IState[] | undefined;
diff --git a/web/components/issues/issue-layouts/filters/applied-filters/label.tsx b/web/components/issues/issue-layouts/filters/applied-filters/label.tsx
index ee597575f..d96bb4fd1 100644
--- a/web/components/issues/issue-layouts/filters/applied-filters/label.tsx
+++ b/web/components/issues/issue-layouts/filters/applied-filters/label.tsx
@@ -3,11 +3,11 @@ import { observer } from "mobx-react-lite";
 // icons
 import { X } from "lucide-react";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
 
 type Props = {
   handleRemove: (val: string) => void;
-  labels: IIssueLabels[] | undefined;
+  labels: IIssueLabel[] | undefined;
   values: string[];
 };
 
diff --git a/web/components/issues/issue-layouts/filters/applied-filters/roots/archived-issue.tsx b/web/components/issues/issue-layouts/filters/applied-filters/roots/archived-issue.tsx
index 32e5a4a21..f733d3a87 100644
--- a/web/components/issues/issue-layouts/filters/applied-filters/roots/archived-issue.tsx
+++ b/web/components/issues/issue-layouts/filters/applied-filters/roots/archived-issue.tsx
@@ -14,7 +14,7 @@ export const ArchivedIssueAppliedFiltersRoot: React.FC = observer(() => {
 
   const {
     archivedIssueFilters: archivedIssueFiltersStore,
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
   } = useMobxStore();
@@ -77,7 +77,7 @@ export const ArchivedIssueAppliedFiltersRoot: React.FC = observer(() => {
         appliedFilters={appliedFilters}
         handleClearAllFilters={handleClearAllFilters}
         handleRemoveFilter={handleRemoveFilter}
-        labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? []}
+        labels={projectLabels ?? []}
         members={projectMembers?.map((m) => m.member)}
         states={projectStateStore.states?.[projectId?.toString() ?? ""]}
       />
diff --git a/web/components/issues/issue-layouts/filters/applied-filters/roots/cycle-root.tsx b/web/components/issues/issue-layouts/filters/applied-filters/roots/cycle-root.tsx
index 2bd0ffdfe..5e71dc96b 100644
--- a/web/components/issues/issue-layouts/filters/applied-filters/roots/cycle-root.tsx
+++ b/web/components/issues/issue-layouts/filters/applied-filters/roots/cycle-root.tsx
@@ -12,7 +12,7 @@ export const CycleAppliedFiltersRoot: React.FC = observer(() => {
   const { workspaceSlug, projectId, cycleId } = router.query;
 
   const {
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     cycleIssueFilter: cycleIssueFilterStore,
     projectState: projectStateStore,
@@ -72,7 +72,7 @@ export const CycleAppliedFiltersRoot: React.FC = observer(() => {
         appliedFilters={appliedFilters}
         handleClearAllFilters={handleClearAllFilters}
         handleRemoveFilter={handleRemoveFilter}
-        labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? []}
+        labels={projectLabels ?? []}
         members={projectMembers?.map((m) => m.member)}
         states={projectStateStore.states?.[projectId?.toString() ?? ""]}
       />
diff --git a/web/components/issues/issue-layouts/filters/applied-filters/roots/module-root.tsx b/web/components/issues/issue-layouts/filters/applied-filters/roots/module-root.tsx
index 6a5cd6944..bb7e924ff 100644
--- a/web/components/issues/issue-layouts/filters/applied-filters/roots/module-root.tsx
+++ b/web/components/issues/issue-layouts/filters/applied-filters/roots/module-root.tsx
@@ -13,7 +13,7 @@ export const ModuleAppliedFiltersRoot: React.FC = observer(() => {
   const { workspaceSlug, projectId, moduleId } = router.query;
 
   const {
-    project: projectStore,
+    projectLabel: { projectLabels },
     moduleFilter: moduleFilterStore,
     projectState: projectStateStore,
     projectMember: { projectMembers },
@@ -73,7 +73,7 @@ export const ModuleAppliedFiltersRoot: React.FC = observer(() => {
         appliedFilters={appliedFilters}
         handleClearAllFilters={handleClearAllFilters}
         handleRemoveFilter={handleRemoveFilter}
-        labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? []}
+        labels={projectLabels ?? []}
         members={projectMembers?.map((m) => m.member)}
         states={projectStateStore.states?.[projectId?.toString() ?? ""]}
       />
diff --git a/web/components/issues/issue-layouts/filters/applied-filters/roots/project-root.tsx b/web/components/issues/issue-layouts/filters/applied-filters/roots/project-root.tsx
index 26f475733..8b12b9b11 100644
--- a/web/components/issues/issue-layouts/filters/applied-filters/roots/project-root.tsx
+++ b/web/components/issues/issue-layouts/filters/applied-filters/roots/project-root.tsx
@@ -14,7 +14,7 @@ export const ProjectAppliedFiltersRoot: React.FC = observer(() => {
 
   const {
     issueFilter: issueFilterStore,
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectState: projectStateStore,
     projectMember: { projectMembers },
   } = useMobxStore();
@@ -77,7 +77,7 @@ export const ProjectAppliedFiltersRoot: React.FC = observer(() => {
         appliedFilters={appliedFilters}
         handleClearAllFilters={handleClearAllFilters}
         handleRemoveFilter={handleRemoveFilter}
-        labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? []}
+        labels={projectLabels ?? []}
         members={projectMembers?.map((m) => m.member)}
         states={projectStateStore.states?.[projectId?.toString() ?? ""]}
       />
diff --git a/web/components/issues/issue-layouts/filters/applied-filters/roots/project-view-root.tsx b/web/components/issues/issue-layouts/filters/applied-filters/roots/project-view-root.tsx
index 5f797a6ce..65462d277 100644
--- a/web/components/issues/issue-layouts/filters/applied-filters/roots/project-view-root.tsx
+++ b/web/components/issues/issue-layouts/filters/applied-filters/roots/project-view-root.tsx
@@ -18,7 +18,7 @@ export const ProjectViewAppliedFiltersRoot: React.FC = observer(() => {
   const { workspaceSlug, projectId, viewId } = router.query;
 
   const {
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     projectViews: projectViewsStore,
@@ -99,7 +99,7 @@ export const ProjectViewAppliedFiltersRoot: React.FC = observer(() => {
         appliedFilters={appliedFilters}
         handleClearAllFilters={handleClearAllFilters}
         handleRemoveFilter={handleRemoveFilter}
-        labels={projectStore.labels?.[projectId?.toString() ?? ""] ?? []}
+        labels={projectLabels ?? []}
         members={projectMembers?.map((m) => m.member)}
         states={projectStateStore.states?.[projectId?.toString() ?? ""]}
       />
diff --git a/web/components/issues/issue-layouts/filters/header/filters/filters-selection.tsx b/web/components/issues/issue-layouts/filters/header/filters/filters-selection.tsx
index 781e7fcd5..612b6fcdb 100644
--- a/web/components/issues/issue-layouts/filters/header/filters/filters-selection.tsx
+++ b/web/components/issues/issue-layouts/filters/header/filters/filters-selection.tsx
@@ -15,7 +15,7 @@ import {
   FilterTargetDate,
 } from "components/issues";
 // types
-import { IIssueFilterOptions, IIssueLabels, IProject, IState, IUserLite } from "types";
+import { IIssueFilterOptions, IIssueLabel, IProject, IState, IUserLite } from "types";
 // constants
 import { ILayoutDisplayFiltersOptions } from "constants/issue";
 
@@ -23,7 +23,7 @@ type Props = {
   filters: IIssueFilterOptions;
   handleFiltersUpdate: (key: keyof IIssueFilterOptions, value: string | string[]) => void;
   layoutDisplayFiltersOptions: ILayoutDisplayFiltersOptions | undefined;
-  labels?: IIssueLabels[] | undefined;
+  labels?: IIssueLabel[] | undefined;
   members?: IUserLite[] | undefined;
   projects?: IProject[] | undefined;
   states?: IState[] | undefined;
diff --git a/web/components/issues/issue-layouts/filters/header/filters/labels.tsx b/web/components/issues/issue-layouts/filters/header/filters/labels.tsx
index 764d29951..a12659cdd 100644
--- a/web/components/issues/issue-layouts/filters/header/filters/labels.tsx
+++ b/web/components/issues/issue-layouts/filters/header/filters/labels.tsx
@@ -5,7 +5,7 @@ import { FilterHeader, FilterOption } from "components/issues";
 // ui
 import { Loader } from "@plane/ui";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
 
 const LabelIcons = ({ color }: { color: string }) => (
   <span className="w-2.5 h-2.5 rounded-full" style={{ backgroundColor: color }} />
@@ -14,7 +14,7 @@ const LabelIcons = ({ color }: { color: string }) => (
 type Props = {
   appliedFilters: string[] | null;
   handleUpdate: (val: string) => void;
-  labels: IIssueLabels[] | undefined;
+  labels: IIssueLabel[] | undefined;
   searchQuery: string;
 };
 
diff --git a/web/components/issues/issue-layouts/kanban/roots/cycle-root.tsx b/web/components/issues/issue-layouts/kanban/roots/cycle-root.tsx
index a060ed213..fad4d814e 100644
--- a/web/components/issues/issue-layouts/kanban/roots/cycle-root.tsx
+++ b/web/components/issues/issue-layouts/kanban/roots/cycle-root.tsx
@@ -23,6 +23,7 @@ export const CycleKanBanLayout: React.FC = observer(() => {
   // store
   const {
     project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     cycleIssue: cycleIssueStore,
@@ -99,7 +100,6 @@ export const CycleKanBanLayout: React.FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
   const projects = workspaceSlug ? projectStore?.projects[workspaceSlug.toString()] || null : null;
   // const estimates =
@@ -137,7 +137,7 @@ export const CycleKanBanLayout: React.FC = observer(() => {
                 states={states}
                 stateGroups={stateGroups}
                 priorities={priorities}
-                labels={labels}
+                labels={projectLabels}
                 members={projectMembers?.map((m) => m.member) ?? null}
                 projects={projects}
                 showEmptyGroup={userDisplayFilters?.show_empty_groups || true}
@@ -164,7 +164,7 @@ export const CycleKanBanLayout: React.FC = observer(() => {
                 states={states}
                 stateGroups={stateGroups}
                 priorities={priorities}
-                labels={labels}
+                labels={projectLabels}
                 members={projectMembers?.map((m) => m.member) ?? null}
                 projects={projects}
                 showEmptyGroup={userDisplayFilters?.show_empty_groups || true}
diff --git a/web/components/issues/issue-layouts/kanban/roots/module-root.tsx b/web/components/issues/issue-layouts/kanban/roots/module-root.tsx
index 7a25f835c..a3429ef64 100644
--- a/web/components/issues/issue-layouts/kanban/roots/module-root.tsx
+++ b/web/components/issues/issue-layouts/kanban/roots/module-root.tsx
@@ -21,7 +21,8 @@ export const ModuleKanBanLayout: React.FC = observer(() => {
   const { workspaceSlug, moduleId } = router.query;
   // store
   const {
-    project: projectStore,
+    project: { workspaceProjects },
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     moduleIssue: moduleIssueStore,
@@ -97,9 +98,7 @@ export const ModuleKanBanLayout: React.FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
-  const projects = workspaceSlug ? projectStore?.projects[workspaceSlug.toString()] || null : null;
   // const estimates =
   //   currentProjectDetails?.estimate !== null
   //     ? projectStore.projectEstimates?.find((e) => e.id === currentProjectDetails?.estimate) || null
@@ -135,9 +134,9 @@ export const ModuleKanBanLayout: React.FC = observer(() => {
                 states={states}
                 stateGroups={stateGroups}
                 priorities={priorities}
-                labels={labels}
+                labels={projectLabels}
                 members={projectMembers?.map((m) => m.member) ?? null}
-                projects={projects}
+                projects={workspaceProjects}
                 showEmptyGroup={userDisplayFilters?.show_empty_groups || true}
                 isDragStarted={isDragStarted}
               />
@@ -162,9 +161,9 @@ export const ModuleKanBanLayout: React.FC = observer(() => {
                 states={states}
                 stateGroups={stateGroups}
                 priorities={priorities}
-                labels={labels}
+                labels={projectLabels}
                 members={projectMembers?.map((m) => m.member) ?? null}
-                projects={projects}
+                projects={workspaceProjects}
                 showEmptyGroup={userDisplayFilters?.show_empty_groups || true}
                 isDragStarted={isDragStarted}
               />
diff --git a/web/components/issues/issue-layouts/kanban/roots/project-root.tsx b/web/components/issues/issue-layouts/kanban/roots/project-root.tsx
index 8f34dee71..070d13a89 100644
--- a/web/components/issues/issue-layouts/kanban/roots/project-root.tsx
+++ b/web/components/issues/issue-layouts/kanban/roots/project-root.tsx
@@ -21,7 +21,8 @@ export const KanBanLayout: React.FC = observer(() => {
   const { workspaceSlug } = router.query as { workspaceSlug: string };
 
   const {
-    project: projectStore,
+    project: { workspaceProjects },
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     issue: issueStore,
@@ -29,7 +30,6 @@ export const KanBanLayout: React.FC = observer(() => {
     issueKanBanView: issueKanBanViewStore,
     issueDetail: issueDetailStore,
   } = useMobxStore();
-  const { currentProjectDetails } = projectStore;
 
   const issues = issueStore?.getIssues;
 
@@ -92,13 +92,11 @@ export const KanBanLayout: React.FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
-  const projects = workspaceSlug ? projectStore?.projects?.[workspaceSlug] || null : null;
-  const estimates =
-    currentProjectDetails?.estimate !== null
-      ? projectStore.projectEstimates?.find((e) => e.id === currentProjectDetails?.estimate) || null
-      : null;
+  // const estimates =
+  //   currentProjectDetails?.estimate !== null
+  //     ? projectStore.projectEstimates?.find((e) => e.id === currentProjectDetails?.estimate) || null
+  //     : null;
 
   return (
     <>
@@ -129,9 +127,9 @@ export const KanBanLayout: React.FC = observer(() => {
                 states={states}
                 stateGroups={stateGroups}
                 priorities={priorities}
-                labels={labels}
+                labels={projectLabels}
                 members={projectMembers?.map((m) => m.member) ?? null}
-                projects={projects}
+                projects={workspaceProjects}
                 enableQuickIssueCreate
                 showEmptyGroup={userDisplayFilters?.show_empty_groups || true}
                 isDragStarted={isDragStarted}
@@ -156,9 +154,9 @@ export const KanBanLayout: React.FC = observer(() => {
                 states={states}
                 stateGroups={stateGroups}
                 priorities={priorities}
-                labels={labels}
+                labels={projectLabels}
                 members={projectMembers?.map((m) => m.member) ?? null}
-                projects={projects}
+                projects={workspaceProjects}
                 showEmptyGroup={userDisplayFilters?.show_empty_groups || true}
                 isDragStarted={isDragStarted}
               />
diff --git a/web/components/issues/issue-layouts/kanban/roots/project-view-root.tsx b/web/components/issues/issue-layouts/kanban/roots/project-view-root.tsx
index 6751f3145..c03b50934 100644
--- a/web/components/issues/issue-layouts/kanban/roots/project-view-root.tsx
+++ b/web/components/issues/issue-layouts/kanban/roots/project-view-root.tsx
@@ -56,7 +56,7 @@ export const ProjectViewKanBanLayout: React.FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
+  // const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
   const projects = projectStateStore?.projectStates || null;
   const estimates = null;
diff --git a/web/components/issues/issue-layouts/kanban/swimlanes.tsx b/web/components/issues/issue-layouts/kanban/swimlanes.tsx
index e25ddea3d..7162025e0 100644
--- a/web/components/issues/issue-layouts/kanban/swimlanes.tsx
+++ b/web/components/issues/issue-layouts/kanban/swimlanes.tsx
@@ -5,7 +5,7 @@ import { KanBanGroupByHeaderRoot } from "./headers/group-by-root";
 import { KanBanSubGroupByHeaderRoot } from "./headers/sub-group-by-root";
 import { KanBan } from "./default";
 // types
-import { IIssue, IIssueDisplayProperties, IIssueLabels, IProject, IState, IUserLite } from "types";
+import { IIssue, IIssueDisplayProperties, IIssueLabel, IProject, IState, IUserLite } from "types";
 // constants
 import { getValueFromObject } from "constants/issue";
 
@@ -63,7 +63,7 @@ interface ISubGroupSwimlane extends ISubGroupSwimlaneHeader {
   states: IState[] | null;
   stateGroups: any;
   priorities: any;
-  labels: IIssueLabels[] | null;
+  labels: IIssueLabel[] | null;
   members: IUserLite[] | null;
   projects: IProject[] | null;
   issues: any;
@@ -181,7 +181,7 @@ export interface IKanBanSwimLanes {
   states: IState[] | null;
   stateGroups: any;
   priorities: any;
-  labels: IIssueLabels[] | null;
+  labels: IIssueLabel[] | null;
   members: IUserLite[] | null;
   projects: IProject[] | null;
   isDragStarted?: boolean;
diff --git a/web/components/issues/issue-layouts/list/default.tsx b/web/components/issues/issue-layouts/list/default.tsx
index b9d13a92b..4f2d215db 100644
--- a/web/components/issues/issue-layouts/list/default.tsx
+++ b/web/components/issues/issue-layouts/list/default.tsx
@@ -4,7 +4,7 @@ import { observer } from "mobx-react-lite";
 import { ListGroupByHeaderRoot } from "./headers/group-by-root";
 import { IssueBlocksList, ListInlineCreateIssueForm } from "components/issues";
 // types
-import { IEstimatePoint, IIssue, IIssueDisplayProperties, IIssueLabels, IProject, IState, IUserLite } from "types";
+import { IEstimatePoint, IIssue, IIssueDisplayProperties, IIssueLabel, IProject, IState, IUserLite } from "types";
 // constants
 import { getValueFromObject } from "constants/issue";
 
@@ -88,7 +88,7 @@ export interface IList {
   quickActions: (group_by: string | null, issue: IIssue) => React.ReactNode;
   displayProperties: IIssueDisplayProperties;
   states: IState[] | null;
-  labels: IIssueLabels[] | null;
+  labels: IIssueLabel[] | null;
   members: IUserLite[] | null;
   projects: IProject[] | null;
   stateGroups: any;
diff --git a/web/components/issues/issue-layouts/list/roots/archived-issue-root.tsx b/web/components/issues/issue-layouts/list/roots/archived-issue-root.tsx
index 396f7b508..a029ceda2 100644
--- a/web/components/issues/issue-layouts/list/roots/archived-issue-root.tsx
+++ b/web/components/issues/issue-layouts/list/roots/archived-issue-root.tsx
@@ -19,6 +19,7 @@ export const ArchivedIssueListLayout: FC = observer(() => {
 
   const {
     project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     archivedIssues: archivedIssueStore,
@@ -42,7 +43,6 @@ export const ArchivedIssueListLayout: FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
   const projects = workspaceSlug ? projectStore?.projects[workspaceSlug.toString()] || null : null;
   const estimates =
@@ -64,7 +64,7 @@ export const ArchivedIssueListLayout: FC = observer(() => {
         states={states}
         stateGroups={stateGroups}
         priorities={priorities}
-        labels={labels}
+        labels={projectLabels}
         members={projectMembers?.map((m) => m.member) ?? null}
         projects={projects}
         estimates={estimates?.points ? orderArrayBy(estimates.points, "key") : null}
diff --git a/web/components/issues/issue-layouts/list/roots/cycle-root.tsx b/web/components/issues/issue-layouts/list/roots/cycle-root.tsx
index 608607ab8..b92a57fa8 100644
--- a/web/components/issues/issue-layouts/list/roots/cycle-root.tsx
+++ b/web/components/issues/issue-layouts/list/roots/cycle-root.tsx
@@ -21,6 +21,7 @@ export const CycleListLayout: React.FC = observer(() => {
   // store
   const {
     project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     issueFilter: issueFilterStore,
@@ -59,7 +60,6 @@ export const CycleListLayout: React.FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
   const projects = workspaceSlug ? projectStore?.projects[workspaceSlug.toString()] || null : null;
   const estimates =
@@ -85,7 +85,7 @@ export const CycleListLayout: React.FC = observer(() => {
         states={states}
         stateGroups={stateGroups}
         priorities={priorities}
-        labels={labels}
+        labels={projectLabels}
         members={projectMembers?.map((m) => m.member) ?? null}
         projects={projects}
         estimates={estimates?.points ? orderArrayBy(estimates.points, "key") : null}
diff --git a/web/components/issues/issue-layouts/list/roots/module-root.tsx b/web/components/issues/issue-layouts/list/roots/module-root.tsx
index 1619112f1..7fa1f4718 100644
--- a/web/components/issues/issue-layouts/list/roots/module-root.tsx
+++ b/web/components/issues/issue-layouts/list/roots/module-root.tsx
@@ -21,6 +21,7 @@ export const ModuleListLayout: React.FC = observer(() => {
 
   const {
     project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     issueFilter: issueFilterStore,
@@ -59,7 +60,6 @@ export const ModuleListLayout: React.FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
   const projects = workspaceSlug ? projectStore?.projects[workspaceSlug.toString()] || null : null;
   const estimates =
@@ -85,7 +85,7 @@ export const ModuleListLayout: React.FC = observer(() => {
         states={states}
         stateGroups={stateGroups}
         priorities={priorities}
-        labels={labels}
+        labels={projectLabels}
         members={projectMembers?.map((m) => m.member) ?? null}
         projects={projects}
         estimates={estimates?.points ? orderArrayBy(estimates.points, "key") : null}
diff --git a/web/components/issues/issue-layouts/list/roots/project-root.tsx b/web/components/issues/issue-layouts/list/roots/project-root.tsx
index beec14008..cc78145f0 100644
--- a/web/components/issues/issue-layouts/list/roots/project-root.tsx
+++ b/web/components/issues/issue-layouts/list/roots/project-root.tsx
@@ -20,6 +20,7 @@ export const ListLayout: FC = observer(() => {
   // store
   const {
     project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     issue: issueStore,
@@ -49,7 +50,6 @@ export const ListLayout: FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
   const projects = workspaceSlug ? projectStore?.projects[workspaceSlug.toString()] || null : null;
   const estimates =
@@ -80,7 +80,7 @@ export const ListLayout: FC = observer(() => {
             states={states}
             stateGroups={stateGroups}
             priorities={priorities}
-            labels={labels}
+            labels={projectLabels}
             members={projectMembers?.map((m) => m.member) ?? null}
             projects={projects}
             enableQuickIssueCreate
diff --git a/web/components/issues/issue-layouts/list/roots/project-view-root.tsx b/web/components/issues/issue-layouts/list/roots/project-view-root.tsx
index a5dc76352..66c2828a8 100644
--- a/web/components/issues/issue-layouts/list/roots/project-view-root.tsx
+++ b/web/components/issues/issue-layouts/list/roots/project-view-root.tsx
@@ -30,7 +30,7 @@ export const ProjectViewListLayout: React.FC = observer(() => {
 
   const states = projectStateStore?.projectStates || null;
   const priorities = ISSUE_PRIORITIES || null;
-  const labels = projectStore?.projectLabels || null;
+  // const labels = projectStore?.projectLabels || null;
   const stateGroups = ISSUE_STATE_GROUPS || null;
   const projects = projectStateStore?.projectStates || null;
   const estimates = null;
diff --git a/web/components/issues/issue-layouts/properties/labels.tsx b/web/components/issues/issue-layouts/properties/labels.tsx
index 16589bf2d..2d1411196 100644
--- a/web/components/issues/issue-layouts/properties/labels.tsx
+++ b/web/components/issues/issue-layouts/properties/labels.tsx
@@ -1,8 +1,6 @@
 import { Fragment, useState } from "react";
-
 import { observer } from "mobx-react-lite";
 import { useMobxStore } from "lib/mobx/store-provider";
-
 // hooks
 import { usePopper } from "react-popper";
 // components
@@ -44,7 +42,10 @@ export const IssuePropertyLabels: React.FC<IIssuePropertyLabels> = observer((pro
     noLabelBorder = false,
   } = props;
 
-  const { workspace: workspaceStore, project: projectStore }: RootStore = useMobxStore();
+  const {
+    workspace: workspaceStore,
+    projectLabel: { fetchProjectLabels, projectLabels },
+  }: RootStore = useMobxStore();
   const workspaceSlug = workspaceStore?.workspaceSlug;
 
   const [query, setQuery] = useState("");
@@ -53,12 +54,9 @@ export const IssuePropertyLabels: React.FC<IIssuePropertyLabels> = observer((pro
   const [popperElement, setPopperElement] = useState<HTMLDivElement | null>(null);
   const [isLoading, setIsLoading] = useState<Boolean>(false);
 
-  const projectLabels = projectId && projectStore?.labels?.[projectId];
-
-  const fetchProjectLabels = () => {
+  const fetchLabels = () => {
     setIsLoading(true);
-    if (workspaceSlug && projectId)
-      projectStore.fetchProjectLabels(workspaceSlug, projectId).then(() => setIsLoading(false));
+    if (workspaceSlug && projectId) fetchProjectLabels(workspaceSlug, projectId).then(() => setIsLoading(false));
   };
 
   const options = (projectLabels ? projectLabels : []).map((label) => ({
@@ -169,7 +167,7 @@ export const IssuePropertyLabels: React.FC<IIssuePropertyLabels> = observer((pro
               ? "cursor-pointer"
               : "cursor-pointer hover:bg-custom-background-80"
           }  ${buttonClassName}`}
-          onClick={() => !projectLabels && fetchProjectLabels()}
+          onClick={() => !projectLabels && fetchLabels()}
         >
           {label}
           {!hideDropdownArrow && !disabled && <ChevronDown className="h-3 w-3" aria-hidden="true" />}
diff --git a/web/components/issues/issue-layouts/spreadsheet/columns/columns-list.tsx b/web/components/issues/issue-layouts/spreadsheet/columns/columns-list.tsx
index 7ba9d081c..cd815f180 100644
--- a/web/components/issues/issue-layouts/spreadsheet/columns/columns-list.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/columns/columns-list.tsx
@@ -2,7 +2,7 @@ import { observer } from "mobx-react-lite";
 // components
 import { SpreadsheetColumn } from "components/issues";
 // types
-import { IIssue, IIssueDisplayFilterOptions, IIssueDisplayProperties, IIssueLabels, IState, IUserLite } from "types";
+import { IIssue, IIssueDisplayFilterOptions, IIssueDisplayProperties, IIssueLabel, IState, IUserLite } from "types";
 
 type Props = {
   displayFilters: IIssueDisplayFilterOptions;
@@ -13,7 +13,7 @@ type Props = {
   handleUpdateIssue: (issue: IIssue, data: Partial<IIssue>) => void;
   issues: IIssue[] | undefined;
   members?: IUserLite[] | undefined;
-  labels?: IIssueLabels[] | undefined;
+  labels?: IIssueLabel[] | undefined;
   states?: IState[] | undefined;
 };
 
diff --git a/web/components/issues/issue-layouts/spreadsheet/columns/label-column.tsx b/web/components/issues/issue-layouts/spreadsheet/columns/label-column.tsx
index 59066f849..1c3443f74 100644
--- a/web/components/issues/issue-layouts/spreadsheet/columns/label-column.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/columns/label-column.tsx
@@ -5,12 +5,12 @@ import { IssuePropertyLabels } from "../../properties";
 // hooks
 import useSubIssue from "hooks/use-sub-issue";
 // types
-import { IIssue, IIssueLabels } from "types";
+import { IIssue, IIssueLabel } from "types";
 
 type Props = {
   issue: IIssue;
   onChange: (formData: Partial<IIssue>) => void;
-  labels: IIssueLabels[] | undefined;
+  labels: IIssueLabel[] | undefined;
   expandedIssues: string[];
   disabled: boolean;
 };
diff --git a/web/components/issues/issue-layouts/spreadsheet/roots/cycle-root.tsx b/web/components/issues/issue-layouts/spreadsheet/roots/cycle-root.tsx
index f8f400c95..2d362cb44 100644
--- a/web/components/issues/issue-layouts/spreadsheet/roots/cycle-root.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/roots/cycle-root.tsx
@@ -1,7 +1,6 @@
 import React, { useCallback } from "react";
 import { useRouter } from "next/router";
 import { observer } from "mobx-react-lite";
-
 // mobx store
 import { useMobxStore } from "lib/mobx/store-provider";
 // components
@@ -19,7 +18,7 @@ export const CycleSpreadsheetLayout: React.FC = observer(() => {
     issueFilter: issueFilterStore,
     cycleIssue: cycleIssueStore,
     issueDetail: issueDetailStore,
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
   } = useMobxStore();
@@ -61,7 +60,7 @@ export const CycleSpreadsheetLayout: React.FC = observer(() => {
       handleDisplayFilterUpdate={handleDisplayFiltersUpdate}
       issues={issues as IIssueUnGroupedStructure}
       members={projectMembers?.map((m) => m.member)}
-      labels={projectId ? projectStore.labels?.[projectId.toString()] ?? undefined : undefined}
+      labels={projectLabels || undefined}
       states={projectId ? projectStateStore.states?.[projectId.toString()] : undefined}
       handleIssueAction={() => {}}
       handleUpdateIssue={handleUpdateIssue}
diff --git a/web/components/issues/issue-layouts/spreadsheet/roots/module-root.tsx b/web/components/issues/issue-layouts/spreadsheet/roots/module-root.tsx
index 78cd095fa..60fda0282 100644
--- a/web/components/issues/issue-layouts/spreadsheet/roots/module-root.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/roots/module-root.tsx
@@ -19,7 +19,7 @@ export const ModuleSpreadsheetLayout: React.FC = observer(() => {
     issueFilter: issueFilterStore,
     moduleIssue: moduleIssueStore,
     issueDetail: issueDetailStore,
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
   } = useMobxStore();
@@ -61,7 +61,7 @@ export const ModuleSpreadsheetLayout: React.FC = observer(() => {
       handleDisplayFilterUpdate={handleDisplayFiltersUpdate}
       issues={issues as IIssueUnGroupedStructure}
       members={projectMembers?.map((m) => m.member)}
-      labels={projectId ? projectStore.labels?.[projectId.toString()] ?? undefined : undefined}
+      labels={projectLabels ?? undefined}
       states={projectId ? projectStateStore.states?.[projectId.toString()] : undefined}
       handleIssueAction={() => {}}
       handleUpdateIssue={handleUpdateIssue}
diff --git a/web/components/issues/issue-layouts/spreadsheet/roots/project-root.tsx b/web/components/issues/issue-layouts/spreadsheet/roots/project-root.tsx
index be9c9ea5c..f049914df 100644
--- a/web/components/issues/issue-layouts/spreadsheet/roots/project-root.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/roots/project-root.tsx
@@ -19,7 +19,7 @@ export const ProjectSpreadsheetLayout: React.FC = observer(() => {
     issue: issueStore,
     issueFilter: issueFilterStore,
     issueDetail: issueDetailStore,
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
     user: userStore,
@@ -63,7 +63,7 @@ export const ProjectSpreadsheetLayout: React.FC = observer(() => {
       handleDisplayFilterUpdate={handleDisplayFiltersUpdate}
       issues={issues as IIssueUnGroupedStructure}
       members={projectMembers?.map((m) => m.member)}
-      labels={projectId ? projectStore.labels?.[projectId.toString()] ?? undefined : undefined}
+      labels={projectLabels || undefined}
       states={projectId ? projectStateStore.states?.[projectId.toString()] : undefined}
       handleIssueAction={() => {}}
       handleUpdateIssue={handleUpdateIssue}
diff --git a/web/components/issues/issue-layouts/spreadsheet/roots/project-view-root.tsx b/web/components/issues/issue-layouts/spreadsheet/roots/project-view-root.tsx
index 3e6847b21..2f35f2499 100644
--- a/web/components/issues/issue-layouts/spreadsheet/roots/project-view-root.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/roots/project-view-root.tsx
@@ -1,7 +1,6 @@
 import React, { useCallback } from "react";
 import { useRouter } from "next/router";
 import { observer } from "mobx-react-lite";
-
 // mobx store
 import { useMobxStore } from "lib/mobx/store-provider";
 // components
@@ -19,7 +18,7 @@ export const ProjectViewSpreadsheetLayout: React.FC = observer(() => {
     issueFilter: issueFilterStore,
     projectViewIssues: projectViewIssueStore,
     issueDetail: issueDetailStore,
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectMember: { projectMembers },
     projectState: projectStateStore,
   } = useMobxStore();
@@ -61,7 +60,7 @@ export const ProjectViewSpreadsheetLayout: React.FC = observer(() => {
       handleDisplayFilterUpdate={handleDisplayFiltersUpdate}
       issues={issues as IIssueUnGroupedStructure}
       members={projectMembers?.map((m) => m.member)}
-      labels={projectId ? projectStore.labels?.[projectId.toString()] ?? undefined : undefined}
+      labels={projectLabels || undefined}
       states={projectId ? projectStateStore.states?.[projectId.toString()] : undefined}
       handleIssueAction={() => {}}
       handleUpdateIssue={handleUpdateIssue}
diff --git a/web/components/issues/issue-layouts/spreadsheet/spreadsheet-column.tsx b/web/components/issues/issue-layouts/spreadsheet/spreadsheet-column.tsx
index 1cb4675f9..25b5139f5 100644
--- a/web/components/issues/issue-layouts/spreadsheet/spreadsheet-column.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/spreadsheet-column.tsx
@@ -27,7 +27,7 @@ import {
 // ui
 import { CustomMenu } from "@plane/ui";
 // types
-import { IIssue, IIssueDisplayFilterOptions, IIssueLabels, IState, IUserLite, TIssueOrderByOptions } from "types";
+import { IIssue, IIssueDisplayFilterOptions, IIssueLabel, IState, IUserLite, TIssueOrderByOptions } from "types";
 // constants
 import { SPREADSHEET_PROPERTY_DETAILS } from "constants/spreadsheet";
 
@@ -40,7 +40,7 @@ type Props = {
   issues: IIssue[] | undefined;
   property: string;
   members?: IUserLite[] | undefined;
-  labels?: IIssueLabels[] | undefined;
+  labels?: IIssueLabel[] | undefined;
   states?: IState[] | undefined;
 };
 
diff --git a/web/components/issues/issue-layouts/spreadsheet/spreadsheet-view.tsx b/web/components/issues/issue-layouts/spreadsheet/spreadsheet-view.tsx
index a9aeeec75..20fcba939 100644
--- a/web/components/issues/issue-layouts/spreadsheet/spreadsheet-view.tsx
+++ b/web/components/issues/issue-layouts/spreadsheet/spreadsheet-view.tsx
@@ -6,7 +6,7 @@ import { SpreadsheetColumnsList, SpreadsheetIssuesColumn, SpreadsheetInlineCreat
 import { IssuePeekOverview } from "components/issues/issue-peek-overview";
 import { Spinner } from "@plane/ui";
 // types
-import { IIssue, IIssueDisplayFilterOptions, IIssueDisplayProperties, IIssueLabels, IState, IUserLite } from "types";
+import { IIssue, IIssueDisplayFilterOptions, IIssueDisplayProperties, IIssueLabel, IState, IUserLite } from "types";
 
 type Props = {
   displayProperties: IIssueDisplayProperties;
@@ -14,7 +14,7 @@ type Props = {
   handleDisplayFilterUpdate: (data: Partial<IIssueDisplayFilterOptions>) => void;
   issues: IIssue[] | undefined;
   members?: IUserLite[] | undefined;
-  labels?: IIssueLabels[] | undefined;
+  labels?: IIssueLabel[] | undefined;
   states?: IState[] | undefined;
   handleIssueAction: (issue: IIssue, action: "copy" | "delete" | "edit") => void;
   handleUpdateIssue: (issue: IIssue, data: Partial<IIssue>) => void;
diff --git a/web/components/issues/select/label.tsx b/web/components/issues/select/label.tsx
index c378a81a1..ac76ecd1d 100644
--- a/web/components/issues/select/label.tsx
+++ b/web/components/issues/select/label.tsx
@@ -29,7 +29,7 @@ export const IssueLabelSelect: React.FC<Props> = observer((props) => {
   const { workspaceSlug } = router.query;
 
   const {
-    project: { labels, fetchProjectLabels },
+    projectLabel: { labels, fetchProjectLabels },
   } = useMobxStore();
 
   const [referenceElement, setReferenceElement] = useState<HTMLDivElement | null>(null);
diff --git a/web/components/issues/sidebar-select/label.tsx b/web/components/issues/sidebar-select/label.tsx
index e997b6f49..52a50562c 100644
--- a/web/components/issues/sidebar-select/label.tsx
+++ b/web/components/issues/sidebar-select/label.tsx
@@ -15,7 +15,7 @@ import { IssueLabelSelect } from "../select";
 // icons
 import { Plus, X } from "lucide-react";
 // types
-import { IIssue, IIssueLabels } from "types";
+import { IIssue, IIssueLabel } from "types";
 // fetch-keys
 import { PROJECT_ISSUE_LABELS } from "constants/fetch-keys";
 import useToast from "hooks/use-toast";
@@ -28,7 +28,7 @@ type Props = {
   uneditable: boolean;
 };
 
-const defaultValues: Partial<IIssueLabels> = {
+const defaultValues: Partial<IIssueLabel> = {
   name: "",
   color: "#ff0000",
 };
@@ -57,20 +57,20 @@ export const SidebarLabelSelect: React.FC<Props> = ({
     watch,
     control,
     setFocus,
-  } = useForm<Partial<IIssueLabels>>({
+  } = useForm<Partial<IIssueLabel>>({
     defaultValues,
   });
 
   const { user } = useUser();
 
-  const { data: issueLabels, mutate: issueLabelMutate } = useSWR<IIssueLabels[]>(
+  const { data: issueLabels, mutate: issueLabelMutate } = useSWR<IIssueLabel[]>(
     workspaceSlug && projectId ? PROJECT_ISSUE_LABELS(projectId as string) : null,
     workspaceSlug && projectId
       ? () => issueLabelService.getProjectIssueLabels(workspaceSlug as string, projectId as string)
       : null
   );
 
-  const handleNewLabel = async (formData: Partial<IIssueLabels>) => {
+  const handleNewLabel = async (formData: Partial<IIssueLabel>) => {
     if (!workspaceSlug || !projectId || isSubmitting) return;
 
     await issueLabelService
diff --git a/web/components/labels/create-label-modal.tsx b/web/components/labels/create-label-modal.tsx
index e148f8231..a8e7e0e2e 100644
--- a/web/components/labels/create-label-modal.tsx
+++ b/web/components/labels/create-label-modal.tsx
@@ -12,7 +12,7 @@ import { Button, Input } from "@plane/ui";
 // icons
 import { ChevronDown } from "lucide-react";
 // types
-import type { IIssueLabels, IState } from "types";
+import type { IIssueLabel, IState } from "types";
 // constants
 import { LABEL_COLOR_OPTIONS, getRandomLabelColor } from "constants/label";
 import useToast from "hooks/use-toast";
@@ -22,7 +22,7 @@ type Props = {
   isOpen: boolean;
   projectId: string;
   handleClose: () => void;
-  onSuccess?: (response: IIssueLabels) => void;
+  onSuccess?: (response: IIssueLabel) => void;
 };
 
 const defaultValues: Partial<IState> = {
@@ -47,7 +47,7 @@ export const CreateLabelModal: React.FC<Props> = observer((props) => {
     reset,
     setValue,
     setFocus,
-  } = useForm<IIssueLabels>({
+  } = useForm<IIssueLabel>({
     defaultValues,
   });
 
@@ -69,7 +69,7 @@ export const CreateLabelModal: React.FC<Props> = observer((props) => {
 
   const { setToastAlert } = useToast();
 
-  const onSubmit = async (formData: IIssueLabels) => {
+  const onSubmit = async (formData: IIssueLabel) => {
     if (!workspaceSlug) return;
 
     await projectLabelStore
diff --git a/web/components/labels/create-update-label-inline.tsx b/web/components/labels/create-update-label-inline.tsx
index f27bd517e..91a65f94b 100644
--- a/web/components/labels/create-update-label-inline.tsx
+++ b/web/components/labels/create-update-label-inline.tsx
@@ -11,7 +11,7 @@ import { Popover, Transition } from "@headlessui/react";
 // ui
 import { Button, Input } from "@plane/ui";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
 // fetch-keys
 import { getRandomLabelColor, LABEL_COLOR_OPTIONS } from "constants/label";
 import useToast from "hooks/use-toast";
@@ -20,11 +20,11 @@ type Props = {
   labelForm: boolean;
   setLabelForm: React.Dispatch<React.SetStateAction<boolean>>;
   isUpdating: boolean;
-  labelToUpdate: IIssueLabels | null;
+  labelToUpdate?: IIssueLabel;
   onClose?: () => void;
 };
 
-const defaultValues: Partial<IIssueLabels> = {
+const defaultValues: Partial<IIssueLabel> = {
   name: "",
   color: "rgb(var(--color-text-200))",
 };
@@ -50,7 +50,7 @@ export const CreateUpdateLabelInline = observer(
       watch,
       setValue,
       setFocus,
-    } = useForm<IIssueLabels>({
+    } = useForm<IIssueLabel>({
       defaultValues,
     });
 
@@ -60,7 +60,7 @@ export const CreateUpdateLabelInline = observer(
       if (onClose) onClose();
     };
 
-    const handleLabelCreate: SubmitHandler<IIssueLabels> = async (formData) => {
+    const handleLabelCreate: SubmitHandler<IIssueLabel> = async (formData) => {
       if (!workspaceSlug || !projectId || isSubmitting) return;
 
       await projectLabelStore
@@ -79,7 +79,7 @@ export const CreateUpdateLabelInline = observer(
         });
     };
 
-    const handleLabelUpdate: SubmitHandler<IIssueLabels> = async (formData) => {
+    const handleLabelUpdate: SubmitHandler<IIssueLabel> = async (formData) => {
       if (!workspaceSlug || !projectId || isSubmitting) return;
 
       await projectLabelStore
@@ -128,9 +128,7 @@ export const CreateUpdateLabelInline = observer(
           e.preventDefault();
           handleSubmit(isUpdating ? handleLabelUpdate : handleLabelCreate)();
         }}
-        className={`flex scroll-m-8 items-center gap-2 rounded border border-custom-border-200 bg-custom-background-100 px-3.5 py-2 ${
-          labelForm ? "" : "hidden"
-        }`}
+        className={`flex scroll-m-8 items-center gap-2 bg-custom-background-100 w-full ${labelForm ? "" : "hidden"}`}
       >
         <div className="flex-shrink-0">
           <Popover className="relative z-10 flex h-full w-full items-center justify-center">
@@ -198,10 +196,10 @@ export const CreateUpdateLabelInline = observer(
             )}
           />
         </div>
-        <Button variant="neutral-primary" onClick={() => handleClose()}>
+        <Button variant="neutral-primary" onClick={() => handleClose()} size="sm">
           Cancel
         </Button>
-        <Button variant="primary" type="submit" loading={isSubmitting}>
+        <Button variant="primary" type="submit" size="sm" loading={isSubmitting}>
           {isUpdating ? (isSubmitting ? "Updating" : "Update") : isSubmitting ? "Adding" : "Add"}
         </Button>
       </form>
diff --git a/web/components/labels/delete-label-modal.tsx b/web/components/labels/delete-label-modal.tsx
index f8faeef33..33d4fdb09 100644
--- a/web/components/labels/delete-label-modal.tsx
+++ b/web/components/labels/delete-label-modal.tsx
@@ -12,12 +12,12 @@ import useToast from "hooks/use-toast";
 // ui
 import { Button } from "@plane/ui";
 // types
-import type { IIssueLabels } from "types";
+import type { IIssueLabel } from "types";
 
 type Props = {
   isOpen: boolean;
   onClose: () => void;
-  data: IIssueLabels | null;
+  data: IIssueLabel | null;
 };
 
 export const DeleteLabelModal: React.FC<Props> = observer((props) => {
diff --git a/web/components/labels/index.ts b/web/components/labels/index.ts
index c7316b037..c9ef583bf 100644
--- a/web/components/labels/index.ts
+++ b/web/components/labels/index.ts
@@ -4,5 +4,5 @@ export * from "./delete-label-modal";
 export * from "./label-select";
 export * from "./labels-list-modal";
 export * from "./project-setting-label-group";
-export * from "./project-setting-label-list-item";
+export * from "./project-setting-label-item";
 export * from "./project-setting-label-list";
diff --git a/web/components/labels/label-block/drag-handle.tsx b/web/components/labels/label-block/drag-handle.tsx
new file mode 100644
index 000000000..28c3b0115
--- /dev/null
+++ b/web/components/labels/label-block/drag-handle.tsx
@@ -0,0 +1,24 @@
+import { DraggableProvidedDragHandleProps } from "@hello-pangea/dnd";
+import { MoreVertical } from "lucide-react";
+
+interface IDragHandle {
+  isDragging: boolean;
+  dragHandleProps: DraggableProvidedDragHandleProps;
+}
+
+export const DragHandle = (props: IDragHandle) => {
+  const { isDragging, dragHandleProps } = props;
+
+  return (
+    <button
+      type="button"
+      className={`rounded text-custom-sidebar-text-200 flex flex-shrink-0 mr-1 group-hover:opacity-100 ${
+        isDragging ? "opacity-100" : "opacity-0"
+      }`}
+      {...dragHandleProps}
+    >
+      <MoreVertical className="h-3.5 w-3.5 stroke-custom-text-400" />
+      <MoreVertical className="h-3.5 w-3.5 stroke-custom-text-400 -ml-5" />
+    </button>
+  );
+};
diff --git a/web/components/labels/label-block/label-item-block.tsx b/web/components/labels/label-block/label-item-block.tsx
new file mode 100644
index 000000000..a421aa0e9
--- /dev/null
+++ b/web/components/labels/label-block/label-item-block.tsx
@@ -0,0 +1,80 @@
+import { useRef, useState } from "react";
+import { LucideIcon, X } from "lucide-react";
+import { DraggableProvidedDragHandleProps } from "@hello-pangea/dnd";
+//ui
+import { CustomMenu } from "@plane/ui";
+//types
+import { IIssueLabel } from "types";
+//hooks
+import useOutsideClickDetector from "hooks/use-outside-click-detector";
+//components
+import { DragHandle } from "./drag-handle";
+import { LabelName } from "./label-name";
+
+//types
+export interface ICustomMenuItem {
+  CustomIcon: LucideIcon;
+  onClick: (label: IIssueLabel) => void;
+  isVisible: boolean;
+  text: string;
+}
+
+interface ILabelItemBlock {
+  label: IIssueLabel;
+  isDragging: boolean;
+  customMenuItems: ICustomMenuItem[];
+  dragHandleProps: DraggableProvidedDragHandleProps;
+  handleLabelDelete: (label: IIssueLabel) => void;
+  isLabelGroup?: boolean;
+}
+
+export const LabelItemBlock = (props: ILabelItemBlock) => {
+  const { label, isDragging, customMenuItems, dragHandleProps, handleLabelDelete, isLabelGroup } = props;
+
+  //state
+  const [isMenuActive, setIsMenuActive] = useState(false);
+
+  //refs
+  const actionSectionRef = useRef<HTMLDivElement | null>(null);
+
+  useOutsideClickDetector(actionSectionRef, () => setIsMenuActive(false));
+
+  return (
+    <div className="flex items-center group">
+      <div className="flex items-center">
+        <DragHandle isDragging={isDragging} dragHandleProps={dragHandleProps} />
+        <LabelName color={label.color} name={label.name} isGroup={isLabelGroup ?? false} />
+      </div>
+
+      <div
+        ref={actionSectionRef}
+        className={`absolute right-3 flex items-start gap-3.5 px-4 ${
+          isMenuActive || isLabelGroup
+            ? "opacity-100"
+            : "opacity-0 group-hover:pointer-events-auto group-hover:opacity-100"
+        } ${isLabelGroup && "-top-0.5"}`}
+      >
+        <CustomMenu ellipsis buttonClassName="h-4 w-4 leading-4 text-custom-sidebar-text-400">
+          {customMenuItems.map(
+            ({ isVisible, onClick, CustomIcon, text }) =>
+              isVisible && (
+                <CustomMenu.MenuItem onClick={() => onClick(label)}>
+                  <span className="flex items-center justify-start gap-2">
+                    <CustomIcon className="h-4 w-4" />
+                    <span>{text}</span>
+                  </span>
+                </CustomMenu.MenuItem>
+              )
+          )}
+        </CustomMenu>
+        {!isLabelGroup && (
+          <div className="py-0.5">
+            <button className="flex h-4 w-4 items-center justify-start gap-2" onClick={() => handleLabelDelete(label)}>
+              <X className="h-4 w-4  text-custom-sidebar-text-400 flex-shrink-0" />
+            </button>
+          </div>
+        )}
+      </div>
+    </div>
+  );
+};
diff --git a/web/components/labels/label-block/label-name.tsx b/web/components/labels/label-block/label-name.tsx
new file mode 100644
index 000000000..9c84959cc
--- /dev/null
+++ b/web/components/labels/label-block/label-name.tsx
@@ -0,0 +1,27 @@
+import { Component } from "lucide-react";
+
+interface ILabelName {
+  name: string;
+  color: string;
+  isGroup: boolean;
+}
+
+export const LabelName = (props: ILabelName) => {
+  const { name, color, isGroup } = props;
+
+  return (
+    <div className="flex items-center gap-3">
+      {isGroup ? (
+        <Component className="h-3.5 w-3.5" color={color} />
+      ) : (
+        <span
+          className="h-3.5 w-3.5 flex-shrink-0 rounded-full"
+          style={{
+            backgroundColor: color && color !== "" ? color : "#000",
+          }}
+        />
+      )}
+      <h6 className="text-sm">{name}</h6>
+    </div>
+  );
+};
diff --git a/web/components/labels/label-select.tsx b/web/components/labels/label-select.tsx
index 162c78b96..5c9feb2ed 100644
--- a/web/components/labels/label-select.tsx
+++ b/web/components/labels/label-select.tsx
@@ -6,12 +6,12 @@ import { Check, ChevronDown, Search } from "lucide-react";
 // ui
 import { Tooltip } from "@plane/ui";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
 
 type Props = {
   value: string[];
   onChange: (data: string[]) => void;
-  labels: IIssueLabels[] | undefined;
+  labels: IIssueLabel[] | undefined;
   className?: string;
   buttonClassName?: string;
   optionsClassName?: string;
diff --git a/web/components/labels/labels-list-modal.tsx b/web/components/labels/labels-list-modal.tsx
index e3176d8a0..650712314 100644
--- a/web/components/labels/labels-list-modal.tsx
+++ b/web/components/labels/labels-list-modal.tsx
@@ -11,12 +11,12 @@ import { useMobxStore } from "lib/mobx/store-provider";
 import { LayerStackIcon } from "@plane/ui";
 import { Search } from "lucide-react";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
 
 type Props = {
   isOpen: boolean;
   handleClose: () => void;
-  parent: IIssueLabels | undefined;
+  parent: IIssueLabel | undefined;
 };
 
 export const LabelsListModal: React.FC<Props> = observer((props) => {
@@ -27,7 +27,9 @@ export const LabelsListModal: React.FC<Props> = observer((props) => {
   const { workspaceSlug, projectId } = router.query;
 
   // store
-  const { projectLabel: projectLabelStore, project: projectStore } = useMobxStore();
+  const {
+    projectLabel: { projectLabels, fetchProjectLabels, updateLabel },
+  } = useMobxStore();
 
   // states
   const [query, setQuery] = useState("");
@@ -35,28 +37,24 @@ export const LabelsListModal: React.FC<Props> = observer((props) => {
   // api call to fetch project details
   useSWR(
     workspaceSlug && projectId ? "PROJECT_LABELS" : null,
-    workspaceSlug && projectId
-      ? () => projectStore.fetchProjectLabels(workspaceSlug.toString(), projectId.toString())
-      : null
+    workspaceSlug && projectId ? () => fetchProjectLabels(workspaceSlug.toString(), projectId.toString()) : null
   );
 
   // derived values
-  const issueLabels = projectStore.labels?.[projectId?.toString()!] ?? null;
-
-  const filteredLabels: IIssueLabels[] =
+  const filteredLabels: IIssueLabel[] =
     query === ""
-      ? issueLabels ?? []
-      : issueLabels?.filter((l) => l.name.toLowerCase().includes(query.toLowerCase())) ?? [];
+      ? projectLabels ?? []
+      : projectLabels?.filter((l) => l.name.toLowerCase().includes(query.toLowerCase())) ?? [];
 
   const handleModalClose = () => {
     handleClose();
     setQuery("");
   };
 
-  const addChildLabel = async (label: IIssueLabels) => {
+  const addChildLabel = async (label: IIssueLabel) => {
     if (!workspaceSlug || !projectId) return;
 
-    await projectLabelStore.updateLabel(workspaceSlug.toString(), projectId.toString(), label.id, {
+    await updateLabel(workspaceSlug.toString(), projectId.toString(), label.id, {
       parent: parent?.id!,
     });
   };
@@ -108,7 +106,7 @@ export const LabelsListModal: React.FC<Props> = observer((props) => {
                       )}
                       <ul className="text-sm text-gray-700">
                         {filteredLabels.map((label) => {
-                          const children = issueLabels?.filter((l) => l.parent === label.id);
+                          const children = projectLabels?.filter((l) => l.parent === label.id);
 
                           if (
                             (label.parent === "" || label.parent === null) && // issue does not have any other parent
@@ -128,7 +126,6 @@ export const LabelsListModal: React.FC<Props> = observer((props) => {
                                 }
                                 onClick={() => {
                                   addChildLabel(label);
-                                  handleClose();
                                 }}
                               >
                                 <span
diff --git a/web/components/labels/project-setting-label-group.tsx b/web/components/labels/project-setting-label-group.tsx
index 8db46cb1d..0ad0653b3 100644
--- a/web/components/labels/project-setting-label-group.tsx
+++ b/web/components/labels/project-setting-label-group.tsx
@@ -1,146 +1,164 @@
-import React from "react";
-import { useRouter } from "next/router";
+import React, { Dispatch, SetStateAction, useState } from "react";
 import { Disclosure, Transition } from "@headlessui/react";
 
 // store
 import { observer } from "mobx-react-lite";
-import { useMobxStore } from "lib/mobx/store-provider";
-// ui
-import { CustomMenu } from "@plane/ui";
 // icons
-import { ChevronDown, Component, Pencil, Plus, Trash2, X } from "lucide-react";
+import { ChevronDown, Pencil, Trash2 } from "lucide-react";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
+import {
+  Draggable,
+  DraggableProvided,
+  DraggableProvidedDragHandleProps,
+  DraggableStateSnapshot,
+  Droppable,
+} from "@hello-pangea/dnd";
+import { ICustomMenuItem, LabelItemBlock } from "./label-block/label-item-block";
+import { CreateUpdateLabelInline } from "./create-update-label-inline";
+import { ProjectSettingLabelItem } from "./project-setting-label-item";
+import useDraggableInPortal from "hooks/use-draggable-portal";
 
 type Props = {
-  label: IIssueLabels;
-  labelChildren: IIssueLabels[];
-  handleLabelDelete: () => void;
-  editLabel: (label: IIssueLabels) => void;
-  addLabelToGroup: (parentLabel: IIssueLabels) => void;
+  label: IIssueLabel;
+  labelChildren: IIssueLabel[];
+  handleLabelDelete: (label: IIssueLabel) => void;
+  dragHandleProps: DraggableProvidedDragHandleProps;
+  draggableSnapshot: DraggableStateSnapshot;
+  isUpdating: boolean;
+  setIsUpdating: Dispatch<SetStateAction<boolean>>;
+  isDropDisabled: boolean;
 };
 
 export const ProjectSettingLabelGroup: React.FC<Props> = observer((props) => {
-  const { label, labelChildren, addLabelToGroup, editLabel, handleLabelDelete } = props;
+  const {
+    label,
+    labelChildren,
+    handleLabelDelete,
+    draggableSnapshot: groupDragSnapshot,
+    dragHandleProps,
+    isUpdating,
+    setIsUpdating,
+    isDropDisabled,
+  } = props;
 
-  // router
-  const router = useRouter();
-  const { workspaceSlug, projectId } = router.query;
+  const [isEditLabelForm, setEditLabelForm] = useState(false);
 
-  // store
-  const { projectLabel: projectLabelStore } = useMobxStore();
+  const renderDraggable = useDraggableInPortal();
 
-  const removeFromGroup = (label: IIssueLabels) => {
-    if (!workspaceSlug || !projectId) return;
-
-    projectLabelStore.updateLabel(workspaceSlug.toString(), projectId.toString(), label.id, {
-      parent: null,
-    });
-  };
+  const customMenuItems: ICustomMenuItem[] = [
+    {
+      CustomIcon: Pencil,
+      onClick: () => {
+        setEditLabelForm(true);
+        setIsUpdating(true);
+      },
+      isVisible: true,
+      text: "Edit label",
+    },
+    {
+      CustomIcon: Trash2,
+      onClick: handleLabelDelete,
+      isVisible: true,
+      text: "Delete label",
+    },
+  ];
 
   return (
     <Disclosure
       as="div"
-      className="rounded border-[0.5px] border-custom-border-200 bg-custom-background-100 px-3.5 py-3 text-custom-text-100"
+      className={`rounded border-[0.5px] border-custom-border-200 text-custom-text-100 ${
+        groupDragSnapshot.combineTargetFor ? "bg-custom-background-80" : "bg-custom-background-100"
+      }`}
       defaultOpen
     >
       {({ open }) => (
         <>
-          <div className="flex cursor-pointer items-center justify-between gap-2">
-            <div className="flex items-center gap-2">
-              <Component className="h-4 w-4 text-custom-text-100 flex-shrink-0" />
-              <h6>{label.name}</h6>
-            </div>
-            <div className="flex items-center gap-2">
-              <CustomMenu ellipsis buttonClassName="!text-custom-sidebar-text-400">
-                <CustomMenu.MenuItem onClick={() => addLabelToGroup(label)}>
-                  <span className="flex items-center justify-start gap-2">
-                    <Plus className="h-4 w-4" />
-                    <span>Add more labels</span>
-                  </span>
-                </CustomMenu.MenuItem>
-                <CustomMenu.MenuItem onClick={() => editLabel(label)}>
-                  <span className="flex items-center justify-start gap-2">
-                    <Pencil className="h-4 w-4" />
-                    <span>Edit label</span>
-                  </span>
-                </CustomMenu.MenuItem>
-                <CustomMenu.MenuItem onClick={handleLabelDelete}>
-                  <span className="flex items-center justify-start gap-2">
-                    <Trash2 className="h-4 w-4" />
-                    <span>Delete label</span>
-                  </span>
-                </CustomMenu.MenuItem>
-              </CustomMenu>
-              <Disclosure.Button>
-                <span>
-                  <ChevronDown
-                    className={`h-4 w-4 text-custom-sidebar-text-400 ${!open ? "rotate-90 transform" : ""}`}
-                  />
-                </span>
-              </Disclosure.Button>
-            </div>
-          </div>
-          <Transition
-            show={open}
-            enter="transition duration-100 ease-out"
-            enterFrom="transform opacity-0"
-            enterTo="transform opacity-100"
-            leave="transition duration-75 ease-out"
-            leaveFrom="transform opacity-100"
-            leaveTo="transform opacity-0"
+          <Droppable
+            key={`label.group.droppable.${label.id}`}
+            droppableId={`label.group.droppable.${label.id}`}
+            isCombineEnabled={!groupDragSnapshot.isDragging && !isUpdating}
+            isDropDisabled={groupDragSnapshot.isDragging || isUpdating || isDropDisabled}
           >
-            <Disclosure.Panel>
-              <div className="mt-2.5 ml-6">
-                {labelChildren.map((child) => (
-                  <div
-                    key={child.id}
-                    className="group flex items-center justify-between border-b-[0.5px] border-custom-border-200 px-4 py-2.5 text-sm last:border-0"
-                  >
-                    <h5 className="flex items-center gap-3">
-                      <span
-                        className="h-3.5 w-3.5 flex-shrink-0 rounded-full"
-                        style={{
-                          backgroundColor: child.color && child.color !== "" ? child.color : "#000000",
+            {(droppableProvided) => (
+              <div
+                className={`py-3 pl-1 pr-3 ${!isUpdating && "max-h-full overflow-y-hidden"}`}
+                ref={droppableProvided.innerRef}
+                {...droppableProvided.droppableProps}
+              >
+                <>
+                  <div className="relative flex cursor-pointer items-center justify-between gap-2">
+                    {isEditLabelForm ? (
+                      <CreateUpdateLabelInline
+                        labelForm={isEditLabelForm}
+                        setLabelForm={setEditLabelForm}
+                        isUpdating={true}
+                        labelToUpdate={label}
+                        onClose={() => {
+                          setEditLabelForm(false);
+                          setIsUpdating(false);
                         }}
                       />
-                      {child.name}
-                    </h5>
-                    <div className="flex items-center gap-3.5 pointer-events-none opacity-0 group-hover:pointer-events-auto group-hover:opacity-100">
-                      <div className="h-4 w-4">
-                        <CustomMenu
-                          customButton={
-                            <div className="h-4 w-4">
-                              <Component className="h-4 w-4 leading-4 text-custom-sidebar-text-400 flex-shrink-0" />
-                            </div>
-                          }
-                        >
-                          <CustomMenu.MenuItem onClick={() => removeFromGroup(child)}>
-                            <span className="flex items-center justify-start gap-2">
-                              <X className="h-4 w-4" />
-                              <span>Remove from group</span>
-                            </span>
-                          </CustomMenu.MenuItem>
-                          <CustomMenu.MenuItem onClick={() => editLabel(child)}>
-                            <span className="flex items-center justify-start gap-2">
-                              <Pencil className="h-4 w-4" />
-                              <span>Edit label</span>
-                            </span>
-                          </CustomMenu.MenuItem>
-                        </CustomMenu>
-                      </div>
+                    ) : (
+                      <LabelItemBlock
+                        label={label}
+                        isDragging={groupDragSnapshot.isDragging}
+                        customMenuItems={customMenuItems}
+                        dragHandleProps={dragHandleProps}
+                        handleLabelDelete={handleLabelDelete}
+                        isLabelGroup={true}
+                      />
+                    )}
 
-                      <div className="flex items-center">
-                        <button className="flex items-center justify-start gap-2" onClick={handleLabelDelete}>
-                          <X className="h-[18px] w-[18px] text-custom-sidebar-text-400 flex-shrink-0" />
-                        </button>
-                      </div>
-                    </div>
+                    <Disclosure.Button>
+                      <span>
+                        <ChevronDown
+                          className={`h-4 w-4 text-custom-sidebar-text-400 ${!open ? "rotate-90 transform" : ""}`}
+                        />
+                      </span>
+                    </Disclosure.Button>
                   </div>
-                ))}
+                  <Transition
+                    show={open}
+                    enter="transition duration-100 ease-out"
+                    enterFrom="transform opacity-0"
+                    enterTo="transform opacity-100"
+                    leave="transition duration-75 ease-out"
+                    leaveFrom="transform opacity-100"
+                    leaveTo="transform opacity-0"
+                  >
+                    <Disclosure.Panel>
+                      <div className="mt-2.5 ml-6">
+                        {labelChildren.map((child, index) => (
+                          <div key={child.id} className={`group w-full flex items-center text-sm`}>
+                            <Draggable
+                              draggableId={`label.draggable.${child.id}`}
+                              index={index}
+                              isDragDisabled={groupDragSnapshot.isDragging || isUpdating}
+                            >
+                              {renderDraggable((provided: DraggableProvided, snapshot: DraggableStateSnapshot) => (
+                                <div className="w-full py-1" ref={provided.innerRef} {...provided.draggableProps}>
+                                  <ProjectSettingLabelItem
+                                    label={child}
+                                    handleLabelDelete={() => handleLabelDelete(child)}
+                                    draggableSnapshot={snapshot}
+                                    dragHandleProps={provided.dragHandleProps!}
+                                    setIsUpdating={setIsUpdating}
+                                    isChild
+                                  />
+                                </div>
+                              ))}
+                            </Draggable>
+                          </div>
+                        ))}
+                      </div>
+                    </Disclosure.Panel>
+                  </Transition>
+                  {droppableProvided.placeholder}
+                </>
               </div>
-            </Disclosure.Panel>
-          </Transition>
+            )}
+          </Droppable>
         </>
       )}
     </Disclosure>
diff --git a/web/components/labels/project-setting-label-item.tsx b/web/components/labels/project-setting-label-item.tsx
new file mode 100644
index 000000000..29ac427af
--- /dev/null
+++ b/web/components/labels/project-setting-label-item.tsx
@@ -0,0 +1,91 @@
+import React, { Dispatch, SetStateAction, useState } from "react";
+import { useRouter } from "next/router";
+import { useMobxStore } from "lib/mobx/store-provider";
+import { DraggableProvidedDragHandleProps, DraggableStateSnapshot } from "@hello-pangea/dnd";
+// types
+import { IIssueLabel } from "types";
+//icons
+import { X, Pencil } from "lucide-react";
+//components
+import { ICustomMenuItem, LabelItemBlock } from "./label-block/label-item-block";
+import { CreateUpdateLabelInline } from "./create-update-label-inline";
+
+type Props = {
+  label: IIssueLabel;
+  handleLabelDelete: (label: IIssueLabel) => void;
+  draggableSnapshot: DraggableStateSnapshot;
+  dragHandleProps: DraggableProvidedDragHandleProps;
+  setIsUpdating: Dispatch<SetStateAction<boolean>>;
+  isChild: boolean;
+};
+
+export const ProjectSettingLabelItem: React.FC<Props> = (props) => {
+  const { label, setIsUpdating, handleLabelDelete, draggableSnapshot, dragHandleProps, isChild } = props;
+
+  const { combineTargetFor, isDragging } = draggableSnapshot;
+
+  // router
+  const router = useRouter();
+  const { workspaceSlug, projectId } = router.query;
+
+  // store
+  const { projectLabel: projectLabelStore } = useMobxStore();
+
+  //state
+  const [isEditLabelForm, setEditLabelForm] = useState(false);
+
+  const removeFromGroup = (label: IIssueLabel) => {
+    if (!workspaceSlug || !projectId) return;
+
+    projectLabelStore.updateLabel(workspaceSlug.toString(), projectId.toString(), label.id, {
+      parent: null,
+    });
+  };
+
+  const customMenuItems: ICustomMenuItem[] = [
+    {
+      CustomIcon: X,
+      onClick: removeFromGroup,
+      isVisible: !!label.parent,
+      text: "Remove from group",
+    },
+    {
+      CustomIcon: Pencil,
+      onClick: () => {
+        setEditLabelForm(true);
+        setIsUpdating(true);
+      },
+      isVisible: true,
+      text: "Edit label",
+    },
+  ];
+
+  return (
+    <div
+      className={`relative group flex items-center justify-between gap-2 space-y-3 rounded border-[0.5px] border-custom-border-200 ${
+        !isChild && combineTargetFor ? "bg-custom-background-80" : ""
+      } ${isDragging ? "shadow-custom-shadow-xs bg-custom-background-80" : ""} bg-custom-background-100 px-1 py-2.5`}
+    >
+      {isEditLabelForm ? (
+        <CreateUpdateLabelInline
+          labelForm={isEditLabelForm}
+          setLabelForm={setEditLabelForm}
+          isUpdating={true}
+          labelToUpdate={label}
+          onClose={() => {
+            setEditLabelForm(false);
+            setIsUpdating(false);
+          }}
+        />
+      ) : (
+        <LabelItemBlock
+          label={label}
+          isDragging={isDragging}
+          customMenuItems={customMenuItems}
+          dragHandleProps={dragHandleProps}
+          handleLabelDelete={handleLabelDelete}
+        />
+      )}
+    </div>
+  );
+};
diff --git a/web/components/labels/project-setting-label-list-item.tsx b/web/components/labels/project-setting-label-list-item.tsx
deleted file mode 100644
index fec3bcd2e..000000000
--- a/web/components/labels/project-setting-label-list-item.tsx
+++ /dev/null
@@ -1,73 +0,0 @@
-import React, { useRef, useState } from "react";
-
-//hook
-import useOutsideClickDetector from "hooks/use-outside-click-detector";
-// ui
-import { CustomMenu } from "@plane/ui";
-// types
-import { IIssueLabels } from "types";
-//icons
-import { Component, X, Pencil } from "lucide-react";
-
-type Props = {
-  label: IIssueLabels;
-  addLabelToGroup: (parentLabel: IIssueLabels) => void;
-  editLabel: (label: IIssueLabels) => void;
-  handleLabelDelete: () => void;
-};
-
-export const ProjectSettingLabelItem: React.FC<Props> = (props) => {
-  const { label, addLabelToGroup, editLabel, handleLabelDelete } = props;
-
-  const [isMenuActive, setIsMenuActive] = useState(false);
-  const actionSectionRef = useRef<HTMLDivElement | null>(null);
-
-  useOutsideClickDetector(actionSectionRef, () => setIsMenuActive(false));
-
-  return (
-    <div className="relative group flex items-center justify-between gap-2 space-y-3 rounded border-[0.5px] border-custom-border-200 bg-custom-background-100 px-4 py-2.5">
-      <div className="flex items-center gap-3">
-        <span
-          className="h-3.5 w-3.5 flex-shrink-0 rounded-full"
-          style={{
-            backgroundColor: label.color && label.color !== "" ? label.color : "#000",
-          }}
-        />
-        <h6 className="text-sm">{label.name}</h6>
-      </div>
-
-      <div
-        ref={actionSectionRef}
-        className={`absolute -top-0.5 right-3 flex items-start gap-3.5 pointer-events-none opacity-0 group-hover:pointer-events-auto group-hover:opacity-100 ${
-          isMenuActive ? "opacity-100" : ""
-        }`}
-      >
-        <CustomMenu
-          customButton={
-            <div className="h-4 w-4" onClick={() => setIsMenuActive(!isMenuActive)}>
-              <Component className="h-4 w-4 leading-4 text-custom-sidebar-text-400 flex-shrink-0" />
-            </div>
-          }
-        >
-          <CustomMenu.MenuItem onClick={() => addLabelToGroup(label)}>
-            <span className="flex items-center justify-start gap-2">
-              <Component className="h-4 w-4 leading-4 text-custom-sidebar-text-400 flex-shrink-0" />
-              <span>Convert to group</span>
-            </span>
-          </CustomMenu.MenuItem>
-          <CustomMenu.MenuItem onClick={() => editLabel(label)}>
-            <span className="flex items-center justify-start gap-2">
-              <Pencil className="h-4 w-4" />
-              <span>Edit label</span>
-            </span>
-          </CustomMenu.MenuItem>
-        </CustomMenu>
-        <div className="py-0.5">
-          <button className="flex h-4 w-4 items-center justify-start gap-2" onClick={handleLabelDelete}>
-            <X className="h-4 w-4  text-custom-sidebar-text-400 flex-shrink-0" />
-          </button>
-        </div>
-      </div>
-    </div>
-  );
-};
diff --git a/web/components/labels/project-setting-label-list.tsx b/web/components/labels/project-setting-label-list.tsx
index 84bda8f97..48ca0f07f 100644
--- a/web/components/labels/project-setting-label-list.tsx
+++ b/web/components/labels/project-setting-label-list.tsx
@@ -1,75 +1,96 @@
 import React, { useState, useRef } from "react";
 import { useRouter } from "next/router";
 import useSWR from "swr";
+import { observer } from "mobx-react-lite";
+import {
+  DragDropContext,
+  Draggable,
+  DraggableProvided,
+  DraggableStateSnapshot,
+  DropResult,
+  Droppable,
+} from "@hello-pangea/dnd";
 
 // store
-import { observer } from "mobx-react-lite";
 import { useMobxStore } from "lib/mobx/store-provider";
 // components
-import {
-  CreateUpdateLabelInline,
-  DeleteLabelModal,
-  LabelsListModal,
-  ProjectSettingLabelItem,
-  ProjectSettingLabelGroup,
-} from "components/labels";
+import { CreateUpdateLabelInline, DeleteLabelModal, ProjectSettingLabelGroup } from "components/labels";
 // ui
 import { Button, Loader } from "@plane/ui";
 import { EmptyState } from "components/common";
 // images
 import emptyLabel from "public/empty-state/label.svg";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
+//component
+import { ProjectSettingLabelItem } from "./project-setting-label-item";
+import useDraggableInPortal from "hooks/use-draggable-portal";
+
+const LABELS_ROOT = "labels.root";
 
 export const ProjectSettingsLabelList: React.FC = observer(() => {
   // router
   const router = useRouter();
   const { workspaceSlug, projectId } = router.query;
 
+  const renderDraggable = useDraggableInPortal();
+
   // store
-  const { project: projectStore } = useMobxStore();
-
+  const {
+    projectLabel: { fetchProjectLabels, projectLabels, updateLabelPosition, projectLabelsTree },
+  } = useMobxStore();
   // states
-  const [labelForm, setLabelForm] = useState(false);
+  const [showLabelForm, setLabelForm] = useState(false);
   const [isUpdating, setIsUpdating] = useState(false);
-  const [labelsListModal, setLabelsListModal] = useState(false);
-  const [labelToUpdate, setLabelToUpdate] = useState<IIssueLabels | null>(null);
-  const [parentLabel, setParentLabel] = useState<IIssueLabels | undefined>(undefined);
-  const [selectDeleteLabel, setSelectDeleteLabel] = useState<IIssueLabels | null>(null);
-
+  const [selectDeleteLabel, setSelectDeleteLabel] = useState<IIssueLabel | null>(null);
+  const [isDraggingGroup, setIsDraggingGroup] = useState(false);
   // ref
   const scrollToRef = useRef<HTMLFormElement>(null);
 
   // api call to fetch project details
   useSWR(
     workspaceSlug && projectId ? "PROJECT_LABELS" : null,
-    workspaceSlug && projectId
-      ? () => projectStore.fetchProjectLabels(workspaceSlug.toString(), projectId.toString())
-      : null
+    workspaceSlug && projectId ? () => fetchProjectLabels(workspaceSlug.toString(), projectId.toString()) : null
   );
 
-  // derived values
-  const issueLabels = projectStore.labels?.[projectId?.toString()!] ?? null;
-
   const newLabel = () => {
     setIsUpdating(false);
     setLabelForm(true);
   };
 
-  const addLabelToGroup = (parentLabel: IIssueLabels) => {
-    setLabelsListModal(true);
-    setParentLabel(parentLabel);
-  };
+  const onDragEnd = (result: DropResult) => {
+    const { combine, draggableId, destination, source } = result;
 
-  const editLabel = (label: IIssueLabels) => {
-    setLabelForm(true);
-    setIsUpdating(true);
-    setLabelToUpdate(label);
+    // return if dropped outside the DragDropContext
+    if (!combine && !destination) return;
+
+    const childLabel = draggableId.split(".")[2];
+    let parentLabel: string | undefined | null = destination?.droppableId?.split(".")[3];
+    const index = destination?.index || 0;
+
+    const prevParentLabel: string | undefined | null = source?.droppableId?.split(".")[3];
+    const prevIndex = source?.index;
+
+    if (combine && combine.draggableId) parentLabel = combine?.draggableId?.split(".")[2];
+
+    if (destination?.droppableId === LABELS_ROOT) parentLabel = null;
+
+    if (result.reason == "DROP" && childLabel != parentLabel) {
+      updateLabelPosition(
+        workspaceSlug?.toString()!,
+        projectId?.toString()!,
+        childLabel,
+        parentLabel,
+        index,
+        prevParentLabel == parentLabel,
+        prevIndex
+      );
+      return;
+    }
   };
 
   return (
     <>
-      <LabelsListModal isOpen={labelsListModal} parent={parentLabel} handleClose={() => setLabelsListModal(false)} />
       <DeleteLabelModal
         isOpen={!!selectDeleteLabel}
         data={selectDeleteLabel ?? null}
@@ -82,64 +103,105 @@ export const ProjectSettingsLabelList: React.FC = observer(() => {
           Add label
         </Button>
       </div>
-      <div className="space-y-3 py-6 h-full w-full">
-        {labelForm && (
-          <CreateUpdateLabelInline
-            labelForm={labelForm}
-            setLabelForm={setLabelForm}
-            isUpdating={isUpdating}
-            labelToUpdate={labelToUpdate}
-            ref={scrollToRef}
-            onClose={() => {
-              setLabelForm(false);
-              setIsUpdating(false);
-              setLabelToUpdate(null);
-            }}
-          />
+      <div className="w-full">
+        {showLabelForm && (
+          <div className="w-full rounded border border-custom-border-200 px-3.5 py-2">
+            <CreateUpdateLabelInline
+              labelForm={showLabelForm}
+              setLabelForm={setLabelForm}
+              isUpdating={isUpdating}
+              ref={scrollToRef}
+              onClose={() => {
+                setLabelForm(false);
+                setIsUpdating(false);
+              }}
+            />
+          </div>
         )}
-
         {/* labels */}
-        {issueLabels &&
-          issueLabels.map((label) => {
-            const children = issueLabels?.filter((l) => l.parent === label.id);
+        <>
+          {projectLabelsTree && (
+            <DragDropContext
+              onDragEnd={onDragEnd}
+              autoScrollerOptions={{
+                startFromPercentage: 1,
+                disabled: false,
+                maxScrollAtPercentage: 0,
+                maxPixelScroll: 2,
+              }}
+            >
+              <Droppable
+                droppableId={LABELS_ROOT}
+                isCombineEnabled={!isDraggingGroup}
+                ignoreContainerClipping={true}
+                isDropDisabled={isUpdating}
+              >
+                {(droppableProvided, droppableSnapshot) => (
+                  <div className={`mt-3`} ref={droppableProvided.innerRef} {...droppableProvided.droppableProps}>
+                    {projectLabelsTree.map((label, index) => {
+                      if (label.children && label.children.length) {
+                        return (
+                          <Draggable
+                            key={`label.draggable.${label.id}`}
+                            draggableId={`label.draggable.${label.id}.group`}
+                            index={index}
+                            isDragDisabled={isUpdating}
+                          >
+                            {(provided: DraggableProvided, snapshot: DraggableStateSnapshot) => {
+                              const isGroup = droppableSnapshot.draggingFromThisWith?.split(".")[3] === "group";
+                              setIsDraggingGroup(isGroup);
 
-            if (children && children.length === 0) {
-              if (!label.parent)
-                return (
-                  <ProjectSettingLabelItem
-                    key={label.id}
-                    label={label}
-                    addLabelToGroup={() => addLabelToGroup(label)}
-                    editLabel={(label) => {
-                      editLabel(label);
-                      scrollToRef.current?.scrollIntoView({
-                        behavior: "smooth",
-                      });
-                    }}
-                    handleLabelDelete={() => setSelectDeleteLabel(label)}
-                  />
-                );
-            } else {
-              return (
-                <ProjectSettingLabelGroup
-                  key={label.id}
-                  label={label}
-                  labelChildren={children}
-                  addLabelToGroup={addLabelToGroup}
-                  editLabel={(label) => {
-                    editLabel(label);
-                    scrollToRef.current?.scrollIntoView({
-                      behavior: "smooth",
-                    });
-                  }}
-                  handleLabelDelete={() => setSelectDeleteLabel(label)}
-                />
-              );
-            }
-          })}
+                              return (
+                                <div ref={provided.innerRef} {...provided.draggableProps} className="mt-3">
+                                  <ProjectSettingLabelGroup
+                                    key={label.id}
+                                    label={label}
+                                    labelChildren={label.children || []}
+                                    isDropDisabled={isGroup}
+                                    dragHandleProps={provided.dragHandleProps!}
+                                    handleLabelDelete={(label: IIssueLabel) => setSelectDeleteLabel(label)}
+                                    draggableSnapshot={snapshot}
+                                    isUpdating={isUpdating}
+                                    setIsUpdating={setIsUpdating}
+                                  />
+                                </div>
+                              );
+                            }}
+                          </Draggable>
+                        );
+                      }
+                      return (
+                        <Draggable
+                          key={`label.draggable.${label.id}`}
+                          draggableId={`label.draggable.${label.id}`}
+                          index={index}
+                          isDragDisabled={isUpdating}
+                        >
+                          {renderDraggable((provided: DraggableProvided, snapshot: DraggableStateSnapshot) => (
+                            <div ref={provided.innerRef} {...provided.draggableProps} className="mt-3">
+                              <ProjectSettingLabelItem
+                                dragHandleProps={provided.dragHandleProps!}
+                                draggableSnapshot={snapshot}
+                                label={label}
+                                setIsUpdating={setIsUpdating}
+                                handleLabelDelete={(label) => setSelectDeleteLabel(label)}
+                                isChild={false}
+                              />
+                            </div>
+                          ))}
+                        </Draggable>
+                      );
+                    })}
+                    {droppableProvided.placeholder}
+                  </div>
+                )}
+              </Droppable>
+            </DragDropContext>
+          )}
+        </>
 
         {/* loading state */}
-        {!issueLabels && (
+        {!projectLabels && (
           <Loader className="space-y-5">
             <Loader.Item height="42px" />
             <Loader.Item height="42px" />
@@ -149,7 +211,7 @@ export const ProjectSettingsLabelList: React.FC = observer(() => {
         )}
 
         {/* empty state */}
-        {issueLabels && issueLabels.length === 0 && (
+        {projectLabels && projectLabels.length === 0 && (
           <EmptyState
             title="No labels yet"
             description="Create labels to help organize and filter issues in you project"
diff --git a/web/components/project/member-list.tsx b/web/components/project/member-list.tsx
index ba2a0198b..61802c862 100644
--- a/web/components/project/member-list.tsx
+++ b/web/components/project/member-list.tsx
@@ -24,7 +24,6 @@ export const ProjectMemberList: React.FC = observer(() => {
 
   // store
   const {
-    project: projectStore,
     projectMember: { projectMembers, fetchProjectMembers },
   } = useMobxStore();
 
diff --git a/web/components/ui/labels-list.tsx b/web/components/ui/labels-list.tsx
index c7e4306a2..9fdf7b326 100644
--- a/web/components/ui/labels-list.tsx
+++ b/web/components/ui/labels-list.tsx
@@ -2,10 +2,10 @@ import { FC } from "react";
 // ui
 import { Tooltip } from "@plane/ui";
 // types
-import { IIssueLabels } from "types";
+import { IIssueLabel } from "types";
 
 type IssueLabelsListProps = {
-  labels?: (IIssueLabels | undefined)[];
+  labels?: (IIssueLabel | undefined)[];
   length?: number;
   showLength?: boolean;
 };
diff --git a/web/components/views/form.tsx b/web/components/views/form.tsx
index 69557a7c1..3570353cc 100644
--- a/web/components/views/form.tsx
+++ b/web/components/views/form.tsx
@@ -27,7 +27,7 @@ const defaultValues: Partial<IProjectView> = {
 
 export const ProjectViewForm: React.FC<Props> = observer(({ handleFormSubmit, handleClose, data, preLoadedData }) => {
   const {
-    project: projectStore,
+    projectLabel: { projectLabels },
     projectState: projectStateStore,
     projectMember: { projectMembers },
   } = useMobxStore();
@@ -167,7 +167,7 @@ export const ProjectViewForm: React.FC<Props> = observer(({ handleFormSubmit, ha
                       });
                     }}
                     layoutDisplayFiltersOptions={ISSUE_DISPLAY_FILTERS_BY_LAYOUT.issues.list}
-                    labels={projectStore.projectLabels ?? undefined}
+                    labels={projectLabels ?? undefined}
                     members={projectMembers?.map((m) => m.member) ?? undefined}
                     states={projectStateStore.projectStates ?? undefined}
                   />
@@ -181,7 +181,7 @@ export const ProjectViewForm: React.FC<Props> = observer(({ handleFormSubmit, ha
                 appliedFilters={selectedFilters}
                 handleClearAllFilters={clearAllFilters}
                 handleRemoveFilter={handleRemoveFilter}
-                labels={projectStore.projectLabels ?? []}
+                labels={projectLabels ?? []}
                 members={projectMembers?.map((m) => m.member) ?? []}
                 states={projectStateStore.projectStates ?? []}
               />
diff --git a/web/helpers/array.helper.ts b/web/helpers/array.helper.ts
index a55ad8fd9..7aa434755 100644
--- a/web/helpers/array.helper.ts
+++ b/web/helpers/array.helper.ts
@@ -1,3 +1,5 @@
+import { IIssueLabelTree } from "types";
+
 export const groupBy = (array: any[], key: string) => {
   const innerKey = key.split("."); // split the key by dot
   return array.reduce((result, currentValue) => {
@@ -74,3 +76,17 @@ export const orderGroupedDataByField = <T>(groupedData: GroupedItems<T>, orderBy
   }
   return groupedData;
 };
+
+export const buildTree = (array: any[], parent = null) => {
+  const tree: IIssueLabelTree[] = [];
+
+  array.forEach((item: any) => {
+    if (item.parent === parent) {
+      const children = buildTree(array, item.id);
+      item.children = children;
+      tree.push(item);
+    }
+  });
+
+  return tree;
+};
diff --git a/web/hooks/use-draggable-portal.ts b/web/hooks/use-draggable-portal.ts
new file mode 100644
index 000000000..383c277f3
--- /dev/null
+++ b/web/hooks/use-draggable-portal.ts
@@ -0,0 +1,31 @@
+import { createPortal } from "react-dom";
+import { useEffect, useRef } from "react";
+import { DraggableProvided, DraggableStateSnapshot } from "@hello-pangea/dnd";
+
+const useDraggableInPortal = () => {
+  const self = useRef<Element>();
+
+  useEffect(() => {
+    const div = document.createElement("div");
+    div.style.position = "absolute";
+    div.style.pointerEvents = "none";
+    div.style.top = "0";
+    div.style.width = "100%";
+    div.style.height = "100%";
+    self.current = div;
+    document.body.appendChild(div);
+    return () => {
+      document.body.removeChild(div);
+    };
+  }, [self.current]);
+
+  return (render: any) => (provided: DraggableProvided, snapshot: DraggableStateSnapshot) => {
+    const element = render(provided, snapshot);
+    if (self.current && snapshot?.isDragging) {
+      return createPortal(element, self.current);
+    }
+    return element;
+  };
+};
+
+export default useDraggableInPortal;
diff --git a/web/layouts/auth-layout/project-wrapper.tsx b/web/layouts/auth-layout/project-wrapper.tsx
index 225e92f2a..8e7d27f19 100644
--- a/web/layouts/auth-layout/project-wrapper.tsx
+++ b/web/layouts/auth-layout/project-wrapper.tsx
@@ -20,7 +20,8 @@ export const ProjectAuthWrapper: FC<IProjectAuthWrapper> = observer((props) => {
   // store
   const {
     user: { fetchUserProjectInfo, projectMemberInfo, hasPermissionToProject },
-    project: { fetchProjectDetails, fetchProjectLabels, fetchProjectEstimates, workspaceProjects },
+    project: { fetchProjectDetails, fetchProjectEstimates, workspaceProjects },
+    projectLabel: { fetchProjectLabels },
     projectMember: { fetchProjectMembers },
     projectState: { fetchProjectStates },
     cycle: { fetchCycles },
diff --git a/web/pages/[workspaceSlug]/projects/[projectId]/pages/[pageId].tsx b/web/pages/[workspaceSlug]/projects/[projectId]/pages/[pageId].tsx
index 40391234d..dd1efde15 100644
--- a/web/pages/[workspaceSlug]/projects/[projectId]/pages/[pageId].tsx
+++ b/web/pages/[workspaceSlug]/projects/[projectId]/pages/[pageId].tsx
@@ -33,7 +33,7 @@ import { copyTextToClipboard } from "helpers/string.helper";
 import { orderArrayBy } from "helpers/array.helper";
 // types
 import { NextPageWithLayout } from "types/app";
-import { IIssueLabels, IPage, IPageBlock, IProjectMember } from "types";
+import { IIssueLabel, IPage, IPageBlock, IProjectMember } from "types";
 // fetch-keys
 import {
   PAGE_BLOCKS_LIST,
@@ -86,7 +86,7 @@ const PageDetailsPage: NextPageWithLayout = () => {
       : null
   );
 
-  const { data: labels } = useSWR<IIssueLabels[]>(
+  const { data: labels } = useSWR<IIssueLabel[]>(
     workspaceSlug && projectId ? PROJECT_ISSUE_LABELS(projectId as string) : null,
     workspaceSlug && projectId
       ? () => issueLabelService.getProjectIssueLabels(workspaceSlug as string, projectId as string)
diff --git a/web/services/issue/issue_label.service.ts b/web/services/issue/issue_label.service.ts
index 00b945d01..d6bab8348 100644
--- a/web/services/issue/issue_label.service.ts
+++ b/web/services/issue/issue_label.service.ts
@@ -3,7 +3,7 @@ import { API_BASE_URL } from "helpers/common.helper";
 import { APIService } from "services/api.service";
 import { TrackEventService } from "services/track_event.service";
 // types
-import { IIssueLabels, IUser } from "types";
+import { IIssueLabel, IUser } from "types";
 
 const trackEventServices = new TrackEventService();
 
@@ -12,7 +12,7 @@ export class IssueLabelService extends APIService {
     super(API_BASE_URL);
   }
 
-  async getWorkspaceIssueLabels(workspaceSlug: string): Promise<IIssueLabels[]> {
+  async getWorkspaceIssueLabels(workspaceSlug: string): Promise<IIssueLabel[]> {
     return this.get(`/api/workspaces/${workspaceSlug}/labels/`)
       .then((response) => response?.data)
       .catch((error) => {
@@ -20,7 +20,7 @@ export class IssueLabelService extends APIService {
       });
   }
 
-  async getProjectIssueLabels(workspaceSlug: string, projectId: string): Promise<IIssueLabels[]> {
+  async getProjectIssueLabels(workspaceSlug: string, projectId: string): Promise<IIssueLabel[]> {
     return this.get(`/api/workspaces/${workspaceSlug}/projects/${projectId}/issue-labels/`)
       .then((response) => response?.data)
       .catch((error) => {
@@ -33,9 +33,9 @@ export class IssueLabelService extends APIService {
     projectId: string,
     data: any,
     user: IUser | undefined
-  ): Promise<IIssueLabels> {
+  ): Promise<IIssueLabel> {
     return this.post(`/api/workspaces/${workspaceSlug}/projects/${projectId}/issue-labels/`, data)
-      .then((response: { data: IIssueLabels; [key: string]: any }) => {
+      .then((response: { data: IIssueLabel; [key: string]: any }) => {
         trackEventServices.trackIssueLabelEvent(
           {
             workSpaceId: response?.data?.workspace_detail?.id,
diff --git a/web/store/project/project-label.store.ts b/web/store/project/project-label.store.ts
index f4ea6892a..d6a804a60 100644
--- a/web/store/project/project-label.store.ts
+++ b/web/store/project/project-label.store.ts
@@ -1,30 +1,49 @@
-import { observable, action, makeObservable, runInAction } from "mobx";
+import { observable, action, makeObservable, runInAction, computed } from "mobx";
 // types
 import { RootStore } from "../root";
-import { IIssueLabels } from "types";
+import { IIssueLabel, IIssueLabelTree } from "types";
 // services
 import { IssueLabelService } from "services/issue";
 import { ProjectService } from "services/project";
+import { buildTree } from "helpers/array.helper";
 
 export interface IProjectLabelStore {
   loader: boolean;
   error: any | null;
-
-  // labels
-  createLabel: (workspaceSlug: string, projectId: string, data: Partial<IIssueLabels>) => Promise<IIssueLabels>;
+  labels: {
+    [projectId: string]: IIssueLabel[] | null; // project_id: labels
+  } | null;
+  // computed
+  projectLabels: IIssueLabel[] | null;
+  projectLabelsTree: IIssueLabelTree[] | null;
+  // actions
+  getProjectLabelById: (labelId: string) => IIssueLabel | null;
+  fetchProjectLabels: (workspaceSlug: string, projectId: string) => Promise<void>;
+  createLabel: (workspaceSlug: string, projectId: string, data: Partial<IIssueLabel>) => Promise<IIssueLabel>;
   updateLabel: (
     workspaceSlug: string,
     projectId: string,
     labelId: string,
-    data: Partial<IIssueLabels>
-  ) => Promise<IIssueLabels>;
+    data: Partial<IIssueLabel>
+  ) => Promise<IIssueLabel>;
+  updateLabelPosition: (
+    workspaceSlug: string,
+    projectId: string,
+    labelId: string,
+    parentId: string | null | undefined,
+    index: number,
+    isSameParent: boolean,
+    prevIndex: number | undefined
+  ) => Promise<IIssueLabel>;
   deleteLabel: (workspaceSlug: string, projectId: string, labelId: string) => Promise<void>;
 }
 
 export class ProjectLabelStore implements IProjectLabelStore {
   loader: boolean = false;
   error: any | null = null;
-
+  labels: {
+    [projectId: string]: IIssueLabel[]; // projectId: labels
+  } | null = {};
   // root store
   rootStore;
   // service
@@ -34,12 +53,18 @@ export class ProjectLabelStore implements IProjectLabelStore {
   constructor(_rootStore: RootStore) {
     makeObservable(this, {
       // observable
-      loader: observable,
-      error: observable,
-
-      // labels
+      loader: observable.ref,
+      error: observable.ref,
+      labels: observable.ref,
+      // computed
+      projectLabels: computed,
+      projectLabelsTree: computed,
+      // actions
+      getProjectLabelById: action,
+      fetchProjectLabels: action,
       createLabel: action,
       updateLabel: action,
+      updateLabelPosition: action,
       deleteLabel: action,
     });
 
@@ -48,7 +73,51 @@ export class ProjectLabelStore implements IProjectLabelStore {
     this.issueLabelService = new IssueLabelService();
   }
 
-  createLabel = async (workspaceSlug: string, projectId: string, data: Partial<IIssueLabels>) => {
+  get projectLabels() {
+    if (!this.rootStore.project.projectId) return null;
+    return this.labels?.[this.rootStore.project.projectId]?.sort((a, b) => a.name.localeCompare(b.name)) || null;
+  }
+
+  get projectLabelsTree() {
+    if (!this.rootStore.project.projectId) return null;
+    const currentProjectLabels = this.labels?.[this.rootStore.project.projectId];
+    if (!currentProjectLabels) return null;
+
+    currentProjectLabels.sort((labelA: IIssueLabel, labelB: IIssueLabel) => labelB.sort_order - labelA.sort_order);
+    return buildTree(currentProjectLabels);
+  }
+
+  getProjectLabelById = (labelId: string) => {
+    if (!this.rootStore.project.projectId) return null;
+    const labels = this.projectLabels;
+    if (!labels) return null;
+    const labelInfo: IIssueLabel | null = labels.find((label) => label.id === labelId) || null;
+    return labelInfo;
+  };
+
+  fetchProjectLabels = async (workspaceSlug: string, projectId: string) => {
+    try {
+      this.loader = true;
+      this.error = null;
+
+      const labelResponse = await this.issueLabelService.getProjectIssueLabels(workspaceSlug, projectId);
+
+      runInAction(() => {
+        this.labels = {
+          ...this.labels,
+          [projectId]: labelResponse,
+        };
+        this.loader = false;
+        this.error = null;
+      });
+    } catch (error) {
+      console.error(error);
+      this.loader = false;
+      this.error = error;
+    }
+  };
+
+  createLabel = async (workspaceSlug: string, projectId: string, data: Partial<IIssueLabel>) => {
     try {
       const response = await this.issueLabelService.createIssueLabel(
         workspaceSlug,
@@ -58,9 +127,9 @@ export class ProjectLabelStore implements IProjectLabelStore {
       );
 
       runInAction(() => {
-        this.rootStore.project.labels = {
-          ...this.rootStore.project.labels,
-          [projectId]: [response, ...(this.rootStore.project.labels?.[projectId] || [])],
+        this.labels = {
+          ...this.labels,
+          [projectId]: [response, ...(this.labels?.[projectId] || [])],
         };
       });
 
@@ -71,16 +140,70 @@ export class ProjectLabelStore implements IProjectLabelStore {
     }
   };
 
-  updateLabel = async (workspaceSlug: string, projectId: string, labelId: string, data: Partial<IIssueLabels>) => {
-    const originalLabel = this.rootStore.project.getProjectLabelById(labelId);
+  updateLabelPosition = async (
+    workspaceSlug: string,
+    projectId: string,
+    labelId: string,
+    parentId: string | null | undefined,
+    index: number,
+    isSameParent: boolean,
+    prevIndex: number | undefined
+  ) => {
+    const labels = this.labels;
+    const currLabel = labels?.[projectId]?.find((label) => label.id === labelId);
+    const labelTree = this.projectLabelsTree;
+
+    let currentArray: IIssueLabel[];
+
+    if (!currLabel || !labelTree) return;
+
+    const data: Partial<IIssueLabel> = { parent: parentId };
+    //find array in which the label is to be added
+    if (!parentId) currentArray = labelTree;
+    else currentArray = labelTree?.find((label) => label.id === parentId)?.children || [];
+
+    //Add the array at the destination
+    if (isSameParent && prevIndex !== undefined) currentArray.splice(prevIndex, 1);
+
+    currentArray.splice(index, 0, currLabel);
+
+    //if currently adding to a new array, then let backend assign a sort order
+    if (currentArray.length > 1) {
+      let prevSortOrder: number | undefined, nextSortOrder: number | undefined;
+
+      if (typeof currentArray[index - 1] !== "undefined") {
+        prevSortOrder = currentArray[index - 1].sort_order;
+      }
+
+      if (typeof currentArray[index + 1] !== "undefined") {
+        nextSortOrder = currentArray[index + 1].sort_order;
+      }
+
+      let sortOrder: number;
+
+      //based on the next and previous labels calculate current sort order
+      if (prevSortOrder && nextSortOrder) {
+        sortOrder = (prevSortOrder + nextSortOrder) / 2;
+      } else if (nextSortOrder) {
+        sortOrder = nextSortOrder + 10000;
+      } else {
+        sortOrder = prevSortOrder! / 2;
+      }
+
+      data.sort_order = sortOrder;
+    }
+
+    return this.updateLabel(workspaceSlug, projectId, labelId, data);
+  };
+
+  updateLabel = async (workspaceSlug: string, projectId: string, labelId: string, data: Partial<IIssueLabel>) => {
+    const originalLabel = this.getProjectLabelById(labelId);
 
     runInAction(() => {
-      this.rootStore.project.labels = {
-        ...this.rootStore.project.labels,
+      this.labels = {
+        ...this.labels,
         [projectId]:
-          this.rootStore.project.labels?.[projectId]?.map((label) =>
-            label.id === labelId ? { ...label, ...data } : label
-          ) || [],
+          this.labels?.[projectId]?.map((label) => (label.id === labelId ? { ...label, ...data } : label)) || [],
       };
     });
 
@@ -97,9 +220,9 @@ export class ProjectLabelStore implements IProjectLabelStore {
     } catch (error) {
       console.log("Failed to update label from project store");
       runInAction(() => {
-        this.rootStore.project.labels = {
-          ...this.rootStore.project.labels,
-          [projectId]: (this.rootStore.project.labels?.[projectId] || [])?.map((label) =>
+        this.labels = {
+          ...this.labels,
+          [projectId]: (this.labels?.[projectId] || [])?.map((label) =>
             label.id === labelId ? { ...label, ...originalLabel } : label
           ),
         };
@@ -109,12 +232,12 @@ export class ProjectLabelStore implements IProjectLabelStore {
   };
 
   deleteLabel = async (workspaceSlug: string, projectId: string, labelId: string) => {
-    const originalLabelList = this.rootStore.project.projectLabels;
+    const originalLabelList = this.projectLabels;
 
     runInAction(() => {
-      this.rootStore.project.labels = {
-        ...this.rootStore.project.labels,
-        [projectId]: (this.rootStore.project.labels?.[projectId] || [])?.filter((label) => label.id !== labelId),
+      this.labels = {
+        ...this.labels,
+        [projectId]: (this.labels?.[projectId] || [])?.filter((label) => label.id !== labelId),
       };
     });
 
@@ -130,8 +253,8 @@ export class ProjectLabelStore implements IProjectLabelStore {
       console.log("Failed to delete label from project store");
       // reverting back to original label list
       runInAction(() => {
-        this.rootStore.project.labels = {
-          ...this.rootStore.project.labels,
+        this.labels = {
+          ...this.labels,
           [projectId]: originalLabelList || [],
         };
       });
diff --git a/web/store/project/project.store.ts b/web/store/project/project.store.ts
index 9997de5c1..d7979f3f5 100644
--- a/web/store/project/project.store.ts
+++ b/web/store/project/project.store.ts
@@ -1,7 +1,7 @@
 import { observable, action, computed, makeObservable, runInAction } from "mobx";
 // types
 import { RootStore } from "../root";
-import { IProject, IIssueLabels, IEstimate } from "types";
+import { IProject, IEstimate } from "types";
 // services
 import { ProjectService, ProjectStateService, ProjectEstimateService } from "services/project";
 import { IssueService, IssueLabelService } from "services/issue";
@@ -16,9 +16,6 @@ export interface IProjectStore {
   project_details: {
     [projectId: string]: IProject; // projectId: project Info
   };
-  labels: {
-    [projectId: string]: IIssueLabels[] | null; // project_id: labels
-  } | null;
   estimates: {
     [projectId: string]: IEstimate[] | null; // project_id: members
   } | null;
@@ -26,12 +23,9 @@ export interface IProjectStore {
   // computed
   searchedProjects: IProject[];
   workspaceProjects: IProject[] | null;
-  projectLabels: IIssueLabels[] | null;
   projectEstimates: IEstimate[] | null;
-
   joinedProjects: IProject[];
   favoriteProjects: IProject[];
-
   currentProjectDetails: IProject | undefined;
 
   // actions
@@ -39,12 +33,10 @@ export interface IProjectStore {
   setSearchQuery: (query: string) => void;
 
   getProjectById: (workspaceSlug: string, projectId: string) => IProject | null;
-  getProjectLabelById: (labelId: string) => IIssueLabels | null;
-  getProjectEstimateById: (estimateId: string) => IEstimate | null;
 
+  getProjectEstimateById: (estimateId: string) => IEstimate | null;
   fetchProjects: (workspaceSlug: string) => Promise<void>;
   fetchProjectDetails: (workspaceSlug: string, projectId: string) => Promise<any>;
-  fetchProjectLabels: (workspaceSlug: string, projectId: string) => Promise<void>;
   fetchProjectEstimates: (workspaceSlug: string, projectId: string) => Promise<any>;
 
   addProjectToFavorites: (workspaceSlug: string, projectId: string) => Promise<any>;
@@ -70,9 +62,6 @@ export class ProjectStore implements IProjectStore {
   project_details: {
     [projectId: string]: IProject; // projectId: project
   } = {};
-  labels: {
-    [projectId: string]: IIssueLabels[]; // projectId: labels
-  } | null = {};
   estimates: {
     [projectId: string]: IEstimate[]; // projectId: estimates
   } | null = {};
@@ -96,13 +85,13 @@ export class ProjectStore implements IProjectStore {
       projectId: observable.ref,
       projects: observable.ref,
       project_details: observable.ref,
-      labels: observable.ref,
+
       estimates: observable.ref,
 
       // computed
       searchedProjects: computed,
       workspaceProjects: computed,
-      projectLabels: computed,
+
       projectEstimates: computed,
 
       currentProjectDetails: computed,
@@ -117,10 +106,8 @@ export class ProjectStore implements IProjectStore {
       fetchProjectDetails: action,
 
       getProjectById: action,
-      getProjectLabelById: action,
       getProjectEstimateById: action,
 
-      fetchProjectLabels: action,
       fetchProjectEstimates: action,
 
       addProjectToFavorites: action,
@@ -177,11 +164,6 @@ export class ProjectStore implements IProjectStore {
     return this.projects?.[this.rootStore.workspace.workspaceSlug]?.filter((p) => p.is_favorite);
   }
 
-  get projectLabels() {
-    if (!this.projectId) return null;
-    return this.labels?.[this.projectId] || null;
-  }
-
   get projectEstimates() {
     if (!this.projectId) return null;
     return this.estimates?.[this.projectId] || null;
@@ -241,14 +223,6 @@ export class ProjectStore implements IProjectStore {
     return projectInfo;
   };
 
-  getProjectLabelById = (labelId: string) => {
-    if (!this.projectId) return null;
-    const labels = this.projectLabels;
-    if (!labels) return null;
-    const labelInfo: IIssueLabels | null = labels.find((label) => label.id === labelId) || null;
-    return labelInfo;
-  };
-
   getProjectEstimateById = (estimateId: string) => {
     if (!this.projectId) return null;
     const estimates = this.projectEstimates;
@@ -257,28 +231,6 @@ export class ProjectStore implements IProjectStore {
     return estimateInfo;
   };
 
-  fetchProjectLabels = async (workspaceSlug: string, projectId: string) => {
-    try {
-      this.loader = true;
-      this.error = null;
-
-      const labelResponse = await this.issueLabelService.getProjectIssueLabels(workspaceSlug, projectId);
-
-      runInAction(() => {
-        this.labels = {
-          ...this.labels,
-          [projectId]: labelResponse,
-        };
-        this.loader = false;
-        this.error = null;
-      });
-    } catch (error) {
-      console.error(error);
-      this.loader = false;
-      this.error = error;
-    }
-  };
-
   fetchProjectEstimates = async (workspaceSlug: string, projectId: string) => {
     try {
       this.loader = true;
diff --git a/web/store/workspace/workspace.store.ts b/web/store/workspace/workspace.store.ts
index 1092ec33b..5fa071cd3 100644
--- a/web/store/workspace/workspace.store.ts
+++ b/web/store/workspace/workspace.store.ts
@@ -1,7 +1,7 @@
 import { action, computed, observable, makeObservable, runInAction } from "mobx";
 import { RootStore } from "../root";
 // types
-import { IIssueLabels, IProject, IWorkspace, IWorkspaceMember } from "types";
+import { IIssueLabel, IProject, IWorkspace, IWorkspaceMember } from "types";
 // services
 import { WorkspaceService } from "services/workspace.service";
 import { ProjectService } from "services/project";
@@ -15,12 +15,12 @@ export interface IWorkspaceStore {
   // observables
   workspaceSlug: string | null;
   workspaces: IWorkspace[] | undefined;
-  labels: { [workspaceSlug: string]: IIssueLabels[] }; // workspaceSlug: labels[]
+  labels: { [workspaceSlug: string]: IIssueLabel[] }; // workspaceSlug: labels[]
 
   // actions
   setWorkspaceSlug: (workspaceSlug: string) => void;
   getWorkspaceBySlug: (workspaceSlug: string) => IWorkspace | null;
-  getWorkspaceLabelById: (workspaceSlug: string, labelId: string) => IIssueLabels | null;
+  getWorkspaceLabelById: (workspaceSlug: string, labelId: string) => IIssueLabel | null;
   fetchWorkspaces: () => Promise<IWorkspace[]>;
   fetchWorkspaceLabels: (workspaceSlug: string) => Promise<void>;
 
@@ -32,7 +32,7 @@ export interface IWorkspaceStore {
   // computed
   currentWorkspace: IWorkspace | null;
   workspacesCreateByCurrentUser: IWorkspace[] | null;
-  workspaceLabels: IIssueLabels[] | null;
+  workspaceLabels: IIssueLabel[] | null;
 }
 
 export class WorkspaceStore implements IWorkspaceStore {
@@ -44,7 +44,7 @@ export class WorkspaceStore implements IWorkspaceStore {
   workspaceSlug: string | null = null;
   workspaces: IWorkspace[] | undefined = [];
   projects: { [workspaceSlug: string]: IProject[] } = {}; // workspaceSlug: project[]
-  labels: { [workspaceSlug: string]: IIssueLabels[] } = {};
+  labels: { [workspaceSlug: string]: IIssueLabel[] } = {};
   members: { [workspaceSlug: string]: IWorkspaceMember[] } = {};
 
   // services
diff --git a/web/types/issues.d.ts b/web/types/issues.d.ts
index 553a12ced..b04a7e5ef 100644
--- a/web/types/issues.d.ts
+++ b/web/types/issues.d.ts
@@ -159,7 +159,7 @@ export type IssuePriorities = {
   user: string;
 };
 
-export interface IIssueLabels {
+export interface IIssueLabel {
   id: string;
   created_at: Date;
   updated_at: Date;
@@ -173,6 +173,11 @@ export interface IIssueLabels {
   workspace: string;
   workspace_detail: IWorkspaceLite;
   parent: string | null;
+  sort_order: number;
+}
+
+export interface IIssueLabelTree extends IIssueLabel {
+  children: IIssueLabel[] | undefined;
 }
 
 export interface IIssueActivity {
diff --git a/web/types/pages.d.ts b/web/types/pages.d.ts
index f7850d11d..f4cd52ffe 100644
--- a/web/types/pages.d.ts
+++ b/web/types/pages.d.ts
@@ -1,5 +1,5 @@
 // types
-import { IIssue, IIssueLabels, IWorkspaceLite, IProjectLite } from "types";
+import { IIssue, IIssueLabel, IWorkspaceLite, IProjectLite } from "types";
 
 export interface IPage {
   access: number;
@@ -12,7 +12,7 @@ export interface IPage {
   description_stripped: string | null;
   id: string;
   is_favorite: boolean;
-  label_details: IIssueLabels[];
+  label_details: IIssueLabel[];
   labels: string[];
   name: string;
   owned_by: string;