diff --git a/src/components/ha-icon-picker.ts b/src/components/ha-icon-picker.ts
index 77ceb6aba1..1d4f9f8180 100644
--- a/src/components/ha-icon-picker.ts
+++ b/src/components/ha-icon-picker.ts
@@ -67,11 +67,14 @@ const loadCustomIconItems = async (iconsetPrefix: string) => {
   }
 };
 
-const rowRenderer: ComboBoxLitRenderer<IconItem | RankedIcon> = (item) =>
-  html`<ha-list-item graphic="avatar">
+const rowRenderer: ComboBoxLitRenderer<IconItem | RankedIcon> = (item) => html`
+  <ha-list-item graphic="avatar">
     <ha-icon .icon=${item.icon} slot="graphic"></ha-icon>
     ${item.icon}
-  </ha-list-item>`;
+  </ha-list-item>
+`;
+
+export const CUSTOM_STATE_ICON = "___CUSTOM_STATE_ICON___";
 
 @customElement("ha-icon-picker")
 export class HaIconPicker extends LitElement {
diff --git a/src/components/ha-selector/ha-selector-icon.ts b/src/components/ha-selector/ha-selector-icon.ts
index c325055911..d1bba5801b 100644
--- a/src/components/ha-selector/ha-selector-icon.ts
+++ b/src/components/ha-selector/ha-selector-icon.ts
@@ -35,7 +35,6 @@ export class HaIconSelector extends LitElement {
 
     const placeholder =
       this.selector.icon?.placeholder ||
-      stateObj?.attributes.icon ||
       (stateObj && until(entityIcon(this.hass, stateObj)));
 
     return html`
diff --git a/src/components/ha-state-icon.ts b/src/components/ha-state-icon.ts
index 41421db68f..e92c25f651 100644
--- a/src/components/ha-state-icon.ts
+++ b/src/components/ha-state-icon.ts
@@ -20,10 +20,8 @@ export class HaStateIcon extends LitElement {
   @property() public icon?: string;
 
   protected render() {
-    const overrideIcon =
-      this.icon ||
-      (this.stateObj && this.hass?.entities[this.stateObj.entity_id]?.icon) ||
-      this.stateObj?.attributes.icon;
+    const overrideIcon = this.icon;
+
     if (overrideIcon) {
       return html`<ha-icon .icon=${overrideIcon}></ha-icon>`;
     }
diff --git a/src/data/entity_registry.ts b/src/data/entity_registry.ts
index 05659e2766..35fa3ac7a1 100644
--- a/src/data/entity_registry.ts
+++ b/src/data/entity_registry.ts
@@ -12,10 +12,15 @@ import type { RegistryEntry } from "./registry";
 
 type EntityCategory = "config" | "diagnostic";
 
+export type EntityRegistryIcon = {
+  default: string;
+  state?: Record<string, string>;
+};
+
 export interface EntityRegistryDisplayEntry {
   entity_id: string;
   name?: string;
-  icon?: string;
+  icon?: EntityRegistryIcon | string;
   device_id?: string;
   area_id?: string;
   labels: string[];
@@ -47,7 +52,7 @@ export interface EntityRegistryEntry extends RegistryEntry {
   id: string;
   entity_id: string;
   name: string | null;
-  icon: string | null;
+  icon: EntityRegistryIcon | string | null;
   platform: string;
   config_entry_id: string | null;
   device_id: string | null;
@@ -128,7 +133,7 @@ export interface EntityRegistryOptions {
 
 export interface EntityRegistryEntryUpdateParams {
   name?: string | null;
-  icon?: string | null;
+  icon?: string | EntityRegistryIcon | null;
   device_class?: string | null;
   area_id?: string | null;
   disabled_by?: string | null;
diff --git a/src/data/icons.ts b/src/data/icons.ts
index 2f22a0850c..9a4a018d0c 100644
--- a/src/data/icons.ts
+++ b/src/data/icons.ts
@@ -178,17 +178,27 @@ export const getServiceIcons = async (
 export const entityIcon = async (
   hass: HomeAssistant,
   stateObj: HassEntity,
-  state?: string
-) => {
+  stateValue?: string
+): Promise<string | undefined> => {
   const entry = hass.entities?.[stateObj.entity_id] as
     | EntityRegistryDisplayEntry
     | undefined;
+
   if (entry?.icon) {
-    return entry.icon;
+    if (typeof entry.icon === "string") {
+      return entry.icon;
+    }
+    const state = stateValue ?? stateObj.state;
+    return entry.icon.state?.[state] || entry.icon.default;
   }
+
+  if (stateObj?.attributes.icon) {
+    return stateObj.attributes.icon;
+  }
+
   const domain = computeStateDomain(stateObj);
 
-  return getEntityIcon(hass, domain, stateObj, state, entry);
+  return getEntityIcon(hass, domain, stateObj, stateValue, entry);
 };
 
 export const entryIcon = async (
@@ -196,7 +206,7 @@ export const entryIcon = async (
   entry: EntityRegistryEntry | EntityRegistryDisplayEntry
 ) => {
   if (entry.icon) {
-    return entry.icon;
+    return typeof entry.icon === "string" ? entry.icon : entry.icon.default;
   }
   const stateObj = hass.states[entry.entity_id] as HassEntity | undefined;
   const domain = computeDomain(entry.entity_id);
diff --git a/src/panels/config/entities/dialogs/dialog-entity-state-icon.ts b/src/panels/config/entities/dialogs/dialog-entity-state-icon.ts
new file mode 100644
index 0000000000..5a1ebd271e
--- /dev/null
+++ b/src/panels/config/entities/dialogs/dialog-entity-state-icon.ts
@@ -0,0 +1,106 @@
+import { css, CSSResultGroup, html, LitElement, nothing } from "lit";
+import { customElement, property, state } from "lit/decorators";
+import { fireEvent } from "../../../../common/dom/fire_event";
+import "../../../../components/ha-button";
+import "../../../../components/ha-alert";
+import "../../../../components/ha-area-picker";
+import "../../../../components/ha-dialog";
+import "../../../../components/ha-labels-picker";
+import "../../../../components/ha-textfield";
+import "../../../../components/ha-yaml-editor";
+import { EntityRegistryIcon } from "../../../../data/entity_registry";
+import { entryIcon } from "../../../../data/icons";
+import { haStyle, haStyleDialog } from "../../../../resources/styles";
+import { HomeAssistant } from "../../../../types";
+import { EntityStateIconDialogParams } from "./show-dialog-entity-state-icon";
+
+@customElement("dialog-entity-state-icon")
+class DialogEntityStateIcon extends LitElement {
+  @property({ attribute: false }) public hass!: HomeAssistant;
+
+  @state() private _params?: EntityStateIconDialogParams;
+
+  @state() private _submitting = false;
+
+  @state() private _config?: EntityRegistryIcon;
+
+  public async showDialog(params: EntityStateIconDialogParams): Promise<void> {
+    this._params = params;
+
+    const icon = this._params.icon;
+
+    this._config = icon ?? {
+      default: icon || (await entryIcon(this.hass, this._params.entry)) || "",
+    };
+
+    await this.updateComplete;
+  }
+
+  public closeDialog(): void {
+    this._params = undefined;
+    fireEvent(this, "dialog-closed", { dialog: this.localName });
+  }
+
+  protected render() {
+    if (!this._params) {
+      return nothing;
+    }
+
+    return html`
+      <ha-dialog
+        open
+        @closed=${this.closeDialog}
+        .heading=${"Entity state icon"}
+      >
+        <ha-yaml-editor
+          .defaultValue=${this._config}
+          @value-changed=${this._dataChanged}
+        ></ha-yaml-editor>
+
+        <ha-button
+          slot="secondaryAction"
+          @click=${this.closeDialog}
+          .disabled=${this._submitting}
+        >
+          ${this.hass.localize("ui.common.cancel")}
+        </ha-button>
+        <ha-button
+          slot="primaryAction"
+          @click=${this._updateEntry}
+          .disabled=${this._submitting}
+        >
+          ${this.hass.localize("ui.dialogs.device-registry-detail.update")}
+        </ha-button>
+      </ha-dialog>
+    `;
+  }
+
+  private _dataChanged(ev): void {
+    this._config = ev.detail.value;
+  }
+
+  private async _updateEntry(): Promise<void> {
+    this._submitting = true;
+    try {
+      const icon =
+        Object.keys(this._config!).length === 0 ? null : this._config!;
+      this._params!.updateIcon(icon);
+      this.closeDialog();
+    } catch (err: any) {
+      // eslint-disable-next-line no-console
+      console.error(err);
+    } finally {
+      this._submitting = false;
+    }
+  }
+
+  static get styles(): CSSResultGroup {
+    return [haStyle, haStyleDialog, css``];
+  }
+}
+
+declare global {
+  interface HTMLElementTagNameMap {
+    "dialog-entity-state-icon": DialogEntityStateIcon;
+  }
+}
diff --git a/src/panels/config/entities/dialogs/show-dialog-entity-state-icon.ts b/src/panels/config/entities/dialogs/show-dialog-entity-state-icon.ts
new file mode 100644
index 0000000000..859b4e465d
--- /dev/null
+++ b/src/panels/config/entities/dialogs/show-dialog-entity-state-icon.ts
@@ -0,0 +1,25 @@
+import { fireEvent } from "../../../../common/dom/fire_event";
+import {
+  EntityRegistryEntry,
+  EntityRegistryIcon,
+} from "../../../../data/entity_registry";
+
+export interface EntityStateIconDialogParams {
+  entry: EntityRegistryEntry;
+  icon: string | EntityRegistryIcon;
+  updateIcon: (icons: EntityRegistryIcon | null) => Promise<unknown>;
+}
+
+export const loadEntityStateIconDialog = () =>
+  import("./dialog-entity-state-icon");
+
+export const showEntityStateIconDialog = (
+  element: HTMLElement,
+  params: EntityStateIconDialogParams
+): void => {
+  fireEvent(element, "show-dialog", {
+    dialogTag: "dialog-entity-state-icon",
+    dialogImport: loadEntityStateIconDialog,
+    dialogParams: params,
+  });
+};
diff --git a/src/panels/config/entities/entity-registry-settings-editor.ts b/src/panels/config/entities/entity-registry-settings-editor.ts
index 44c1e04d99..c66eb4edeb 100644
--- a/src/panels/config/entities/entity-registry-settings-editor.ts
+++ b/src/panels/config/entities/entity-registry-settings-editor.ts
@@ -1,6 +1,6 @@
 import "@material/mwc-button/mwc-button";
 import "@material/mwc-formfield/mwc-formfield";
-import { mdiContentCopy } from "@mdi/js";
+import { mdiCog, mdiContentCopy } from "@mdi/js";
 import type { HassEntity } from "home-assistant-js-websocket";
 import type { CSSResultGroup, PropertyValues } from "lit";
 import { css, html, LitElement, nothing } from "lit";
@@ -25,13 +25,13 @@ import "../../../components/ha-area-picker";
 import "../../../components/ha-icon";
 import "../../../components/ha-icon-button-next";
 import "../../../components/ha-icon-picker";
+import "../../../components/ha-labels-picker";
 import "../../../components/ha-list-item";
 import "../../../components/ha-radio";
 import "../../../components/ha-select";
 import "../../../components/ha-settings-row";
 import "../../../components/ha-state-icon";
 import "../../../components/ha-switch";
-import "../../../components/ha-labels-picker";
 import type { HaSwitch } from "../../../components/ha-switch";
 import "../../../components/ha-textfield";
 import {
@@ -56,6 +56,7 @@ import type {
   AlarmControlPanelEntityOptions,
   EntityRegistryEntry,
   EntityRegistryEntryUpdateParams,
+  EntityRegistryIcon,
   ExtEntityRegistryEntry,
   LockEntityOptions,
   SensorEntityOptions,
@@ -91,6 +92,7 @@ import { haStyle } from "../../../resources/styles";
 import type { HomeAssistant } from "../../../types";
 import { showToast } from "../../../util/toast";
 import { showDeviceRegistryDetailDialog } from "../devices/device-registry-detail/show-dialog-device-registry-detail";
+import { showEntityStateIconDialog } from "./dialogs/show-dialog-entity-state-icon";
 
 const OVERRIDE_DEVICE_CLASSES = {
   cover: [
@@ -149,7 +151,7 @@ export class EntityRegistrySettingsEditor extends LitElement {
 
   @state() private _name!: string;
 
-  @state() private _icon!: string;
+  @state() private _icon!: string | EntityRegistryIcon;
 
   @state() private _entityId!: string;
 
@@ -349,6 +351,41 @@ export class EntityRegistrySettingsEditor extends LitElement {
     }
   }
 
+  private _renderIconPicker(stateObj: HassEntity) {
+    const value = typeof this._icon === "object" ? "" : this._icon;
+    const placeholder =
+      this.entry.original_icon ||
+      (stateObj && until(entityIcon(this.hass, stateObj))) ||
+      until(entryIcon(this.hass, this.entry));
+
+    return html`
+      <div class="icon-container">
+        <ha-icon-picker
+          .hass=${this.hass}
+          .value=${value}
+          @value-changed=${this._iconChanged}
+          .label=${this.hass.localize("ui.dialogs.entity_registry.editor.icon")}
+          .placeholder=${placeholder}
+          .disabled=${this.disabled}
+        >
+          ${!this._icon && !stateObj?.attributes.icon && stateObj
+            ? html`
+                <ha-state-icon
+                  slot="fallback"
+                  .hass=${this.hass}
+                  .stateObj=${stateObj}
+                ></ha-state-icon>
+              `
+            : nothing}
+        </ha-icon-picker>
+        <ha-icon-button
+          .path=${mdiCog}
+          @click=${this._openEntityStateIcon}
+        ></ha-icon-button>
+      </div>
+    `;
+  }
+
   protected render() {
     if (this.entry.entity_id !== this._origEntityId) {
       return nothing;
@@ -380,33 +417,7 @@ export class EntityRegistrySettingsEditor extends LitElement {
             .placeholder=${this.entry.original_name}
             @input=${this._nameChanged}
           ></ha-textfield>`}
-      ${this.hideIcon
-        ? nothing
-        : html`
-            <ha-icon-picker
-              .hass=${this.hass}
-              .value=${this._icon}
-              @value-changed=${this._iconChanged}
-              .label=${this.hass.localize(
-                "ui.dialogs.entity_registry.editor.icon"
-              )}
-              .placeholder=${this.entry.original_icon ||
-              stateObj?.attributes.icon ||
-              (stateObj && until(entityIcon(this.hass, stateObj))) ||
-              until(entryIcon(this.hass, this.entry))}
-              .disabled=${this.disabled}
-            >
-              ${!this._icon && !stateObj?.attributes.icon && stateObj
-                ? html`
-                    <ha-state-icon
-                      slot="fallback"
-                      .hass=${this.hass}
-                      .stateObj=${stateObj}
-                    ></ha-state-icon>
-                  `
-                : nothing}
-            </ha-icon-picker>
-          `}
+      ${this.hideIcon ? nothing : this._renderIconPicker(stateObj)}
       ${domain === "switch"
         ? html`<ha-select
             .label=${this.hass.localize(
@@ -1025,7 +1036,8 @@ export class EntityRegistrySettingsEditor extends LitElement {
 
     const params: Partial<EntityRegistryEntryUpdateParams> = {
       name: this._name.trim() || null,
-      icon: this._icon.trim() || null,
+      icon:
+        typeof this._icon === "string" ? this._icon.trim() : this._icon || null,
       area_id: this._areaId || null,
       labels: this._labels || [],
       new_entity_id: this._entityId.trim(),
@@ -1455,6 +1467,17 @@ export class EntityRegistrySettingsEditor extends LitElement {
     });
   }
 
+  private _openEntityStateIcon() {
+    showEntityStateIconDialog(this, {
+      entry: this.entry!,
+      icon: this._icon,
+      updateIcon: async (icon) => {
+        this._icon = icon || "";
+        fireEvent(this, "change");
+      },
+    });
+  }
+
   private _handleVoiceAssistantsClicked() {
     showVoiceAssistantsView(
       this,
@@ -1549,6 +1572,18 @@ export class EntityRegistrySettingsEditor extends LitElement {
           overflow: hidden;
           --mdc-list-side-padding: 13px;
         }
+        .icon-container {
+          display: flex;
+          flex-direction: row;
+          align-items: center;
+          gap: 8px;
+        }
+        .icon-container ha-button-icon {
+          flex: none;
+        }
+        .icon-container ha-icon-picker {
+          flex: 1;
+        }
       `,
     ];
   }