diff --git a/packages/ts/file-router/src/runtime/RouterConfigurationBuilder.ts b/packages/ts/file-router/src/runtime/RouterConfigurationBuilder.ts
index a2f4f86c96..87e9dafbc8 100644
--- a/packages/ts/file-router/src/runtime/RouterConfigurationBuilder.ts
+++ b/packages/ts/file-router/src/runtime/RouterConfigurationBuilder.ts
@@ -66,7 +66,7 @@ export class RouterConfigurationBuilder {
   withFileRoutes(routes: readonly AgnosticRoute[]): this {
     return this.update(routes, (original, added, children) => {
       if (added) {
-        const { module, path } = added;
+        const { module, path, flowLayout } = added;
         if (!isReactRouteModule(module)) {
           throw new Error(`The module for the "${path}" section doesn't have the React component exported by default`);
         }
@@ -75,6 +75,7 @@ export class RouterConfigurationBuilder {
         const handle = {
           ...module?.config,
           title: module?.config?.title ?? convertComponentNameToTitle(module?.default),
+          flowLayout: module?.config?.flowLayout ?? flowLayout,
         };
 
         if (path === '' && !children) {
@@ -118,7 +119,8 @@ export class RouterConfigurationBuilder {
     ];
 
     this.update(fallbackRoutes, (original, added, children) => {
-      if (original) {
+      // eslint-disable-next-line @typescript-eslint/no-unsafe-member-access
+      if (original && !original.handle?.ignoreFallback) {
         if (!children) {
           return original;
         }
@@ -157,6 +159,9 @@ export class RouterConfigurationBuilder {
         {
           element: createElement(layoutComponent),
           children: nestedRoutes,
+          handle: {
+            ignoreFallback: true,
+          },
         },
       ];
     }
@@ -164,6 +169,7 @@ export class RouterConfigurationBuilder {
     function checkFlowLayout(route: RouteObject): boolean {
       // eslint-disable-next-line @typescript-eslint/no-unsafe-member-access
       let flowLayout = typeof route.handle === 'object' && 'flowLayout' in route.handle && route.handle.flowLayout;
+      // Check children if they have layout. If yes then parent should have layout also.
       if (!flowLayout && route.children) {
         flowLayout = route.children.filter((child) => checkFlowLayout(child)).length > 0;
       }
diff --git a/packages/ts/file-router/src/runtime/createRoute.ts b/packages/ts/file-router/src/runtime/createRoute.ts
index d2d5ebf096..7dadff17df 100644
--- a/packages/ts/file-router/src/runtime/createRoute.ts
+++ b/packages/ts/file-router/src/runtime/createRoute.ts
@@ -9,10 +9,22 @@ import type { AgnosticRoute, Module } from '../types.js';
  *
  * @returns A framework-agnostic route object.
  */
-export function createRoute(path: string, children?: readonly AgnosticRoute[]): AgnosticRoute;
-export function createRoute(path: string, module: Module, children?: readonly AgnosticRoute[]): AgnosticRoute;
+export function createRoute(path: string, flowLayout: boolean, children?: readonly AgnosticRoute[]): AgnosticRoute;
 export function createRoute(
   path: string,
+  flowLayout: boolean,
+  module: Module,
+  children?: readonly AgnosticRoute[],
+): AgnosticRoute;
+export function createRoute(
+  path: string,
+  flowLayout: boolean,
+  module: Module,
+  children?: readonly AgnosticRoute[],
+): AgnosticRoute;
+export function createRoute(
+  path: string,
+  flowLayout: boolean,
   moduleOrChildren?: Module | readonly AgnosticRoute[],
   children?: readonly AgnosticRoute[],
 ): AgnosticRoute {
@@ -28,5 +40,6 @@ export function createRoute(
     path,
     module,
     children,
+    flowLayout,
   };
 }
diff --git a/packages/ts/file-router/src/types.d.ts b/packages/ts/file-router/src/types.d.ts
index deff5b0436..8ecdf36de4 100644
--- a/packages/ts/file-router/src/types.d.ts
+++ b/packages/ts/file-router/src/types.d.ts
@@ -77,6 +77,7 @@ export type AgnosticRoute = Readonly<{
   path: string;
   module?: Module;
   children?: readonly AgnosticRoute[];
+  flowLayout?: boolean;
 }>;
 
 /**
diff --git a/packages/ts/file-router/src/vite-plugin.ts b/packages/ts/file-router/src/vite-plugin.ts
index 0f2ab98762..5f9b36e50b 100644
--- a/packages/ts/file-router/src/vite-plugin.ts
+++ b/packages/ts/file-router/src/vite-plugin.ts
@@ -81,6 +81,7 @@ export default function vitePluginFileSystemRouter({
       runtimeUrls = {
         json: new URL('file-routes.json', isDevMode ? _generatedDir : _outDir),
         code: new URL('file-routes.ts', _generatedDir),
+        layouts: new URL('layouts.json', _generatedDir),
       };
     },
     async buildStart() {
diff --git a/packages/ts/file-router/src/vite-plugin/collectRoutesFromFS.ts b/packages/ts/file-router/src/vite-plugin/collectRoutesFromFS.ts
index a1e0d9bbae..ff39528ae8 100644
--- a/packages/ts/file-router/src/vite-plugin/collectRoutesFromFS.ts
+++ b/packages/ts/file-router/src/vite-plugin/collectRoutesFromFS.ts
@@ -9,6 +9,7 @@ export type RouteMeta = Readonly<{
   path: string;
   file?: URL;
   layout?: URL;
+  flowLayout?: boolean;
   children?: readonly RouteMeta[];
 }>;
 
diff --git a/packages/ts/file-router/src/vite-plugin/createRoutesFromMeta.ts b/packages/ts/file-router/src/vite-plugin/createRoutesFromMeta.ts
index 3d3ef44c1c..c45f2473b9 100644
--- a/packages/ts/file-router/src/vite-plugin/createRoutesFromMeta.ts
+++ b/packages/ts/file-router/src/vite-plugin/createRoutesFromMeta.ts
@@ -50,9 +50,15 @@ function createImport(mod: string, file: string): ImportDeclaration {
  * @param mod - The name of the route module imported as a namespace.
  * @param children - The list of child route call expressions.
  */
-function createRouteData(path: string, mod: string | undefined, children?: readonly CallExpression[]): CallExpression {
+function createRouteData(
+  path: string,
+  flowLayout: boolean | undefined,
+  mod: string | undefined,
+  children?: readonly CallExpression[],
+): CallExpression {
+  const serverLayout = flowLayout ?? false;
   return template(
-    `const route = createRoute("${path}"${mod ? `, ${mod}` : ''}${children ? `, CHILDREN` : ''})`,
+    `const route = createRoute("${path}",${serverLayout}${mod ? `, ${mod}` : ''}${children ? `, CHILDREN` : ''})`,
     ([statement]) => (statement as VariableStatement).declarationList.declarations[0].initializer as CallExpression,
     [
       transformer((node) =>
@@ -84,7 +90,7 @@ export default function createRoutesFromMeta(views: readonly RouteMeta[], { code
         .map((dup) => `console.error("Two views share the same path: ${dup}");`),
     );
 
-    return metas.map(({ file, layout, path, children }) => {
+    return metas.map(({ file, layout, path, children, flowLayout }) => {
       let _children: readonly CallExpression[] | undefined;
 
       if (children) {
@@ -103,7 +109,7 @@ export default function createRoutesFromMeta(views: readonly RouteMeta[], { code
         imports.push(createImport(mod, relativize(layout, codeDir)));
       }
 
-      return createRouteData(convertFSRouteSegmentToURLPatternFormat(path), mod, _children);
+      return createRouteData(convertFSRouteSegmentToURLPatternFormat(path), flowLayout, mod, _children);
     });
   });
 
diff --git a/packages/ts/file-router/src/vite-plugin/createViewConfigJson.ts b/packages/ts/file-router/src/vite-plugin/createViewConfigJson.ts
index 3d2d281e2d..eab23f6638 100644
--- a/packages/ts/file-router/src/vite-plugin/createViewConfigJson.ts
+++ b/packages/ts/file-router/src/vite-plugin/createViewConfigJson.ts
@@ -32,7 +32,7 @@ export default async function createViewConfigJson(views: readonly RouteMeta[]):
     views,
     async (routes, next) =>
       await Promise.all(
-        routes.map(async ({ path, file, layout, children }) => {
+        routes.map(async ({ path, file, layout, children, flowLayout }) => {
           const newChildren = children ? await next(...children) : undefined;
 
           if (!file && !layout) {
@@ -59,6 +59,12 @@ export default async function createViewConfigJson(views: readonly RouteMeta[]):
                 const code = node.initializer.getText(sourceFile);
                 const script = new Script(`(${code})`);
                 config = script.runInThisContext() as ViewConfig;
+                if (config.flowLayout === undefined) {
+                  const copy = JSON.parse(JSON.stringify(config));
+                  // eslint-disable-next-line @typescript-eslint/no-unsafe-member-access
+                  copy.flowLayout = flowLayout ?? false;
+                  config = copy;
+                }
               }
             } else if (node.getText(sourceFile).startsWith('export default')) {
               waitingForIdentifier = true;
diff --git a/packages/ts/file-router/src/vite-plugin/generateRuntimeFiles.ts b/packages/ts/file-router/src/vite-plugin/generateRuntimeFiles.ts
index 57e52bda07..593af7e123 100644
--- a/packages/ts/file-router/src/vite-plugin/generateRuntimeFiles.ts
+++ b/packages/ts/file-router/src/vite-plugin/generateRuntimeFiles.ts
@@ -1,7 +1,7 @@
 import { existsSync } from 'node:fs';
 import { mkdir, readFile, writeFile } from 'node:fs/promises';
 import type { Logger } from 'vite';
-import collectRoutesFromFS from './collectRoutesFromFS.js';
+import collectRoutesFromFS, { type RouteMeta } from './collectRoutesFromFS.js';
 import createRoutesFromMeta from './createRoutesFromMeta.js';
 import createViewConfigJson from './createViewConfigJson.js';
 
@@ -18,6 +18,10 @@ export type RuntimeFileUrls = Readonly<{
    * The URL of the module with the routes tree in a framework-agnostic format.
    */
   code: URL;
+  /**
+   * The URL of the JSON file containing server layout path information.
+   */
+  layouts: URL;
 }>;
 
 /**
@@ -43,6 +47,44 @@ async function generateRuntimeFile(url: URL, data: string): Promise<void> {
   }
 }
 
+async function applyLayouts(routeMeta: readonly RouteMeta[], layouts: URL): Promise<readonly RouteMeta[]> {
+  if (!existsSync(layouts)) {
+    return routeMeta;
+  }
+  const layoutContents = await readFile(layouts, 'utf-8');
+  const availableLayouts: any[] = JSON.parse(layoutContents);
+  function layoutExists(routePath: string) {
+    return (
+      availableLayouts.filter((layout: any) => {
+        // eslint-disable-next-line @typescript-eslint/no-unsafe-member-access,@typescript-eslint/no-unsafe-call
+        const normalizedLayout = layout.path[0] === '/' ? layout.path.substring(1) : layout.path;
+        const normalizedRoute = routePath.startsWith('/') ? routePath.substring(1) : routePath;
+        return normalizedRoute.startsWith(normalizedLayout);
+      }).length > 0
+    );
+  }
+  function enableFlowLayout(route: RouteMeta) {
+    // eslint-disable-next-line @typescript-eslint/ban-ts-comment
+    // @ts-expect-error
+    route.flowLayout = true;
+    if (route.children) {
+      // eslint-disable-next-line @typescript-eslint/no-for-in-array,no-restricted-syntax
+      for (const position in route.children) {
+        enableFlowLayout(route.children[position]);
+      }
+    }
+  }
+
+  routeMeta
+    .filter((route) => route.layout === undefined && layoutExists(route.path))
+    .map((route) => {
+      enableFlowLayout(route);
+      return route;
+    });
+
+  return routeMeta;
+}
+
 /**
  * Collects all file-based routes from the given directory, and based on them generates two files
  * described by {@link RuntimeFileUrls} type.
@@ -59,10 +101,11 @@ export async function generateRuntimeFiles(
   logger: Logger,
   debug: boolean,
 ): Promise<void> {
-  const routeMeta = existsSync(viewsDir) ? await collectRoutesFromFS(viewsDir, { extensions, logger }) : [];
+  let routeMeta = existsSync(viewsDir) ? await collectRoutesFromFS(viewsDir, { extensions, logger }) : [];
   if (debug) {
     logger.info('Collected file-based routes');
   }
+  routeMeta = await applyLayouts(routeMeta, urls.layouts);
   const runtimeRoutesCode = createRoutesFromMeta(routeMeta, urls);
   const viewConfigJson = await createViewConfigJson(routeMeta);
 
diff --git a/packages/ts/file-router/test/vite-plugin/createRoutesFromMeta.spec.ts b/packages/ts/file-router/test/vite-plugin/createRoutesFromMeta.spec.ts
index 4aaa19cd95..d092998d96 100644
--- a/packages/ts/file-router/test/vite-plugin/createRoutesFromMeta.spec.ts
+++ b/packages/ts/file-router/test/vite-plugin/createRoutesFromMeta.spec.ts
@@ -19,6 +19,7 @@ describe('@vaadin/hilla-file-router', () => {
       runtimeUrls = {
         json: new URL('server/file-routes.json', dir),
         code: new URL('generated/file-routes.ts', dir),
+        layouts: new URL('generated/layouts.json', dir),
       };
     });
 
@@ -41,30 +42,30 @@ import * as Page12 from "../views/test/issue-002378/{requiredParam}/edit.js";
 import * as Layout15 from "../views/test/issue-002571-empty-layout/@layout.js";
 import * as Page16 from "../views/test/issue-002879-config-below.js";
 const routes: readonly AgnosticRoute[] = [
-    createRoute("nameToReplace", Page0),
-    createRoute("profile", [
-        createRoute("", Page1),
-        createRoute("account", Layout5, [
-            createRoute("security", [
-                createRoute("password", Page2),
-                createRoute("two-factor-auth", Page3)
+    createRoute("nameToReplace", false, Page0),
+    createRoute("profile", false, [
+        createRoute("", false, Page1),
+        createRoute("account", false, Layout5, [
+            createRoute("security", false, [
+                createRoute("password", false, Page2),
+                createRoute("two-factor-auth", false, Page3)
             ])
         ]),
-        createRoute("friends", Layout8, [
-            createRoute("list", Page6),
-            createRoute(":user", Page7)
+        createRoute("friends", false, Layout8, [
+            createRoute("list", false, Page6),
+            createRoute(":user", false, Page7)
         ])
     ]),
-    createRoute("test", [
-        createRoute(":optional?", Page10),
-        createRoute("*", Page11),
-        createRoute("issue-002378", [
-            createRoute(":requiredParam", [
-                createRoute("edit", Page12)
+    createRoute("test", false, [
+        createRoute(":optional?", false, Page10),
+        createRoute("*", false, Page11),
+        createRoute("issue-002378", false, [
+            createRoute(":requiredParam", false, [
+                createRoute("edit", false, Page12)
             ])
         ]),
-        createRoute("issue-002571-empty-layout", Layout15, []),
-        createRoute("issue-002879-config-below", Page16)
+        createRoute("issue-002571-empty-layout", false, Layout15, []),
+        createRoute("issue-002879-config-below", false, Page16)
     ])
 ];
 export default routes;
diff --git a/packages/ts/file-router/test/vite-plugin/generateRuntimeFiles.spec.ts b/packages/ts/file-router/test/vite-plugin/generateRuntimeFiles.spec.ts
index aae4ea139e..14a9408182 100644
--- a/packages/ts/file-router/test/vite-plugin/generateRuntimeFiles.spec.ts
+++ b/packages/ts/file-router/test/vite-plugin/generateRuntimeFiles.spec.ts
@@ -22,6 +22,7 @@ describe('@vaadin/hilla-file-router', () => {
       runtimeUrls = {
         json: new URL('server/file-routes.json', tmp),
         code: new URL('generated/file-routes.ts', tmp),
+        layouts: new URL('generated/layouts.json', tmp),
       };
 
       await createTestingRouteFiles(viewsDir);