diff --git a/clients/vscode/src/StatusBarItem.ts b/clients/vscode/src/StatusBarItem.ts
index 8f1a1aded7ad..909aee65ac18 100644
--- a/clients/vscode/src/StatusBarItem.ts
+++ b/clients/vscode/src/StatusBarItem.ts
@@ -2,6 +2,8 @@ import { commands, window, ExtensionContext, StatusBarAlignment, ThemeColor } fr
 import { State as LanguageClientState } from "vscode-languageclient";
 import { Client } from "./lsp/client";
 import { Config } from "./Config";
+import { StatusInfo } from "tabby-agent";
+import { getLogger } from "./logger";
 
 const label = "Tabby";
 const iconAutomatic = "$(check)";
@@ -11,6 +13,7 @@ const iconLoading = "$(loading~spin)";
 const iconDisconnected = "$(debug-disconnect)";
 const iconUnauthorized = "$(key)";
 const iconWarning = "$(warning)";
+const iconCodeModelNotFound = "$(close)";
 const colorNormal = new ThemeColor("statusBar.foreground");
 const colorWarning = new ThemeColor("statusBarItem.warningForeground");
 const backgroundColorNormal = new ThemeColor("statusBar.background");
@@ -72,7 +75,11 @@ export class StatusBarItem {
           }
           case "ready":
           case "readyForAutoTrigger": {
-            if (this.checkIfVSCodeInlineCompletionEnabled()) {
+            // TODO(Sma1lboy): implement this status in tabby-agent in the future when need to generalize to other IDEs
+            if (!this.checkIfVSCodeInlineCompletionAvailable(statusInfo)) {
+              return;
+            }
+            if (statusInfo.status === "readyForAutoTrigger" && this.checkIfVSCodeInlineCompletionEnabled()) {
               this.setColorNormal();
               this.setIcon(iconAutomatic);
               this.setTooltip(statusInfo.tooltip);
@@ -80,7 +87,10 @@ export class StatusBarItem {
             break;
           }
           case "readyForManualTrigger": {
-            if (this.checkIfVSCodeInlineCompletionEnabled()) {
+            if (!this.checkIfVSCodeInlineCompletionAvailable(statusInfo)) {
+              return;
+            }
+            if (statusInfo.status === "readyForManualTrigger" && this.checkIfVSCodeInlineCompletionEnabled()) {
               this.setColorNormal();
               this.setIcon(iconManual);
               this.setTooltip(statusInfo.tooltip);
@@ -106,6 +116,20 @@ export class StatusBarItem {
     }
   }
 
+  /**
+   * Check Availability of Inline Completion from remote server
+   */
+  private checkIfVSCodeInlineCompletionAvailable(status: StatusInfo) {
+    const codeModel = status.serverHealth?.["model"];
+    if (!codeModel) {
+      this.setColorNormal();
+      this.setIcon(iconCodeModelNotFound);
+      this.setTooltip("Tabby: Code Completion Model Unavailable");
+      return false;
+    }
+    return true;
+  }
+
   private checkIfVSCodeInlineCompletionEnabled() {
     if (this.config.vscodeInlineSuggestEnabled) {
       return true;