diff --git a/shell/utils/dynamic-content/__tests__/notification-handler.test.ts b/shell/utils/dynamic-content/__tests__/notification-handler.test.ts
new file mode 100644
index 00000000000..c91dc70c784
--- /dev/null
+++ b/shell/utils/dynamic-content/__tests__/notification-handler.test.ts
@@ -0,0 +1,173 @@
+import { createHandler, DynamicContentAnnouncementHandlerName } from '../notification-handler';
+import { ANNOUNCEMENT_PREFIX } from '../announcement';
+import { READ_ANNOUNCEMENTS } from '@shell/store/prefs';
+import { NotificationLevel, Notification } from '@shell/types/notifications';
+
+function makeNotification(id: string): Notification {
+  return {
+    id,
+    level:   NotificationLevel.Announcement,
+    title:   'Test notification',
+    message: 'Test message',
+  };
+}
+
+function makeStore({
+  all = [],
+  pref = '',
+}: {
+  all?: any[];
+  pref?: string;
+}) {
+  const dispatch = jest.fn().mockResolvedValue(undefined);
+  const store = {
+    getters: {
+      'notifications/all': all,
+      'prefs/get':         jest.fn().mockReturnValue(pref),
+    },
+    dispatch,
+  };
+
+  return { store, dispatch };
+}
+
+describe('createHandler', () => {
+  it('returns a handler object with an onReadUpdated method', () => {
+    const { store } = makeStore({});
+    const handler = createHandler(store);
+
+    expect(typeof handler.onReadUpdated).toStrictEqual('function');
+  });
+});
+
+describe('DynamicContentAnnouncementHandlerName', () => {
+  it('exports the handler name constant', () => {
+    expect(DynamicContentAnnouncementHandlerName).toStrictEqual('dc-announcements');
+  });
+});
+
+describe('onReadUpdated', () => {
+  it('does not dispatch when notification id does not start with announcement prefix', async() => {
+    const { store, dispatch } = makeStore({});
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification('some-other-notification'), true);
+
+    expect(dispatch).not.toHaveBeenCalled();
+  });
+
+  it('does not dispatch when notification id is an unrelated prefix', async() => {
+    const { store, dispatch } = makeStore({});
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification('ann-123'), true);
+
+    expect(dispatch).not.toHaveBeenCalled();
+  });
+
+  it('dispatches prefs/set when notification id starts with announcement prefix', async() => {
+    const { store, dispatch } = makeStore({ pref: '' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }abc`), true);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'abc' });
+  });
+
+  it('adds stripped id to pref when marking as read and pref is empty', async() => {
+    const { store, dispatch } = makeStore({ pref: '' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }my-announcement`), true);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'my-announcement' });
+  });
+
+  it('adds stripped id to pref when marking as read with existing pref entries', async() => {
+    const { store, dispatch } = makeStore({ pref: 'existing-one' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }new-one`), true);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'existing-one,new-one' });
+  });
+
+  it('removes stripped id from pref when marking as unread', async() => {
+    const { store, dispatch } = makeStore({ pref: 'abc,xyz' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }abc`), false);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'xyz' });
+  });
+
+  it('dispatches empty string when removing the only id from pref', async() => {
+    const { store, dispatch } = makeStore({ pref: 'abc' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }abc`), false);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: '' });
+  });
+
+  it('does not add duplicate id when re-marking already-read notification as read', async() => {
+    const { store, dispatch } = makeStore({ pref: 'abc' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }abc`), true);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'abc' });
+  });
+
+  it('sorts the resulting ids alphabetically before dispatching', async() => {
+    const { store, dispatch } = makeStore({ pref: 'zzz,aaa' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }mmm`), true);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'aaa,mmm,zzz' });
+  });
+
+  it('does not change the pref when marking an absent id as unread', async() => {
+    const { store, dispatch } = makeStore({ pref: 'abc' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }not-in-list`), false);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'abc' });
+  });
+
+  it('uses store getter READ_ANNOUNCEMENTS to retrieve the current pref', async() => {
+    const { store } = makeStore({ pref: 'some-value' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }xyz`), true);
+
+    expect(store.getters['prefs/get']).toHaveBeenCalledWith(READ_ANNOUNCEMENTS);
+  });
+
+  it('treats a null pref the same as an empty string', async() => {
+    const dispatch = jest.fn().mockResolvedValue(undefined);
+    const store = {
+      getters: {
+        'notifications/all': [],
+        'prefs/get':         jest.fn().mockReturnValue(null),
+      },
+      dispatch,
+    };
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }abc`), true);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'abc' });
+  });
+
+  it('stores only the id portion after stripping the prefix for a multi-part id', async() => {
+    const { store, dispatch } = makeStore({ pref: '' });
+    const handler = createHandler(store);
+
+    await handler.onReadUpdated(makeNotification(`${ ANNOUNCEMENT_PREFIX }release-2.8.0-important`), true);
+
+    expect(dispatch).toHaveBeenCalledWith('prefs/set', { key: READ_ANNOUNCEMENTS, value: 'release-2.8.0-important' });
+  });
+});