diff --git a/src/server/shutdown.test.ts b/src/server/shutdown.test.ts
new file mode 100644
index 00000000..7d4fe843
--- /dev/null
+++ b/src/server/shutdown.test.ts
@@ -0,0 +1,171 @@
+import { describe, it, expect, vi, beforeEach, afterEach } from "vitest";
+import { registerGracefulShutdown } from "./shutdown.js";
+import type { Logger } from "@/observability/logger/types.js";
+
+function createMockLogger(): Logger & { flush: ReturnType<typeof vi.fn> } {
+  const logger = {
+    debug: vi.fn(),
+    info: vi.fn(),
+    warn: vi.fn(),
+    error: vi.fn(),
+    child: vi.fn(),
+    flush: vi.fn().mockResolvedValue(undefined),
+  };
+  logger.child.mockReturnValue(logger);
+  return logger as Logger & { flush: ReturnType<typeof vi.fn> };
+}
+
+function createMockServer() {
+  return {
+    close: vi.fn((cb: () => void) => cb()),
+  };
+}
+
+describe("registerGracefulShutdown", () => {
+  let processOnSpy: ReturnType<typeof vi.spyOn>;
+  let processExitSpy: ReturnType<typeof vi.spyOn>;
+
+  beforeEach(() => {
+    processOnSpy = vi.spyOn(process, "on");
+    processExitSpy = vi
+      .spyOn(process, "exit")
+      .mockImplementation(() => undefined as never);
+    vi.useFakeTimers();
+  });
+
+  afterEach(() => {
+    processOnSpy.mockRestore();
+    processExitSpy.mockRestore();
+    vi.useRealTimers();
+  });
+
+  it("registers a SIGTERM handler", () => {
+    const logger = createMockLogger();
+    const server = createMockServer();
+
+    registerGracefulShutdown({ logger, server });
+
+    expect(processOnSpy).toHaveBeenCalledWith("SIGTERM", expect.any(Function));
+  });
+
+  it("calls server.close on SIGTERM", async () => {
+    const logger = createMockLogger();
+    const server = createMockServer();
+
+    registerGracefulShutdown({ logger, server });
+
+    // Extract and call the SIGTERM handler
+    const sigtermCall = processOnSpy.mock.calls.find(
+      (call) => call[0] === "SIGTERM",
+    );
+    expect(sigtermCall).toBeDefined();
+    const handler = sigtermCall![1] as () => void;
+    handler();
+
+    // Let microtasks resolve
+    await vi.advanceTimersByTimeAsync(0);
+
+    expect(server.close).toHaveBeenCalled();
+  });
+
+  it("flushes logger after server closes", async () => {
+    const logger = createMockLogger();
+    const server = createMockServer();
+
+    registerGracefulShutdown({ logger, server });
+
+    const sigtermCall = processOnSpy.mock.calls.find(
+      (call) => call[0] === "SIGTERM",
+    );
+    const handler = sigtermCall![1] as () => void;
+    handler();
+
+    await vi.advanceTimersByTimeAsync(0);
+
+    expect(logger.flush).toHaveBeenCalled();
+  });
+
+  it("exits with code 0 after successful drain", async () => {
+    const logger = createMockLogger();
+    const server = createMockServer();
+
+    registerGracefulShutdown({ logger, server });
+
+    const sigtermCall = processOnSpy.mock.calls.find(
+      (call) => call[0] === "SIGTERM",
+    );
+    const handler = sigtermCall![1] as () => void;
+    handler();
+
+    await vi.advanceTimersByTimeAsync(0);
+
+    expect(processExitSpy).toHaveBeenCalledWith(0);
+  });
+
+  it("force-exits with code 1 if drain times out", async () => {
+    const logger = createMockLogger();
+    const server = {
+      close: vi.fn(), // never calls callback — simulates stuck connections
+    };
+
+    registerGracefulShutdown({ logger, server, drainTimeoutMs: 1000 });
+
+    const sigtermCall = processOnSpy.mock.calls.find(
+      (call) => call[0] === "SIGTERM",
+    );
+    const handler = sigtermCall![1] as () => void;
+    handler();
+
+    // Advance past the drain timeout
+    await vi.advanceTimersByTimeAsync(1100);
+
+    expect(processExitSpy).toHaveBeenCalledWith(1);
+  });
+
+  it("logs shutdown lifecycle events", async () => {
+    const logger = createMockLogger();
+    const server = createMockServer();
+
+    registerGracefulShutdown({ logger, server });
+
+    const sigtermCall = processOnSpy.mock.calls.find(
+      (call) => call[0] === "SIGTERM",
+    );
+    const handler = sigtermCall![1] as () => void;
+    handler();
+
+    await vi.advanceTimersByTimeAsync(0);
+
+    expect(logger.info).toHaveBeenCalledWith(
+      "SIGTERM received, starting graceful shutdown",
+      expect.any(Object),
+    );
+    expect(logger.info).toHaveBeenCalledWith(
+      "Server closed, flushing logs",
+      undefined,
+    );
+  });
+
+  it("uses default drainTimeoutMs of 30000", () => {
+    const logger = createMockLogger();
+    const server = {
+      close: vi.fn(), // never calls callback
+    };
+
+    registerGracefulShutdown({ logger, server });
+
+    const sigtermCall = processOnSpy.mock.calls.find(
+      (call) => call[0] === "SIGTERM",
+    );
+    const handler = sigtermCall![1] as () => void;
+    handler();
+
+    // Shouldn't have exited yet at 29s
+    vi.advanceTimersByTime(29_000);
+    expect(processExitSpy).not.toHaveBeenCalled();
+
+    // Should force-exit at 30s
+    vi.advanceTimersByTime(2_000);
+    expect(processExitSpy).toHaveBeenCalledWith(1);
+  });
+});
diff --git a/src/server/shutdown.ts b/src/server/shutdown.ts
new file mode 100644
index 00000000..255a1deb
--- /dev/null
+++ b/src/server/shutdown.ts
@@ -0,0 +1,68 @@
+import type { Logger } from "@/observability/logger/types.js";
+
+export interface GracefulShutdownOptions {
+  logger: Logger & { flush: () => Promise<void> };
+  server: { close: (cb: () => void) => void };
+  drainTimeoutMs?: number;
+}
+
+const DEFAULT_DRAIN_TIMEOUT_MS = 30_000;
+
+/**
+ * Registers a SIGTERM handler that gracefully shuts down the server.
+ *
+ * On SIGTERM:
+ * 1. Stops accepting new requests (server.close)
+ * 2. Waits for in-flight requests to drain (up to drainTimeoutMs)
+ * 3. Flushes the log buffer
+ * 4. Exits with code 0
+ *
+ * If drain times out, force-exits with code 1.
+ *
+ * This is a factory function — it does NOT auto-register as middleware.
+ * Registration happens in a future integration step.
+ */
+export function registerGracefulShutdown(
+  options: GracefulShutdownOptions,
+): void {
+  const { logger, server, drainTimeoutMs = DEFAULT_DRAIN_TIMEOUT_MS } =
+    options;
+
+  process.on("SIGTERM", () => {
+    logger.info("SIGTERM received, starting graceful shutdown", {
+      drainTimeoutMs,
+    });
+
+    let drained = false;
+
+    // Force-exit timer
+    const forceExitTimer = setTimeout(() => {
+      if (!drained) {
+        logger.error("Drain timeout exceeded, forcing exit", {
+          drainTimeoutMs,
+        });
+        process.exit(1);
+      }
+    }, drainTimeoutMs);
+
+    // Unref so the timer doesn't keep the process alive if drain succeeds
+    if (typeof forceExitTimer === "object" && "unref" in forceExitTimer) {
+      forceExitTimer.unref();
+    }
+
+    server.close(async () => {
+      drained = true;
+      clearTimeout(forceExitTimer);
+
+      logger.info("Server closed, flushing logs", undefined);
+
+      try {
+        await logger.flush();
+      } catch {
+        // Best-effort flush — don't block shutdown
+      }
+
+      process.exit(0);
+    });
+  });
+}