diff --git a/dev/tools/gen_defaults/lib/chip_template.dart b/dev/tools/gen_defaults/lib/chip_template.dart
index 4d9383399d16..cdbe10362c11 100644
--- a/dev/tools/gen_defaults/lib/chip_template.dart
+++ b/dev/tools/gen_defaults/lib/chip_template.dart
@@ -19,7 +19,6 @@ class _${blockName}DefaultsM3 extends ChipThemeData {
   _${blockName}DefaultsM3(this.context, this.isEnabled)
     : super(
         elevation: ${elevation("$tokenGroup$variant.container")},
-        shape: ${shape("$tokenGroup.container")},
         showCheckmark: true,
       );
 
@@ -47,9 +46,13 @@ class _${blockName}DefaultsM3 extends ChipThemeData {
   Color? get deleteIconColor => ${color("$tokenGroup.with-icon.selected.icon.color")};
 
   @override
-  BorderSide? get side => isEnabled
-    ? ${border('$tokenGroup$variant.outline')}
-    : ${border('$tokenGroup$variant.disabled.outline')};
+  OutlinedBorder? get shape {
+    return ${shape("$tokenGroup.container")}.copyWith(
+      side: isEnabled
+        ? ${border('$tokenGroup$variant.outline')}
+        : ${border('$tokenGroup$variant.disabled.outline')},
+    );
+  }
 
   @override
   IconThemeData? get iconTheme => IconThemeData(
diff --git a/packages/flutter/lib/src/material/chip.dart b/packages/flutter/lib/src/material/chip.dart
index 3e1eb6d7bacf..65ee8909eb0c 100644
--- a/packages/flutter/lib/src/material/chip.dart
+++ b/packages/flutter/lib/src/material/chip.dart
@@ -997,6 +997,7 @@ class _RawChipState extends State<RawChip> with MaterialStateMixin, TickerProvid
     final OutlinedBorder resolvedShape = MaterialStateProperty.resolveAs<OutlinedBorder?>(widget.shape, materialStates)
       ?? MaterialStateProperty.resolveAs<OutlinedBorder?>(chipTheme.shape, materialStates)
       ?? MaterialStateProperty.resolveAs<OutlinedBorder?>(chipDefaults.shape, materialStates)
+      // TODO(tahatesser): Remove this fallback when Material 2 is deprecated.
       ?? const StadiumBorder();
     return resolvedShape.copyWith(side: resolvedSide);
   }
@@ -2234,7 +2235,6 @@ class _ChipDefaultsM3 extends ChipThemeData {
   _ChipDefaultsM3(this.context, this.isEnabled)
     : super(
         elevation: 0.0,
-        shape: const RoundedRectangleBorder(borderRadius: BorderRadius.all(Radius.circular(8.0))),
         showCheckmark: true,
       );
 
@@ -2262,9 +2262,13 @@ class _ChipDefaultsM3 extends ChipThemeData {
   Color? get deleteIconColor => null;
 
   @override
-  BorderSide? get side => isEnabled
-    ? BorderSide(color: _colors.outline)
-    : BorderSide(color: _colors.onSurface.withOpacity(0.12));
+  OutlinedBorder? get shape {
+    return const RoundedRectangleBorder(borderRadius: BorderRadius.all(Radius.circular(8.0))).copyWith(
+      side: isEnabled
+        ? BorderSide(color: _colors.outline)
+        : BorderSide(color: _colors.onSurface.withOpacity(0.12)),
+    );
+  }
 
   @override
   IconThemeData? get iconTheme => IconThemeData(
diff --git a/packages/flutter/test/material/chip_test.dart b/packages/flutter/test/material/chip_test.dart
index d098936aa14e..9f369c2ffa3a 100644
--- a/packages/flutter/test/material/chip_test.dart
+++ b/packages/flutter/test/material/chip_test.dart
@@ -3503,6 +3503,60 @@ void main() {
     expect(calledDelete, isTrue);
   });
 
+  testWidgets("Material3 - RawChip.shape's side is used when provided", (WidgetTester tester) async {
+    Widget buildChip({ OutlinedBorder? shape, BorderSide? side }) {
+      return MaterialApp(
+        theme: ThemeData(useMaterial3: true),
+        home: Material(
+          child: Center(
+            child: RawChip(
+              shape: shape,
+              side: side,
+              label: const Text('RawChip'),
+            ),
+          ),
+        ),
+      );
+    }
+
+    // Test [RawChip.shape] with a side.
+    await tester.pumpWidget(buildChip(
+      shape: const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xffff00ff)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      )),
+    );
+
+    // Chip should have the provided shape and the side from [RawChip.shape].
+    expect(
+      getMaterial(tester).shape,
+      const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xffff00ff)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      ),
+    );
+
+    // Test [RawChip.shape] with a side and [RawChip.side].
+    await tester.pumpWidget(buildChip(
+      shape: const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xffff00ff)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      ),
+      side: const BorderSide(color: Color(0xfffff000))),
+    );
+    await tester.pumpAndSettle();
+
+    // Chip use shape from [RawChip.shape] and the side from [RawChip.side].
+    // [RawChip.shape]'s side should be ignored.
+    expect(
+      getMaterial(tester).shape,
+      const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xfffff000)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      ),
+    );
+  });
+
   group('Material 2', () {
     // These tests are only relevant for Material 2. Once Material 2
     // support is deprecated and the APIs are removed, these tests
diff --git a/packages/flutter/test/material/chip_theme_test.dart b/packages/flutter/test/material/chip_theme_test.dart
index 2303b56478cd..4ff0c5c31773 100644
--- a/packages/flutter/test/material/chip_theme_test.dart
+++ b/packages/flutter/test/material/chip_theme_test.dart
@@ -928,6 +928,64 @@ void main() {
       )),
     );
   });
+
+  testWidgets("Material3 - RawChip.shape's side is used when provided", (WidgetTester tester) async {
+    Widget buildChip({ OutlinedBorder? shape, BorderSide? side }) {
+      return MaterialApp(
+        theme: ThemeData(
+          useMaterial3: true,
+          chipTheme: ChipThemeData(
+            shape: shape,
+            side: side,
+          ),
+        ),
+        home: const Material(
+          child: Center(
+            child: RawChip(
+              label: Text('RawChip'),
+            ),
+          ),
+        ),
+      );
+    }
+
+    // Test [RawChip.shape] with a side.
+    await tester.pumpWidget(buildChip(
+      shape: const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xffff00ff)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      )),
+    );
+
+    // Chip should have the provided shape and the side from [RawChip.shape].
+    expect(
+      getMaterial(tester).shape,
+      const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xffff00ff)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      ),
+    );
+
+    // Test [RawChip.shape] with a side and [RawChip.side].
+    await tester.pumpWidget(buildChip(
+      shape: const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xffff00ff)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      ),
+      side: const BorderSide(color: Color(0xfffff000))),
+    );
+    await tester.pumpAndSettle();
+
+    // Chip use shape from [RawChip.shape] and the side from [RawChip.side].
+    // [RawChip.shape]'s side should be ignored.
+    expect(
+      getMaterial(tester).shape,
+      const RoundedRectangleBorder(
+        side: BorderSide(color: Color(0xfffff000)),
+        borderRadius: BorderRadius.all(Radius.circular(7.0)),
+      ),
+    );
+  });
 }
 
 class _MaterialStateOutlinedBorder extends StadiumBorder implements MaterialStateOutlinedBorder {