diff --git a/src/compiler/config/outputs/index.ts b/src/compiler/config/outputs/index.ts
index 8673aae51173..36192f91a5e4 100644
--- a/src/compiler/config/outputs/index.ts
+++ b/src/compiler/config/outputs/index.ts
@@ -27,10 +27,6 @@ export const validateOutputTargets = (config: d.ValidatedConfig, diagnostics: d.
       err.messageText = `Invalid outputTarget type "${
         outputTarget.type
       }". Valid outputTarget types include: ${VALID_CONFIG_OUTPUT_TARGETS.map((t) => `"${t}"`).join(', ')}`;
-    } else if (outputTarget.type === DIST_CUSTOM_ELEMENTS_BUNDLE) {
-      // TODO(STENCIL-260): Remove this check when the 'dist-custom-elements-bundle' is removed
-      const warning = buildWarn(diagnostics);
-      warning.messageText = `dist-custom-elements-bundle is deprecated and will be removed in a future major version release. Use "dist-custom-elements" instead. If "dist-custom-elements" does not meet your needs, please add a comment to https://github.com/ionic-team/stencil/issues/3136.`;
     }
   });
 
diff --git a/src/compiler/config/test/validate-config.spec.ts b/src/compiler/config/test/validate-config.spec.ts
index 597ef45af9bb..de655583584b 100644
--- a/src/compiler/config/test/validate-config.spec.ts
+++ b/src/compiler/config/test/validate-config.spec.ts
@@ -345,19 +345,6 @@ describe('validation', () => {
     expect(validated.diagnostics).toHaveLength(1);
   });
 
-  it('should warn when dist-custom-elements-bundle is found', () => {
-    userConfig.outputTargets = [
-      {
-        type: 'dist-custom-elements-bundle',
-      },
-    ];
-    const validated = validateConfig(userConfig, bootstrapConfig);
-    expect(validated.diagnostics).toHaveLength(1);
-    expect(validated.diagnostics[0].messageText).toBe(
-      'dist-custom-elements-bundle is deprecated and will be removed in a future major version release. Use "dist-custom-elements" instead. If "dist-custom-elements" does not meet your needs, please add a comment to https://github.com/ionic-team/stencil/issues/3136.'
-    );
-  });
-
   it('should default outputTargets with www', () => {
     const { config } = validateConfig(userConfig, bootstrapConfig);
     expect(config.outputTargets.some((o) => o.type === 'www')).toBe(true);
diff --git a/src/compiler/output-targets/dist-custom-elements-bundle/custom-elements-build-conditionals.ts b/src/compiler/output-targets/dist-custom-elements-bundle/custom-elements-build-conditionals.ts
index 8353564d5c54..a84711dfa766 100644
--- a/src/compiler/output-targets/dist-custom-elements-bundle/custom-elements-build-conditionals.ts
+++ b/src/compiler/output-targets/dist-custom-elements-bundle/custom-elements-build-conditionals.ts
@@ -1,3 +1,4 @@
+// TODO(STENCIL-561): move this into ../dist-custom-elements and rename things accordingly
 import type * as d from '../../../declarations';
 import { getBuildFeatures, updateBuildConditionals } from '../../app-core/app-data';
 
diff --git a/src/compiler/output-targets/output-utils.ts b/src/compiler/output-targets/output-utils.ts
index b3620eea125d..1c9051884dba 100644
--- a/src/compiler/output-targets/output-utils.ts
+++ b/src/compiler/output-targets/output-utils.ts
@@ -28,6 +28,7 @@ export const isOutputTargetDistCollection = (o: d.OutputTarget): o is d.OutputTa
 export const isOutputTargetDistCustomElements = (o: d.OutputTarget): o is d.OutputTargetDistCustomElements =>
   o.type === DIST_CUSTOM_ELEMENTS;
 
+// TODO(STENCIL-561): fully delete dist-custom-elements-bundle code
 export const isOutputTargetDistCustomElementsBundle = (
   o: d.OutputTarget
 ): o is d.OutputTargetDistCustomElementsBundle => o.type === DIST_CUSTOM_ELEMENTS_BUNDLE;
@@ -73,6 +74,7 @@ export const CUSTOM = 'custom';
 export const DIST = 'dist';
 export const DIST_COLLECTION = 'dist-collection';
 export const DIST_CUSTOM_ELEMENTS = 'dist-custom-elements';
+// TODO(STENCIL-561): fully delete dist-custom-elements-bundle code
 export const DIST_CUSTOM_ELEMENTS_BUNDLE = 'dist-custom-elements-bundle';
 
 export const DIST_TYPES = 'dist-types';
@@ -101,7 +103,6 @@ export const VALID_CONFIG_OUTPUT_TARGETS = [
   DIST,
   DIST_COLLECTION,
   DIST_CUSTOM_ELEMENTS,
-  DIST_CUSTOM_ELEMENTS_BUNDLE,
   DIST_LAZY,
   DIST_HYDRATE_SCRIPT,
 
diff --git a/src/compiler/types/tests/validate-package-json.spec.ts b/src/compiler/types/tests/validate-package-json.spec.ts
index 2ef926562587..65ff9720eaa2 100644
--- a/src/compiler/types/tests/validate-package-json.spec.ts
+++ b/src/compiler/types/tests/validate-package-json.spec.ts
@@ -93,6 +93,7 @@ describe('validate-package-json', () => {
       expect(buildCtx.diagnostics).toHaveLength(0);
     });
 
+    // TODO(STENCIL-561): fully delete dist-custom-elements-bundle code
     it('validate custom elements bundle module', async () => {
       config.outputTargets = [
         {
diff --git a/test/end-to-end/stencil.config.ts b/test/end-to-end/stencil.config.ts
index 69ea184a6c26..4f0e05fe8fad 100644
--- a/test/end-to-end/stencil.config.ts
+++ b/test/end-to-end/stencil.config.ts
@@ -33,9 +33,6 @@ export const config: Config = {
     {
       type: 'dist',
     },
-    {
-      type: 'dist-custom-elements-bundle',
-    },
     {
       type: 'dist-hydrate-script',
     },
diff --git a/test/end-to-end/test-end-to-end-dist.js b/test/end-to-end/test-end-to-end-dist.js
index 92cbddd9d950..d6deb629cf10 100644
--- a/test/end-to-end/test-end-to-end-dist.js
+++ b/test/end-to-end/test-end-to-end-dist.js
@@ -9,11 +9,6 @@ fs.accessSync(path.join(distDir, 'loader'));
 fs.accessSync(path.join(distDir, 'index.cjs.js'));
 fs.accessSync(path.join(distDir, 'index.js'));
 
-const customElementsDir = path.join(distDir, 'custom-elements');
-fs.accessSync(path.join(customElementsDir, 'index.d.ts'));
-fs.accessSync(path.join(customElementsDir, 'index.js'));
-fs.accessSync(path.join(customElementsDir, 'index.js.map'));
-
 const collectionDir = path.join(distDir, 'collection');
 fs.accessSync(path.join(collectionDir, 'car-list', 'car-data.js'));
 fs.accessSync(path.join(collectionDir, 'car-list', 'car-data.js.map'));
diff --git a/test/hello-world/stencil.config.ts b/test/hello-world/stencil.config.ts
index 2c46c104fcde..d74079fc234f 100644
--- a/test/hello-world/stencil.config.ts
+++ b/test/hello-world/stencil.config.ts
@@ -4,7 +4,6 @@ export const config: Config = {
   namespace: 'HelloWorld',
   outputTargets: [
     { type: 'dist' },
-    { type: 'dist-custom-elements-bundle' },
     { type: 'dist-hydrate-script' },
     {
       type: 'www',