diff --git a/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/BSpan.java b/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/BSpan.java
index 1b9ecc424ceb..50b9be5606fe 100644
--- a/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/BSpan.java
+++ b/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/BSpan.java
@@ -31,6 +31,7 @@
 import io.opentelemetry.api.trace.SpanBuilder;
 import io.opentelemetry.api.trace.SpanContext;
 import io.opentelemetry.api.trace.SpanKind;
+import io.opentelemetry.api.trace.StatusCode;
 import io.opentelemetry.api.trace.Tracer;
 import io.opentelemetry.context.Context;
 import io.opentelemetry.context.propagation.TextMapGetter;
@@ -149,6 +150,10 @@ public void addEvent(String eventName, Attributes attributes) {
         span.addEvent(eventName, attributes);
     }
 
+    public void setStatus(StatusCode statusCode) {
+        span.setStatus(statusCode);
+    }
+
     public void addTags(Map<String, String> tags) {
         for (Map.Entry<String, String> entry : tags.entrySet()) {
             span.setAttribute(entry.getKey(), entry.getValue());
diff --git a/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/TracingUtils.java b/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/TracingUtils.java
index 1747c16ac9b4..944e804d333f 100644
--- a/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/TracingUtils.java
+++ b/bvm/ballerina-runtime/src/main/java/io/ballerina/runtime/observability/tracer/TracingUtils.java
@@ -20,6 +20,7 @@
 import io.ballerina.runtime.internal.values.ErrorValue;
 import io.ballerina.runtime.observability.ObserverContext;
 import io.ballerina.runtime.observability.metrics.Tag;
+import io.opentelemetry.api.trace.StatusCode;
 
 import java.util.Collections;
 import java.util.Map;
@@ -79,6 +80,9 @@ public static void stopObservation(ObserverContext observerContext) {
             ErrorValue bError = (ErrorValue) observerContext.getProperty(PROPERTY_ERROR_VALUE);
             if (bError != null) {
                 span.addTag(TAG_KEY_STR_ERROR_MESSAGE, bError.getPrintableStackTrace());
+                span.setStatus(StatusCode.ERROR);
+            } else {
+                span.setStatus(StatusCode.OK);
             }
 
             // Adding specific error code to Trace Span