diff --git a/python/intellij.python.community.impl.iml b/python/intellij.python.community.impl.iml
index 1405e070e978..60b5a0d59d65 100644
--- a/python/intellij.python.community.impl.iml
+++ b/python/intellij.python.community.impl.iml
@@ -148,5 +148,6 @@
     <orderEntry type="module" module-name="intellij.platform.externalSystem.impl" />
     <orderEntry type="module" module-name="intellij.platform.externalSystem" />
     <orderEntry type="library" name="http-client" level="project" />
+    <orderEntry type="library" name="commons-lang3" level="project" />
   </component>
 </module>
\ No newline at end of file
diff --git a/python/python-venv/src/com/intellij/python/community/impl/venv/venv.kt b/python/python-venv/src/com/intellij/python/community/impl/venv/venv.kt
index 4be91d02c279..2507d6a1507d 100644
--- a/python/python-venv/src/com/intellij/python/community/impl/venv/venv.kt
+++ b/python/python-venv/src/com/intellij/python/community/impl/venv/venv.kt
@@ -20,7 +20,6 @@ import kotlinx.coroutines.Dispatchers
 import kotlinx.coroutines.withContext
 import org.jetbrains.annotations.ApiStatus.Internal
 import org.jetbrains.annotations.CheckReturnValue
-import java.nio.file.Path
 import kotlin.io.path.pathString
 import kotlin.time.Duration.Companion.minutes
 
@@ -37,7 +36,7 @@ suspend fun createVenv(
   venvDir: Directory,
   inheritSitePackages: Boolean = false,
   envReader: VirtualEnvReader = VirtualEnvReader.Instance,
-): Result<Path, PyError> {
+): Result<PythonBinary, PyError> {
   val execService = ExecService()
   val args = buildList {
     if (inheritSitePackages) {
diff --git a/python/src/com/jetbrains/python/projectCreation/venvWithSdkCreator.kt b/python/src/com/jetbrains/python/projectCreation/venvWithSdkCreator.kt
index 4a15d828c1a5..7ebd6b6b8925 100644
--- a/python/src/com/jetbrains/python/projectCreation/venvWithSdkCreator.kt
+++ b/python/src/com/jetbrains/python/projectCreation/venvWithSdkCreator.kt
@@ -21,7 +21,6 @@ import com.jetbrains.python.errorProcessing.failure
 import com.jetbrains.python.sdk.configurePythonSdk
 import com.jetbrains.python.sdk.createSdk
 import com.jetbrains.python.sdk.flavors.PythonSdkFlavor
-import com.jetbrains.python.sdk.pythonSdk
 import com.jetbrains.python.sdk.setAssociationToModuleAsync
 import com.jetbrains.python.venvReader.VirtualEnvReader
 import kotlinx.coroutines.Dispatchers
@@ -87,7 +86,6 @@ suspend fun createVenvAndSdk(
   }
   configurePythonSdk(project, module, sdk)
   sdk.setAssociationToModuleAsync(module)
-  module.pythonSdk
   return Result.success(sdk)
 }
 
diff --git a/python/src/com/jetbrains/python/sdk/ModuleOrProject.kt b/python/src/com/jetbrains/python/sdk/ModuleOrProject.kt
index c91fbe92d2db..374e0cccbdbe 100644
--- a/python/src/com/jetbrains/python/sdk/ModuleOrProject.kt
+++ b/python/src/com/jetbrains/python/sdk/ModuleOrProject.kt
@@ -1,4 +1,4 @@
-// Copyright 2000-2024 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
+// Copyright 2000-2025 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
 package com.jetbrains.python.sdk
 
 import com.intellij.openapi.module.Module
@@ -35,6 +35,12 @@ sealed class ModuleOrProject(val project: Project) {
   class ModuleAndProject(val module: Module) : ModuleOrProject(module.project)
 }
 
+val ModuleOrProject.moduleIfExists: Module?
+  get() = when (this) {
+    is ModuleOrProject.ModuleAndProject -> module
+    is ModuleOrProject.ProjectOnly -> null
+  }
+
 val ModuleOrProject.destructured: Pair<Project, Module?>
   get() = when (this) {
     is ModuleOrProject.ProjectOnly -> project to null
diff --git a/python/src/com/jetbrains/python/sdk/add/v2/CustomExistingEnvironmentSelector.kt b/python/src/com/jetbrains/python/sdk/add/v2/CustomExistingEnvironmentSelector.kt
index 9a4111577e56..37e983506f2e 100644
--- a/python/src/com/jetbrains/python/sdk/add/v2/CustomExistingEnvironmentSelector.kt
+++ b/python/src/com/jetbrains/python/sdk/add/v2/CustomExistingEnvironmentSelector.kt
@@ -9,12 +9,14 @@ import com.intellij.python.community.services.shared.PythonWithLanguageLevel
 import com.intellij.ui.dsl.builder.Align
 import com.intellij.ui.dsl.builder.Panel
 import com.jetbrains.python.PyBundle.message
+import com.jetbrains.python.errorProcessing.ErrorSink
 import com.jetbrains.python.newProject.collector.InterpreterStatisticsInfo
 import com.jetbrains.python.sdk.ModuleOrProject
+import com.jetbrains.python.sdk.moduleIfExists
 import com.jetbrains.python.statistics.InterpreterCreationMode
 import com.jetbrains.python.statistics.InterpreterType
-import com.jetbrains.python.errorProcessing.ErrorSink
 import kotlinx.coroutines.flow.MutableStateFlow
+import kotlinx.coroutines.flow.map
 import kotlinx.coroutines.launch
 import org.jetbrains.annotations.ApiStatus.Internal
 import java.nio.file.Path
@@ -64,7 +66,7 @@ internal abstract class CustomExistingEnvironmentSelector(private val name: Stri
   }
 
   override fun onShown() {
-    comboBox.setItems(existingEnvironments)
+    comboBox.setItems(existingEnvironments.map { sortForExistingEnvironment(it, moduleOrProject.moduleIfExists) })
   }
 
   override fun createStatisticsInfo(target: PythonInterpreterCreationTargets): InterpreterStatisticsInfo {
diff --git a/python/src/com/jetbrains/python/sdk/add/v2/PythonExistingEnvironmentSelector.kt b/python/src/com/jetbrains/python/sdk/add/v2/PythonExistingEnvironmentSelector.kt
index 3f1a62519921..8ceca4cbc1e9 100644
--- a/python/src/com/jetbrains/python/sdk/add/v2/PythonExistingEnvironmentSelector.kt
+++ b/python/src/com/jetbrains/python/sdk/add/v2/PythonExistingEnvironmentSelector.kt
@@ -11,8 +11,10 @@ import com.jetbrains.python.errorProcessing.ErrorSink
 import com.jetbrains.python.errorProcessing.PyError
 import com.jetbrains.python.newProject.collector.InterpreterStatisticsInfo
 import com.jetbrains.python.sdk.ModuleOrProject
+import com.jetbrains.python.sdk.moduleIfExists
 import com.jetbrains.python.statistics.InterpreterCreationMode
 import com.jetbrains.python.statistics.InterpreterType
+import kotlinx.coroutines.flow.map
 
 class PythonExistingEnvironmentSelector(model: PythonAddInterpreterModel, private val moduleOrProject: ModuleOrProject?) : PythonExistingEnvironmentConfigurator(model) {
 
@@ -32,7 +34,7 @@ class PythonExistingEnvironmentSelector(model: PythonAddInterpreterModel, privat
   }
 
   override fun onShown() {
-    comboBox.setItems(model.allInterpreters)
+    comboBox.setItems(model.allInterpreters.map { sortForExistingEnvironment(it, moduleOrProject?.moduleIfExists) })
   }
 
   override suspend fun getOrCreateSdk(moduleOrProject: ModuleOrProject): Result<Sdk, PyError> {
diff --git a/python/src/com/jetbrains/python/sdk/add/v2/models.kt b/python/src/com/jetbrains/python/sdk/add/v2/models.kt
index cd79871b744a..25787839bcfb 100644
--- a/python/src/com/jetbrains/python/sdk/add/v2/models.kt
+++ b/python/src/com/jetbrains/python/sdk/add/v2/models.kt
@@ -45,6 +45,7 @@ import com.jetbrains.python.sdk.uv.impl.getUvExecutable
 import com.jetbrains.python.venvReader.tryResolvePath
 import kotlinx.coroutines.*
 import kotlinx.coroutines.flow.*
+import org.apache.commons.lang3.builder.CompareToBuilder
 import java.nio.file.InvalidPathException
 import java.nio.file.Path
 import kotlin.io.path.Path
@@ -355,7 +356,7 @@ class PythonLocalAddInterpreterModel(params: PyInterpreterModelParams) : PythonM
 }
 
 
-sealed class PythonSelectableInterpreter {
+sealed class PythonSelectableInterpreter : Comparable<PythonSelectableInterpreter> {
   /**
    * Base python is some system python (not venv) which can be used as a base for venv.
    * In terms of flavors we call it __not__ [PythonSdkFlavor.isPlatformIndependent]
@@ -368,6 +369,12 @@ sealed class PythonSelectableInterpreter {
   abstract val languageLevel: LanguageLevel
   open val uiCustomization: UICustomization? = null
   override fun toString(): String = "PythonSelectableInterpreter(homePath='$homePath')"
+
+  override fun compareTo(other: PythonSelectableInterpreter): Int =
+    CompareToBuilder()
+      .append(uiCustomization?.hashCode(), other.uiCustomization?.hashCode())
+      .append(other.languageLevel, languageLevel)
+      .toComparison()
 }
 
 class ExistingSelectableInterpreter(
@@ -379,7 +386,13 @@ class ExistingSelectableInterpreter(
     !sdk.sdkFlavor.isPlatformIndependent
   }
 
+  override fun toString(): String {
+    return "ExistingSelectableInterpreter(sdk=$sdk, languageLevel=$languageLevel, isSystemWide=$isSystemWide, homePath='$homePath')"
+  }
+
   override val homePath = sdk.homePath!! // todo is it safe
+
+
 }
 
 /**
@@ -390,14 +403,12 @@ class DetectedSelectableInterpreter(
   override val languageLevel: LanguageLevel,
   private val isBase: Boolean,
   override val uiCustomization: UICustomization? = null,
-) : PythonSelectableInterpreter(), Comparable<DetectedSelectableInterpreter> {
+) : PythonSelectableInterpreter() {
   override suspend fun isBasePython(): Boolean = isBase
-
-
-  override fun compareTo(other: DetectedSelectableInterpreter): Int { // First by type
-    val byType = (uiCustomization?.title ?: "").compareTo(other.uiCustomization?.title ?: "") // Then from the highest python to the lowest
-    return if (byType != 0) byType else (languageLevel.compareTo(other.languageLevel) * -1)
+  override fun toString(): String {
+    return "DetectedSelectableInterpreter(homePath='$homePath', languageLevel=$languageLevel, isBase=$isBase, uiCustomization=$uiCustomization)"
   }
+
 }
 
 class ManuallyAddedSelectableInterpreter(
@@ -405,6 +416,12 @@ class ManuallyAddedSelectableInterpreter(
   override val languageLevel: LanguageLevel,
 ) : PythonSelectableInterpreter() {
   constructor(python: PythonWithLanguageLevel) : this(python.pythonBinary.pathString, python.languageLevel)
+
+  override fun toString(): String {
+    return "ManuallyAddedSelectableInterpreter(homePath='$homePath', languageLevel=$languageLevel)"
+  }
+
+
 }
 
 class InstallableSelectableInterpreter(val sdk: PySdkToInstall) : PythonSelectableInterpreter() {
diff --git a/python/src/com/jetbrains/python/sdk/add/v2/sortForExistingEnvironment.kt b/python/src/com/jetbrains/python/sdk/add/v2/sortForExistingEnvironment.kt
new file mode 100644
index 000000000000..526695ea37e6
--- /dev/null
+++ b/python/src/com/jetbrains/python/sdk/add/v2/sortForExistingEnvironment.kt
@@ -0,0 +1,98 @@
+// Copyright 2000-2025 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
+package com.jetbrains.python.sdk.add.v2
+
+import com.intellij.openapi.diagnostic.fileLogger
+import com.intellij.openapi.module.Module
+import com.jetbrains.python.sdk.associatedModulePath
+import com.jetbrains.python.sdk.getOrCreateAdditionalData
+import com.jetbrains.python.sdk.isAssociatedWithAnotherModule
+import com.jetbrains.python.sdk.isAssociatedWithModule
+import com.jetbrains.python.venvReader.VirtualEnvReader
+import kotlinx.coroutines.Dispatchers
+import kotlinx.coroutines.withContext
+import org.jetbrains.annotations.ApiStatus
+import java.nio.file.Path
+
+
+private val LOG = fileLogger()
+
+/**
+ * Python order, see PY-78035
+ */
+private enum class Group {
+  /**
+   * SDK venvs, associated with a current module
+   */
+  ASSOC_WITH_PROJ_ROOT,
+
+  /**
+   * SDK venvs no associated with any project
+   */
+  SHARED_VENVS,
+
+  /**
+   * Venvs in a user home
+   */
+  VENVS_IN_USER_HOME,
+
+  /**
+   * System (both vanilla and from providers)
+   */
+  OTHER,
+
+  /**
+   * Those, which should be filtered out
+   */
+  REDUNDANT
+}
+
+/**
+ * Sorts and filters [pythons] to show them in "existing pythons" combobox in v2.
+ * If [module] is set, v2 is displayed for the certain module.
+ */
+@ApiStatus.Internal
+suspend fun sortForExistingEnvironment(
+  pythons: Collection<PythonSelectableInterpreter>,
+  module: Module?,
+  venvReader: VirtualEnvReader = VirtualEnvReader.Companion.Instance,
+): List<PythonSelectableInterpreter> {
+  val venvRoot = withContext(Dispatchers.IO) {
+    venvReader.getVEnvRootDir()
+  }
+  return withContext(Dispatchers.Default) {
+    val groupedPythons = pythons.groupBy {
+      when (it) {
+        is InstallableSelectableInterpreter -> error("$it is unexpected")
+        is DetectedSelectableInterpreter, is ManuallyAddedSelectableInterpreter -> Unit // Those are pythons, and not SDKs
+        is ExistingSelectableInterpreter -> { //SDKs
+          if (module != null) {
+            if (it.sdk.isAssociatedWithModule(module)) {
+              return@groupBy Group.ASSOC_WITH_PROJ_ROOT
+            }
+            else if (it.sdk.isAssociatedWithAnotherModule(module)) {
+              return@groupBy Group.REDUNDANT // Foreign SDK
+            }
+          }
+          else if (it.sdk.getOrCreateAdditionalData().associatedModulePath != null) {
+            // module == null, associated path != null: associated sdk can't be used without a module
+            return@groupBy Group.REDUNDANT
+          }
+          if (it.sdk.associatedModulePath == null) { // Shared SDK
+            return@groupBy Group.SHARED_VENVS
+          }
+        }
+      }
+      return@groupBy if (Path.of(it.homePath).startsWith(venvRoot)) Group.VENVS_IN_USER_HOME else Group.OTHER
+    }
+    if (LOG.isDebugEnabled) {
+      LOG.debug(groupedPythons.map { (group, pythons) ->
+        "$group: (${pythons.joinToString()})"
+      }.joinToString("\n"))
+    }
+
+    groupedPythons.filterKeys { it != Group.REDUNDANT }.toSortedMap().flatMap { (_, pythons) ->
+      pythons.sorted()
+    }.distinctBy { it.homePath }
+  }
+}
+