diff --git a/sycl/test-e2e/AOT/multiple-devices.cpp b/sycl/test-e2e/AOT/multiple-devices.cpp
index 78e7356541365..6fe0f51317517 100644
--- a/sycl/test-e2e/AOT/multiple-devices.cpp
+++ b/sycl/test-e2e/AOT/multiple-devices.cpp
@@ -5,27 +5,50 @@
 // SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
 //
 //===----------------------------------------------------------------------===//
+// End-to-end test for verifying that the targets specified at link command
+// line are used to select images from the fat binary built for multiple
+// targets, and that compilation occurs for those targets.
+
+// UNSUPPORTED: new-offload-model
+// UNSUPPORTED-TRACKER: https://github.com/intel/llvm/issues/20988
+//
+// Explanation: Old offloading model was accepting compilation of a fat binary
+// for AOT target without specifying specific device. In that case specific
+// device to AOT-compile for was specified at link command line and compilation
+// was happening only for targets specified in link command line, ignoring
+// targets specified in compile command line, which doesn't look correct. In the
+// new offloading model, the AOT images for all targets specified in compile
+// command line are honored and AOT-compiled at link stage. To make it correct,
+// if AOT target is specified at compile time, specific device should also be
+// provided at compilation command line.
+//
+// A modified test can be found at NewOffloadDriver/aot-multiple-device.cpp
 
 // REQUIRES: opencl-aot, ocloc, any-device-is-cpu, any-device-is-gpu, target-spir, opencl-cpu-rt
 
 // Produce a fat object for all targets (generic SPIR-V, CPU, GPU)
 // RUN: %clangxx -fsycl -fsycl-targets=spir64,spir64_x86_64,spir64_gen %S/Inputs/aot.cpp -c -o %t.o
 
-// CPU, GPU
-// RUN: %{run-aux} %clangxx -fsycl -fsycl-targets=spir64_x86_64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts %t.o -o %t_cpu_gpu.out
+// Verify that AOT compilation occurs for the targets (GPU, CPU)
+// specified in the link command line. Note that generic SPIR-V compilation
+// is enabled by default even when AOT GPU or CPU targets are specified.
+// RUN: %{run-aux} %clangxx -fsycl -fsycl-targets=spir64_x86_64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts -v %t.o -o %t_cpu_gpu.out 2>&1 | FileCheck %s --check-prefix=CHECK-AOT-CPU --check-prefix=CHECK-AOT-GPU --check-prefix=CHECK-GENERIC
 // RUN: %{run} %t_cpu_gpu.out
 
-// No AOT-compiled image for CPU
-// RUN: %clangxx -fsycl -fsycl-targets=spir64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts %t.o -o %t_spv_gpu.out
+// Verify that AOT compilation occurs for the targets (GPU) specified in
+// the link command line.
+// RUN: %clangxx -fsycl -fsycl-targets=spir64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts -v %t.o -o %t_spv_gpu.out 2>&1 | FileCheck %s --check-prefix=CHECK-GENERIC --check-prefix=CHECK-AOT-GPU --check-prefix=CHECK-NO-AOT-CPU
 // Check that execution on AOT-compatible devices is unaffected
 // RUN: env ONEAPI_DEVICE_SELECTOR="*:gpu" %{run-unfiltered-devices} %t_spv_gpu.out
 
-// No AOT-compiled image for GPU
-// RUN: %{run-aux} %clangxx -fsycl -fsycl-targets=spir64,spir64_x86_64 %t.o -o %t_spv_cpu.out
+// Verify that AOT compilation occurs for the targets (CPU) specified in
+// the link command line.
+// RUN: %{run-aux} %clangxx -fsycl -fsycl-targets=spir64,spir64_x86_64 -v %t.o -o %t_spv_cpu.out 2>&1 | FileCheck %s --check-prefix=CHECK-GENERIC --check-prefix=CHECK-AOT-CPU --check-prefix=CHECK-NO-AOT-GPU
 // Check that execution on AOT-compatible devices is unaffected
 // RUN: env ONEAPI_DEVICE_SELECTOR="*:cpu" %{run-unfiltered-devices} %t_spv_cpu.out
 
-// No AOT-compiled image for FPGA
-// RUN: %{run-aux} %clangxx -fsycl -fsycl-targets=spir64,spir64_x86_64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts %t.o -o %t_spv_cpu_gpu.out
-// Check that execution on AOT-compatible devices is unaffected
-// RUN: %{run} %t_spv_cpu_gpu.out
+// CHECK-GENERIC-DAG: clang-offload-wrapper{{.*}} -target=spir64{{[^_]}}
+// CHECK-AOT-CPU-DAG: clang-offload-wrapper{{.*}} -target=spir64_x86_64
+// CHECK-AOT-GPU-DAG: clang-offload-wrapper{{.*}} -target=spir64_gen
+// CHECK-NO-AOT-CPU-NOT: clang-offload-wrapper{{.*}} -target=spir64_x86_64
+// CHECK-NO-AOT-GPU-NOT: clang-offload-wrapper{{.*}} -target=spir64_gen
diff --git a/sycl/test-e2e/NewOffloadDriver/aot-multiple-devices.cpp b/sycl/test-e2e/NewOffloadDriver/aot-multiple-devices.cpp
new file mode 100644
index 0000000000000..cbee51ad49877
--- /dev/null
+++ b/sycl/test-e2e/NewOffloadDriver/aot-multiple-devices.cpp
@@ -0,0 +1,41 @@
+//==--------------- aot-multiple-device.cpp -------------------------------===//
+//
+// Part of the LLVM Project, under the Apache License v2.0 with LLVM Exceptions.
+// See https://llvm.org/LICENSE.txt for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+//
+//===----------------------------------------------------------------------===//
+// End-to-end test for verifying that when compiling a fat binary for multiple
+// device targets, all targets from the fat binary are processed during linking,
+// regardless of which specific targets are specified in the link command
+// line.
+
+// This test is copied from AOT/multiple_devices.cpp
+// and modified to test with the New Offloading Model.
+
+// REQUIRES: opencl-aot, ocloc, any-device-is-cpu, any-device-is-gpu, target-spir, opencl-cpu-rt
+
+// Produce a fat object for all targets (generic SPIR-V, CPU, GPU).
+// It is required to specify the device name when compiling AOT for GPU.
+// RUN: %{run-aux} %clangxx --offload-new-driver -fsycl -fsycl-targets=spir64,spir64_x86_64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts %S/Inputs/aot.cpp -c -o %t.o
+
+// Check that all targets compiled in the fat binary are selected during
+// linking.
+// RUN: %{run-aux} %clangxx --offload-new-driver -fsycl -fsycl-targets=spir64_x86_64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts -v %t.o -o %t_cpu_gpu.out 2>&1 | FileCheck %s --check-prefix=CHECK-DEVICE
+// RUN: %{run} %t_cpu_gpu.out
+
+// Check that all targets compiled in the fat binary are selected during
+// linking (including CPU even though it is not specified during linking).
+// RUN: %{run-aux} %clangxx --offload-new-driver -fsycl -fsycl-targets=spir64,spir64_gen -Xsycl-target-backend=spir64_gen %gpu_aot_target_opts -v %t.o -o %t_spv_gpu.out 2>&1 | FileCheck %s --check-prefix=CHECK-DEVICE
+// Check that execution on AOT-compatible devices is unaffected
+// RUN: env ONEAPI_DEVICE_SELECTOR="*:gpu" %{run-unfiltered-devices} %t_spv_gpu.out
+
+// Check that all targets compiled in the fat binary are selected during
+// linking (including GPU even though it is not specified during linking).
+// RUN: %{run-aux} %clangxx --offload-new-driver -fsycl -fsycl-targets=spir64,spir64_x86_64 -v %t.o -o %t_spv_cpu.out 2>&1 | FileCheck %s --check-prefix=CHECK-DEVICE
+// Check that execution on AOT-compatible devices is unaffected.
+// RUN: env ONEAPI_DEVICE_SELECTOR="*:cpu" %{run-unfiltered-devices} %t_spv_cpu.out
+
+// CHECK-DEVICE-DAG: spirv-to-ir-wrapper{{.*}}spir64_gen-unknown-unknown{{.*}}
+// CHECK-DEVICE-DAG: spirv-to-ir-wrapper{{.*}}spir64_x86_64-unknown-unknown{{.*}}
+// CHECK-DEVICE-DAG: spirv-to-ir-wrapper{{.*}}spir64-unknown-unknown{{.*}}