diff --git a/casper-server/src/context.rs b/casper-server/src/context.rs
index 1c40fb6..3905825 100644
--- a/casper-server/src/context.rs
+++ b/casper-server/src/context.rs
@@ -141,7 +141,7 @@ impl AppContextInner {
 
         // Start task scheduler
         let max_background_tasks = self.config.main.max_background_tasks;
-        lua::tasks::start_task_scheduler(&lua, max_background_tasks);
+        lua::tasks::start_task_scheduler(lua, max_background_tasks);
 
         // Enable sandboxing before loading user code
         lua.sandbox(true)?;
diff --git a/casper-server/src/lua/tasks.rs b/casper-server/src/lua/tasks.rs
index 13ed111..af62d4c 100644
--- a/casper-server/src/lua/tasks.rs
+++ b/casper-server/src/lua/tasks.rs
@@ -1,3 +1,4 @@
+use std::rc::Rc;
 use std::result::Result as StdResult;
 use std::sync::atomic::{AtomicU64, Ordering};
 
@@ -5,7 +6,7 @@ use mlua::{
     AnyUserData, ExternalError, ExternalResult, Function, Lua, Result, Table, UserData, Value,
 };
 use tokio::sync::mpsc::{self, UnboundedReceiver, UnboundedSender};
-use tokio::sync::oneshot;
+use tokio::sync::{oneshot, watch};
 use tokio::task::JoinHandle;
 use tokio::time::{Duration, Instant};
 use tracing::warn;
@@ -30,8 +31,12 @@ struct TaskHandle {
     join_handle_rx: Option<oneshot::Receiver<TaskJoinHandle>>,
 }
 
+#[derive(Clone, Copy)]
 struct MaxBackgroundTasks(Option<u64>);
 
+#[derive(Clone)]
+struct ShutdownNotifier(watch::Sender<bool>);
+
 // Global task identifier
 static NEXT_TASK_ID: AtomicU64 = AtomicU64::new(1);
 
@@ -71,7 +76,7 @@ impl UserData for TaskHandle {
 }
 
 fn spawn_task(lua: &Lua, arg: Value) -> Result<StdResult<TaskHandle, String>> {
-    let max_background_tasks = lua.app_data_ref::<MaxBackgroundTasks>().unwrap();
+    let max_background_tasks = *lua.app_data_ref::<MaxBackgroundTasks>().unwrap();
     let current_tasks = tasks_counter_get!();
 
     if let Some(max_tasks) = max_background_tasks.0 {
@@ -128,23 +133,36 @@ fn spawn_task(lua: &Lua, arg: Value) -> Result<StdResult<TaskHandle, String>> {
 }
 
 pub fn start_task_scheduler(lua: &Lua, max_background_tasks: Option<u64>) {
-    let lua = lua.clone();
+    let lua = Rc::new(lua.clone());
     let mut task_rx = lua
         .remove_app_data::<UnboundedReceiver<Task>>()
         .expect("Failed to get task receiver");
 
     lua.set_app_data(MaxBackgroundTasks(max_background_tasks));
 
+    let (shutdown_tx, shutdown_rx) = watch::channel(false);
+    lua.set_app_data(ShutdownNotifier(shutdown_tx));
+
     tokio::task::spawn_local(async move {
         while let Some(task) = task_rx.recv().await {
+            let lua = lua.clone();
+            let mut shutdown = shutdown_rx.clone();
             let join_handle = tokio::task::spawn_local(async move {
                 let start = Instant::now();
                 let _task_count_guard = tasks_counter_inc!();
+                // Keep Lua instance alive while task is running
+                let _lua_guard = lua;
                 let task_future = task.handler.call_async::<Value>(());
 
                 let result = match task.timeout {
-                    Some(timeout) => ntex::time::timeout(timeout, task_future).await,
-                    None => Ok(task_future.await),
+                    Some(timeout) => tokio::select! {
+                        _ = shutdown.wait_for(|&x| x) => Ok(Err("task scheduler shutdown".to_string().into_lua_err())),
+                        result = ntex::time::timeout(timeout, task_future) => result,
+                    },
+                    None => tokio::select! {
+                        _ = shutdown.wait_for(|&x| x) => Ok(Err("task scheduler shutdown".to_string().into_lua_err())),
+                        result = task_future => Ok(result),
+                    },
                 };
                 // Outer Result errors will always be timeouts
                 let result = result
@@ -178,7 +196,9 @@ pub fn start_task_scheduler(lua: &Lua, max_background_tasks: Option<u64>) {
 
 pub fn stop_task_scheduler(lua: &Lua) {
     lua.remove_app_data::<UnboundedSender<Task>>();
-    lua.remove_app_data::<UnboundedReceiver<Task>>();
+
+    // Notify all tasks to stop
+    _ = lua.app_data_ref::<ShutdownNotifier>().unwrap().0.send(true);
 }
 
 pub fn create_module(lua: &Lua) -> Result<Table> {
@@ -192,14 +212,13 @@ pub fn create_module(lua: &Lua) -> Result<Table> {
 
 #[cfg(test)]
 mod tests {
-    use std::rc::Rc;
     use std::time::Duration;
 
     use mlua::{chunk, Lua, Result};
 
     #[ntex::test]
     async fn test_tasks() -> Result<()> {
-        let lua = Rc::new(Lua::new());
+        let lua = Lua::new();
 
         lua.globals().set("tasks", super::create_module(&lua)?)?;
         lua.globals().set(
@@ -331,6 +350,8 @@ mod tests {
         .await
         .unwrap();
 
+        super::stop_task_scheduler(&lua);
+
         Ok(())
     }
 }