diff --git a/api/v1/runtime_types.go b/api/v1/runtime_types.go
index 13e510fd..c0847732 100644
--- a/api/v1/runtime_types.go
+++ b/api/v1/runtime_types.go
@@ -241,10 +241,10 @@ func (k *Runtime) UpdateStateDeletion(c RuntimeConditionType, r RuntimeCondition
 }
 
 func (k *Runtime) UpdateStatePending(c RuntimeConditionType, r RuntimeConditionReason, status, msg string) {
-	if status != "False" {
-		k.Status.State = RuntimeStatePending
-	} else {
+	if status == "False" {
 		k.Status.State = RuntimeStateFailed
+	} else {
+		k.Status.State = RuntimeStatePending
 	}
 
 	condition := metav1.Condition{
diff --git a/internal/controller/runtime/fsm/runtime_fsm_waiting_shoot_creation.go b/internal/controller/runtime/fsm/runtime_fsm_waiting_shoot_creation.go
index 7df15da6..0d7564d0 100644
--- a/internal/controller/runtime/fsm/runtime_fsm_waiting_shoot_creation.go
+++ b/internal/controller/runtime/fsm/runtime_fsm_waiting_shoot_creation.go
@@ -31,6 +31,16 @@ func sFnWaitForShootCreation(_ context.Context, m *fsm, s *systemState) (stateFn
 
 	switch s.shoot.Status.LastOperation.State {
 	case gardener.LastOperationStateProcessing, gardener.LastOperationStatePending, gardener.LastOperationStateAborted, gardener.LastOperationStateError:
+		if stateNoMatchingSeeds(s.shoot) {
+			m.log.Info(fmt.Sprintf("Shoot %s has no matching seeds, setting error state", s.shoot.Name))
+			s.instance.UpdateStatePending(
+				imv1.ConditionTypeRuntimeProvisioned,
+				imv1.ConditionReasonCreationError,
+				"False",
+				"Shoot creation failed, no matching seeds")
+			return updateStatusAndStop()
+		}
+
 		m.log.Info(fmt.Sprintf("Shoot %s is in %s state, scheduling for retry", s.shoot.Name, s.shoot.Status.LastOperation.State))
 
 		s.instance.UpdateStatePending(
@@ -81,3 +91,14 @@ func sFnWaitForShootCreation(_ context.Context, m *fsm, s *systemState) (stateFn
 		return stopWithMetrics()
 	}
 }
+
+func stateNoMatchingSeeds(shoot *gardener.Shoot) bool {
+	if shoot == nil {
+		return false
+	}
+
+	var seedsCount int
+	var provider string
+	_, err := fmt.Sscanf(shoot.Status.LastOperation.Description, "Failed to schedule Shoot: none out of the %d seeds has a matching provider for %q", &seedsCount, &provider)
+	return err == nil
+}