diff --git a/py/vm.c b/py/vm.c
index 6a4634d006..64bddd6b5a 100644
--- a/py/vm.c
+++ b/py/vm.c
@@ -1359,10 +1359,11 @@ exception_handler:
 #if MICROPY_STACKLESS
 unwind_loop:
 #endif
-            // set file and line number that the exception occurred at
-            // TODO: don't set traceback for exceptions re-raised by END_FINALLY.
-            // But consider how to handle nested exceptions.
-            if (nlr.ret_val != &mp_const_GeneratorExit_obj) {
+            // Set traceback info (file and line number) where the exception occurred, but not for:
+            // - constant GeneratorExit object, because it's const
+            // - exceptions re-raised by END_FINALLY
+            if (nlr.ret_val != &mp_const_GeneratorExit_obj
+                && *code_state->ip != MP_BC_END_FINALLY) {
                 const byte *ip = code_state->fun_bc->bytecode;
                 ip = mp_decode_uint_skip(ip); // skip n_state
                 ip = mp_decode_uint_skip(ip); // skip n_exc_stack
diff --git a/tests/misc/print_exception.py b/tests/misc/print_exception.py
index 95431632f9..08b2e4bc48 100644
--- a/tests/misc/print_exception.py
+++ b/tests/misc/print_exception.py
@@ -47,6 +47,16 @@ except Exception as e:
     print('caught')
     print_exc(e)
 
+# Test that an exception propagated through a finally doesn't have a traceback added there
+try:
+    try:
+        f()
+    finally:
+        print('finally')
+except Exception as e:
+    print('caught')
+    print_exc(e)
+
 # Here we have a function with lots of bytecode generated for a single source-line, and
 # there is an error right at the end of the bytecode.  It should report the correct line.
 def f():