diff --git a/nemo/collections/common/prompts/canary2.py b/nemo/collections/common/prompts/canary2.py
index 84b05dbfb253..c6ba2e2bc847 100644
--- a/nemo/collections/common/prompts/canary2.py
+++ b/nemo/collections/common/prompts/canary2.py
@@ -81,6 +81,16 @@ class Canary2PromptFormatter(PromptFormatter):
                 "decodercontext": Modality.Text,
             },
         },
+        # User prompt.
+        # This role is used for injecting partial transcription for the current audio input.
+        # Use it as the last turn in the prompt to allow for resuming the transcription after a ceratin point.
+        # https://github.com/openai/whisper/discussions/117
+        "user_prefix": {
+            "template": "|prefix|",
+            "slots": {
+                "prefix": Modality.Text,
+            },
+        },
         # System's reponse.
         OUTPUT_ROLE: {
             "template": f"|text|{CANARY_EOS}",
diff --git a/tests/collections/common/prompt_formatters/conftest.py b/tests/collections/common/prompt_formatters/conftest.py
index 0cbb729c424b..7d5126be8c01 100644
--- a/tests/collections/common/prompt_formatters/conftest.py
+++ b/tests/collections/common/prompt_formatters/conftest.py
@@ -74,3 +74,25 @@ def canary_tokenizer(bpe_tokenizer, tmp_path_factory):
             "en": bpe_tokenizer,
         }
     )
+
+
+@pytest.fixture(scope="session")
+def canary2_tokenizer(bpe_tokenizer, tmp_path_factory):
+    tmpdir = tmp_path_factory.mktemp("spl_tokens_canary2")
+    spl_tokens = CanaryTokenizer.build_special_tokenizer(
+        [
+            "startofcontext",
+            "en",
+            "emo:undefined",
+            "noitn",
+            "notimestamp",
+            "nodiarize",
+        ],
+        tmpdir,
+    )
+    return CanaryTokenizer(
+        tokenizers={
+            "spl_tokens": spl_tokens,
+            "en": bpe_tokenizer,
+        }
+    )
diff --git a/tests/collections/common/prompt_formatters/test_canary2_prompt_formatter.py b/tests/collections/common/prompt_formatters/test_canary2_prompt_formatter.py
new file mode 100644
index 000000000000..ddec1ddd5b0f
--- /dev/null
+++ b/tests/collections/common/prompt_formatters/test_canary2_prompt_formatter.py
@@ -0,0 +1,106 @@
+# Copyright (c) 2025, NVIDIA CORPORATION.  All rights reserved.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+from nemo.collections.common.prompts.canary2 import Canary2PromptFormatter
+
+
+def test_canary2_prompt_formatter_training(canary2_tokenizer):
+    formatter = Canary2PromptFormatter(canary2_tokenizer)
+    ans = formatter.encode_dialog(
+        [
+            {
+                "role": "user",
+                "slots": {
+                    "decodercontext": "",
+                    "emotion": "<|emo:undefined|>",
+                    "source_lang": "<|en|>",
+                    "target_lang": "<|en|>",
+                    "pnc": "<|pnc|>",
+                    "itn": "<|noitn|>",
+                    "timestamp": "<|notimestamp|>",
+                    "diarize": "<|nodiarize|>",
+                    "prompt_language": "spl_tokens",
+                },
+            },
+            {"role": "assistant", "slots": {"text": "TEST", "prompt_language": "en"}},
+        ]
+    )
+    assert set(ans) == {"input_ids", "context_ids", "answer_ids", "mask"}
+    # fmt: off
+    assert canary2_tokenizer.ids_to_text(ans["input_ids"].tolist()) == '<|startofcontext|><|startoftranscript|><|emo:undefined|><|en|><|en|><|pnc|><|noitn|><|notimestamp|><|nodiarize|> TEST<|endoftext|>'
+    assert canary2_tokenizer.ids_to_text(ans["context_ids"].tolist()) == '<|startofcontext|><|startoftranscript|><|emo:undefined|><|en|><|en|><|pnc|><|noitn|><|notimestamp|><|nodiarize|>'
+    assert canary2_tokenizer.ids_to_text(ans["answer_ids"].tolist()) == ' TEST<|endoftext|>'
+    assert ans["mask"].shape[0] == ans["input_ids"].shape[0]
+    # fmt: on
+
+
+def test_canary2_prompt_formatter_inference(canary2_tokenizer):
+    formatter = Canary2PromptFormatter(canary2_tokenizer)
+    ans = formatter.encode_dialog(
+        [
+            {
+                "role": "user",
+                "slots": {
+                    "decodercontext": "",
+                    "emotion": "<|emo:undefined|>",
+                    "source_lang": "<|en|>",
+                    "target_lang": "<|en|>",
+                    "pnc": "<|pnc|>",
+                    "itn": "<|noitn|>",
+                    "timestamp": "<|notimestamp|>",
+                    "diarize": "<|nodiarize|>",
+                    "prompt_language": "spl_tokens",
+                },
+            },
+        ]
+    )
+    assert set(ans) == {"input_ids", "context_ids"}
+    # fmt: off
+    assert ans["input_ids"].tolist() == ans["context_ids"].tolist()
+    assert canary2_tokenizer.ids_to_text(ans["input_ids"].tolist()) == '<|startofcontext|><|startoftranscript|><|emo:undefined|><|en|><|en|><|pnc|><|noitn|><|notimestamp|><|nodiarize|>'
+    # fmt: on
+
+
+def test_canary2_prompt_formatter_inference_prefix(canary2_tokenizer):
+    formatter = Canary2PromptFormatter(canary2_tokenizer)
+    ans = formatter.encode_dialog(
+        [
+            {
+                "role": "user",
+                "slots": {
+                    "decodercontext": "",
+                    "emotion": "<|emo:undefined|>",
+                    "source_lang": "<|en|>",
+                    "target_lang": "<|en|>",
+                    "pnc": "<|pnc|>",
+                    "itn": "<|noitn|>",
+                    "timestamp": "<|notimestamp|>",
+                    "diarize": "<|nodiarize|>",
+                    "prompt_language": "spl_tokens",
+                },
+            },
+            {
+                "role": "user_prefix",
+                "slots": {
+                    "prefix": "TEST",
+                    "prompt_language": "en",
+                },
+            },
+        ]
+    )
+    assert set(ans) == {"input_ids", "context_ids"}
+    # fmt: off
+    assert ans["input_ids"].tolist() == ans["context_ids"].tolist()
+    assert canary2_tokenizer.ids_to_text(ans["input_ids"].tolist()) == '<|startofcontext|><|startoftranscript|><|emo:undefined|><|en|><|en|><|pnc|><|noitn|><|notimestamp|><|nodiarize|> TEST'
+    # fmt: on