diff --git a/tools/test/build_api/build_api_test.py b/tools/test/build_api/build_api_test.py
index 2fcfc947b8..cc397df839 100644
--- a/tools/test/build_api/build_api_test.py
+++ b/tools/test/build_api/build_api_test.py
@@ -18,11 +18,14 @@ limitations under the License.
 import unittest
 from collections import namedtuple
 from mock import patch, MagicMock
-from tools.build_api import prepare_toolchain, build_project, build_library
+from tools.build_api import prepare_toolchain, build_project, build_library, merge_region_list
 from tools.resources import Resources
 from tools.toolchains import TOOLCHAINS
 from tools.notifier.mock import MockNotifier
-
+from tools.config import Region
+from tools.utils import ToolException
+from intelhex import IntelHex
+import intelhex
 """
 Tests for build_api.py
 """
@@ -240,5 +243,36 @@ class BuildApiTests(unittest.TestCase):
         self.assertEqual(args[1]['app_config'], None,
                          "prepare_toolchain was called with an incorrect app_config")
 
+    @patch('tools.build_api.intelhex_offset')
+    @patch('tools.config')
+    def test_merge_region_no_fit(self, mock_config, mock_intelhex_offset):
+        """
+        Test that merge region fails as expected when part size overflows region size.
+        """
+        max_addr = 87444
+        # create a dummy hex file with above max_addr
+        mock_intelhex_offset.return_value = IntelHex({0:2, max_addr:0})
+
+        # create application and post-application regions and merge.
+        region_application = Region("application", 10000, 86000, True, "random.hex")
+        region_post_application = Region("postapplication", 100000, 90000, False, None)
+
+        notify = MockNotifier()
+        region_list = [region_application, region_post_application]
+        # path to store the result in, should not get used as we expect exception.
+        res = "./"
+        mock_config.target.restrict_size = 90000
+        toolexception = False
+
+        try:
+            merge_region_list(region_list, res, notify, mock_config)
+        except ToolException:
+            toolexception = True
+        except Exception as e:
+            print("%s %s" % (e.message, e.args))
+
+        self.assertTrue(toolexception, "Expected ToolException not raised")
+
+
 if __name__ == '__main__':
     unittest.main()