diff --git a/supabase/functions/process-selective-approval-v2/cors.ts b/supabase/functions/process-selective-approval-v2/cors.ts
new file mode 100644
index 00000000..14d9864d
--- /dev/null
+++ b/supabase/functions/process-selective-approval-v2/cors.ts
@@ -0,0 +1,4 @@
+export const corsHeaders = {
+  'Access-Control-Allow-Origin': '*',
+  'Access-Control-Allow-Headers': 'authorization, x-client-info, apikey, content-type',
+};
diff --git a/supabase/functions/process-selective-approval-v2/index.ts b/supabase/functions/process-selective-approval-v2/index.ts
new file mode 100644
index 00000000..b212dffd
--- /dev/null
+++ b/supabase/functions/process-selective-approval-v2/index.ts
@@ -0,0 +1,188 @@
+import { serve } from 'https://deno.land/std@0.168.0/http/server.ts';
+import { createClient } from 'https://esm.sh/@supabase/supabase-js@2.57.4';
+
+const SUPABASE_URL = Deno.env.get('SUPABASE_URL') || 'https://api.thrillwiki.com';
+const SUPABASE_ANON_KEY = Deno.env.get('SUPABASE_ANON_KEY')!;
+
+interface ApprovalRequest {
+  submissionId: string;
+  itemIds: string[];
+  idempotencyKey: string;
+}
+
+serve(async (req) => {
+  // Generate request ID for tracking
+  const requestId = crypto.randomUUID();
+  
+  try {
+    // STEP 1: Authentication
+    const authHeader = req.headers.get('Authorization');
+    if (!authHeader) {
+      return new Response(
+        JSON.stringify({ error: 'Missing Authorization header' }),
+        { status: 401, headers: { 'Content-Type': 'application/json' } }
+      );
+    }
+
+    const supabase = createClient(SUPABASE_URL, SUPABASE_ANON_KEY, {
+      global: { headers: { Authorization: authHeader } }
+    });
+
+    const { data: { user }, error: authError } = await supabase.auth.getUser();
+    if (authError || !user) {
+      return new Response(
+        JSON.stringify({ error: 'Unauthorized' }),
+        { status: 401, headers: { 'Content-Type': 'application/json' } }
+      );
+    }
+
+    console.log(`[${requestId}] Approval request from moderator ${user.id}`);
+
+    // STEP 2: Parse request
+    const body: ApprovalRequest = await req.json();
+    const { submissionId, itemIds, idempotencyKey } = body;
+
+    if (!submissionId || !itemIds || itemIds.length === 0) {
+      return new Response(
+        JSON.stringify({ error: 'Missing required fields: submissionId, itemIds' }),
+        { status: 400, headers: { 'Content-Type': 'application/json' } }
+      );
+    }
+
+    // STEP 3: Idempotency check
+    const { data: existingKey } = await supabase
+      .from('submission_idempotency_keys')
+      .select('*')
+      .eq('idempotency_key', idempotencyKey)
+      .single();
+
+    if (existingKey?.status === 'completed') {
+      console.log(`[${requestId}] Idempotency key already processed, returning cached result`);
+      return new Response(
+        JSON.stringify(existingKey.result_data),
+        {
+          status: 200,
+          headers: {
+            'Content-Type': 'application/json',
+            'X-Cache-Status': 'HIT'
+          }
+        }
+      );
+    }
+
+    // STEP 4: Fetch submission to get submitter_id
+    const { data: submission, error: submissionError } = await supabase
+      .from('content_submissions')
+      .select('user_id, status, assigned_to')
+      .eq('id', submissionId)
+      .single();
+
+    if (submissionError || !submission) {
+      console.error(`[${requestId}] Submission not found:`, submissionError);
+      return new Response(
+        JSON.stringify({ error: 'Submission not found' }),
+        { status: 404, headers: { 'Content-Type': 'application/json' } }
+      );
+    }
+
+    // STEP 5: Verify moderator can approve this submission
+    if (submission.assigned_to && submission.assigned_to !== user.id) {
+      console.error(`[${requestId}] Submission locked by another moderator`);
+      return new Response(
+        JSON.stringify({ error: 'Submission is locked by another moderator' }),
+        { status: 409, headers: { 'Content-Type': 'application/json' } }
+      );
+    }
+
+    if (!['pending', 'partially_approved'].includes(submission.status)) {
+      console.error(`[${requestId}] Invalid submission status: ${submission.status}`);
+      return new Response(
+        JSON.stringify({ error: 'Submission already processed' }),
+        { status: 400, headers: { 'Content-Type': 'application/json' } }
+      );
+    }
+
+    // STEP 6: Register idempotency key as processing
+    if (!existingKey) {
+      await supabase.from('submission_idempotency_keys').insert({
+        idempotency_key: idempotencyKey,
+        submission_id: submissionId,
+        moderator_id: user.id,
+        status: 'processing'
+      });
+    }
+
+    console.log(`[${requestId}] Calling process_approval_transaction RPC`);
+
+    // ============================================================================
+    // STEP 7: Call RPC function - entire approval in single atomic transaction
+    // ============================================================================
+    const { data: result, error: rpcError } = await supabase.rpc(
+      'process_approval_transaction',
+      {
+        p_submission_id: submissionId,
+        p_item_ids: itemIds,
+        p_moderator_id: user.id,
+        p_submitter_id: submission.user_id,
+        p_request_id: requestId
+      }
+    );
+
+    if (rpcError) {
+      // Transaction failed - EVERYTHING rolled back automatically by PostgreSQL
+      console.error(`[${requestId}] Approval transaction failed:`, rpcError);
+
+      // Update idempotency key to failed
+      await supabase
+        .from('submission_idempotency_keys')
+        .update({
+          status: 'failed',
+          error_message: rpcError.message,
+          completed_at: new Date().toISOString()
+        })
+        .eq('idempotency_key', idempotencyKey);
+
+      return new Response(
+        JSON.stringify({
+          error: 'Approval transaction failed',
+          message: rpcError.message,
+          details: rpcError.details
+        }),
+        { status: 500, headers: { 'Content-Type': 'application/json' } }
+      );
+    }
+
+    console.log(`[${requestId}] Transaction completed successfully:`, result);
+
+    // STEP 8: Success - update idempotency key
+    await supabase
+      .from('submission_idempotency_keys')
+      .update({
+        status: 'completed',
+        result_data: result,
+        completed_at: new Date().toISOString()
+      })
+      .eq('idempotency_key', idempotencyKey);
+
+    return new Response(
+      JSON.stringify(result),
+      {
+        status: 200,
+        headers: {
+          'Content-Type': 'application/json',
+          'X-Request-Id': requestId
+        }
+      }
+    );
+
+  } catch (error) {
+    console.error(`[${requestId}] Unexpected error:`, error);
+    return new Response(
+      JSON.stringify({
+        error: 'Internal server error',
+        message: error instanceof Error ? error.message : 'Unknown error'
+      }),
+      { status: 500, headers: { 'Content-Type': 'application/json' } }
+    );
+  }
+});