While extensive research has been conducted on the L2 perception and production of Mandarin lexical tones, the higher prosodic patterns, such as tone sandhi, remain less explored. This study examined the L2 production of the Mandarin Third Tone Sandhi (T3 Sandhi) by Japanese speakers at two Mandarin proficiency levels (intermediate and advanced). The participants read disyllabic stimuli with all possible tonal combinations of the T3 Sandhi. Different from the common approach which mainly relied on native speakers’ categorization of L2 learners’ tone production, we adopted a data-driven approach using hierarchical clustering to identify the distinct tonal patterns for each T3 Sandhi combination within each group. The results revealed a complex interplay of various factors influencing L2 production of the Mandarin T3 Sandhi, such as L1 Japanese pitch accent patterns, phonetic motivation of different T3 Sandhi, and L2 Mandarin tone inventory. The suspected influence from L1 Japanese pitch accent patterns is noted in intermediate-level learners, but advanced learners can overcome such influence. In both L2 learner groups, we found over-generalization of T3 Sandhi. In general, our study showed the transfer of L1 phonological processing to L2 tone sandhi production at an earlier stage of L2 acquisition.