Palladium-catalyzed regiocontrolled intramolecular oxypalladation-initiated cascades of multifunctional internal alkyne bearing an N-tosyl tether deliver functionalized benzazepine as an exclusive product via 6-endo-dig pathway in 1,4-dioxane solvent and tetrahydroquinoline scaffold as a major product via the 5-exo-dig pathway in the DMSO solvent. The role of the solvent in controlling the regioselectivity is still unknown which can be a major hurdle for further reaction development. Moreover, the reaction in DMSO suffered from having a mixture of products, and no exclusive formation of tetrahydroquinoline was achieved. Herein, we report a concerted computational and experimental study, revealing the role of the solvent in controlling the reaction outcome. DFT study revealed that the formation of the σ-vinylpalladium intermediate is reversible for the 5-exo-dig pathway while it is irreversible for the 6-endo-dig mechanism in 1,4-dioxane and consequently, the 5-exo-dig pathway is difficult to proceed. In contrast, both the 5-exo-dig and 6-endo-dig pathways are irreversible in DMSO. We predicted an exclusive formation of isobenzofuranone-fused chromane via the 5-exo-dig pathway when the N-tosyl tether is replaced by the O-tether in the internal alkyne in DMSO. The experimental study confirms the theoretical hypothesis and provides a highly chemo-divergent approach for the synthesis of biologically significant chromane with a large substrate scope and up to 95% yield at room temperature.