diff --git a/litellm/llms/hosted_vllm/chat/transformation.py b/litellm/llms/hosted_vllm/chat/transformation.py
index 29dc485732f..f7a863416ed 100644
--- a/litellm/llms/hosted_vllm/chat/transformation.py
+++ b/litellm/llms/hosted_vllm/chat/transformation.py
@@ -28,10 +28,11 @@ from ...openai.chat.gpt_transformation import OpenAIGPTConfig
 
 
 class HostedVLLMChatConfig(OpenAIGPTConfig):
-    def _convert_custom_tools_to_function_tools(self, tools: list[dict[str, Any]]) -> list[dict[str, Any]]:
+    def _convert_tools_to_function_tools(self, tools: list[dict[str, Any]]) -> list[dict[str, Any]]:
         """
         vLLM chat completions currently accepts only OpenAI function tools.
-        Convert custom tools into function tools so request validation does not fail.
+        Convert custom tools and flattened function tools so request validation
+        does not fail.
         """
         converted_tools: Final[list[dict[str, Any]]] = []
         for idx, tool in enumerate(tools):
@@ -39,18 +40,22 @@ class HostedVLLMChatConfig(OpenAIGPTConfig):
                 converted_tools.append(tool)
                 continue
 
-            if tool.get("type") != "custom":
+            if tool.get("type") == "custom":
+                source_tool = tool.get("custom", {})
+                if not isinstance(source_tool, dict):
+                    source_tool = {}
+                tool_name = source_tool.get("name") or tool.get("name") or f"custom_tool_{idx}"
+                tool_description = source_tool.get("description") or tool.get("description")
+                tool_parameters = source_tool.get("input_schema") or tool.get("input_schema")
+            elif tool.get("type") == "function" and not isinstance(tool.get("function"), dict):
+                source_tool = tool
+                tool_name = source_tool.get("name") or f"function_tool_{idx}"
+                tool_description = source_tool.get("description")
+                tool_parameters = source_tool.get("parameters")
+            else:
                 converted_tools.append(tool)
                 continue
 
-            custom_tool = tool.get("custom", {})
-            if not isinstance(custom_tool, dict):
-                custom_tool = {}
-
-            tool_name = custom_tool.get("name") or tool.get("name") or f"custom_tool_{idx}"
-            tool_description = custom_tool.get("description") or tool.get("description")
-            tool_parameters = custom_tool.get("input_schema") or tool.get("input_schema")
-
             if not isinstance(tool_parameters, dict):
                 tool_parameters = {
                     "type": "object",
@@ -94,7 +99,7 @@ class HostedVLLMChatConfig(OpenAIGPTConfig):
             _tools = _remove_additional_properties(_tools)
             _tools = _remove_strict_from_schema(_tools)
             if isinstance(_tools, list):
-                _tools = self._convert_custom_tools_to_function_tools(_tools)
+                _tools = self._convert_tools_to_function_tools(_tools)
         if _tools is not None:
             non_default_params["tools"] = _tools
 
diff --git a/tests/test_litellm/llms/hosted_vllm/chat/test_hosted_vllm_chat_transformation.py b/tests/test_litellm/llms/hosted_vllm/chat/test_hosted_vllm_chat_transformation.py
index 82b05601a85..3c077983175 100644
--- a/tests/test_litellm/llms/hosted_vllm/chat/test_hosted_vllm_chat_transformation.py
+++ b/tests/test_litellm/llms/hosted_vllm/chat/test_hosted_vllm_chat_transformation.py
@@ -1,7 +1,6 @@
 import json
 from unittest.mock import MagicMock, patch
 
-
 from litellm.constants import (
     DEFAULT_REASONING_EFFORT_HIGH_THINKING_BUDGET,
     DEFAULT_REASONING_EFFORT_LOW_THINKING_BUDGET,
@@ -433,3 +432,39 @@ def test_hosted_vllm_custom_tools_use_top_level_input_schema():
     assert tools[0]["function"]["name"] == "search"
     assert tools[0]["function"]["description"] == "Search docs"
     assert tools[0]["function"]["parameters"] == input_schema
+
+
+def test_hosted_vllm_flattens_function_tools_into_nested_function_shape():
+    config = HostedVLLMChatConfig()
+    input_schema = {
+        "type": "object",
+        "properties": {"site_id": {"type": "string"}},
+        "required": ["site_id"],
+    }
+
+    optional_params = config.map_openai_params(
+        non_default_params={
+            "tools": [
+                {
+                    "type": "function",
+                    "name": "matomo-matomo_site_list",
+                    "description": "Get Matomo site details",
+                    "parameters": input_schema,
+                }
+            ]
+        },
+        optional_params={},
+        model="hosted_vllm/gpt-oss-120b",
+        drop_params=False,
+    )
+
+    tools = optional_params["tools"]
+    assert len(tools) == 1
+    assert tools[0] == {
+        "type": "function",
+        "function": {
+            "name": "matomo-matomo_site_list",
+            "description": "Get Matomo site details",
+            "parameters": input_schema,
+        },
+    }