Are you removing the peninsula and making it into an island? And, what do you mean by the "wall side"?

Maybe not in fashion right now, but a nicely trimmed post might work. Or, simply continue the drywall and trim to the end.

So you want to do away with the seating?

This is how we handled it, but this is all new cabinetry. They used cabinet doors on the side to cover where the 12" cabinets join the cabinets on the kitchen side of the peninsula. Beadboard would be a better choice than shiplap with the traditional style of your cabinets.

Those are cabinets on the back side. We hadn't added the pulls when this photo was taken.

Just to make sure I understand - are you saying you no longer want seating and you are going to add a cabinet instead?

He is going to put cabinets under the new lower counter and then " ... extending the island countertop 12" over the new cabinets." So it sounds like there will still be an overhang?

Can you afford to lose 12" on that side of the island?

Why not just make the cabinet ends the same as the cabinet ends on the pantry - then it would all tie-in. If you didn't want to extend them right to the end you could do some corner shelving for display purposes.

Thanks everyone. blfenton is correct, the island countertop would be extended 12" to overhang the new 12" deep cabinets. So the new island would still have an overhang for people to sit. Starting to think that it isn't worth the extra storage to give up 12" of space in the dining area. Might make the island feel like it is enroaching on the dining space. The island will still be plenty big by making it one level but same dimensions. Plus saves a bunch of money :) Thank you everyone!

Do you need island seating, at the sink, with the table right there? I'd go for the additional storage but no overhang.

If you did go ahead with the plan, would you then only be able to access this cabinet by pushing stools out of the way and ducking under the counter? It sounds like this isn't a great idea. Though I can 100% appreciate trying to get every inch out of your kitchen storage. Smart move to at least make the counter all one level.

Is this really needed, do you even have enough space to add the extra cabinets also how deep do you wants these cabinets and further more what does the working side looks like! IMO you would have to add an extra pony wall to match the other to have a seamless look.

If what you mean by not seeing the side of the cabinet the portion on the right, you can extend the drywall and baseboard to the corner and install your cabinets in the front section and the side will be hidden by drywall. Something like this. That entire section would now be counter height not at level shown which is the existing height.