The mass movement to mainstreaming online learning by conventional higher education institutions worldwide during the current COVID-19 pandemic has led to an unavoidable need to focus on rethinking course design - especially in the area of assessment. The limitations and drawbacks of resisting a rethink and instead clinging to traditional assessment practices in these settings, is adding to important institutional tensions. Assessment dishonesty and security issues may be on the minds of some, while for others, an emphasis on information rather than process in teaching and learning practices. The latter is especially troubling, given the increased pressure on education stakeholders globally to recognize an emphasis on process as critical to promoting 21st century pedagogical approaches to learning. In light of these tensions, we report on a micro action research study in which, as part of the research design, a project-based summative assessment process was initiated over a 5-month semester with a group of Chilean pre-service teachers (PSTs). The inquiry was conducted from an ecological perspective of learning and framed by the notion of agency, both teacher's and learners. The steps and hurdles faced by both teacher educator (TE) and the PSTs as together they mediated deep changes to their assessment practices, are described. Ethnographic tools of observation, a reflective journal, group and individual interviews, field notes and transcripts of online classes were used in the data collection process. Importantly, both TE and many of the PSTs evidenced increased ability to let go of traditional, long-held, culturally ingrained pedagogical and assessment practices. At the same time, these PSTs demonstrated untypical engagement in and control of their learning. In the Chilean cultural context where the study took place, this dialectical change process represents a significant shift away from assessing for measurement and high-stakes accountability and towards assessing for learning (AfL) and actionability. We believe the study can offer important insights and hope for other stakeholders in the field of e-learning who are looking for new directions and practices to respond to the many unanswered assessment challenges in the new normal of learning entirely in virtual settings.