diff --git a/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirSymbol.kt b/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirSymbol.kt
index 43899538bf2..74028a00535 100644
--- a/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirSymbol.kt
+++ b/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirSymbol.kt
@@ -106,14 +106,6 @@ internal tailrec fun FirDeclaration.ktSymbolOrigin(): KtSymbolOrigin = when (ori
 
 internal fun KtClassLikeSymbol.getSymbolKind(): KtSymbolKind {
     val firSymbol = firSymbol
-    if (firSymbol.isLocal) {
-        // TODO: hack should be dropped after KT-54390
-        when {
-            firSymbol is FirRegularClassSymbol && firSymbol.fir.containingClassForLocalAttr == null -> {
-                return KtSymbolKind.LOCAL
-            }
-        }
-    }
     return when {
         firSymbol.classId.isNestedClass -> KtSymbolKind.CLASS_MEMBER
         firSymbol.isLocal -> KtSymbolKind.LOCAL
diff --git a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFirTestdataTestGenerated.java b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFirTestdataTestGenerated.java
index 97b84f80305..f7f0865e415 100644
--- a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFirTestdataTestGenerated.java
+++ b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFirTestdataTestGenerated.java
@@ -524,6 +524,12 @@ public class DiagnosticCompilerTestFirTestdataTestGenerated extends AbstractDiag
             runTest("compiler/fir/analysis-tests/testData/resolve/problems2.kt");
         }
 
+        @Test
+        @TestMetadata("properLocalPackages.kt")
+        public void testProperLocalPackages() throws Exception {
+            runTest("compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt");
+        }
+
         @Test
         @TestMetadata("propertyFromJavaPlusAssign.kt")
         public void testPropertyFromJavaPlusAssign() throws Exception {
diff --git a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFirTestDataTestGenerated.java b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFirTestDataTestGenerated.java
index ba4d215fa57..4ba422623bd 100644
--- a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFirTestDataTestGenerated.java
+++ b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFirTestDataTestGenerated.java
@@ -524,6 +524,12 @@ public class LLFirPreresolvedReversedDiagnosticCompilerFirTestDataTestGenerated
             runTest("compiler/fir/analysis-tests/testData/resolve/problems2.kt");
         }
 
+        @Test
+        @TestMetadata("properLocalPackages.kt")
+        public void testProperLocalPackages() throws Exception {
+            runTest("compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt");
+        }
+
         @Test
         @TestMetadata("propertyFromJavaPlusAssign.kt")
         public void testPropertyFromJavaPlusAssign() throws Exception {
diff --git a/compiler/fir/analysis-tests/legacy-fir-tests/tests-gen/org/jetbrains/kotlin/fir/LazyBodyIsNotTouchedTestGenerated.java b/compiler/fir/analysis-tests/legacy-fir-tests/tests-gen/org/jetbrains/kotlin/fir/LazyBodyIsNotTouchedTestGenerated.java
index dc0d18ed2f0..db4ebefb5b9 100644
--- a/compiler/fir/analysis-tests/legacy-fir-tests/tests-gen/org/jetbrains/kotlin/fir/LazyBodyIsNotTouchedTestGenerated.java
+++ b/compiler/fir/analysis-tests/legacy-fir-tests/tests-gen/org/jetbrains/kotlin/fir/LazyBodyIsNotTouchedTestGenerated.java
@@ -444,6 +444,11 @@ public class LazyBodyIsNotTouchedTestGenerated extends AbstractLazyBodyIsNotTouc
         runTest("compiler/fir/analysis-tests/testData/resolve/problems2.kt");
     }
 
+    @TestMetadata("properLocalPackages.kt")
+    public void testProperLocalPackages() throws Exception {
+        runTest("compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt");
+    }
+
     @TestMetadata("propertyFromJavaPlusAssign.kt")
     public void testPropertyFromJavaPlusAssign() throws Exception {
         runTest("compiler/fir/analysis-tests/testData/resolve/propertyFromJavaPlusAssign.kt");
diff --git a/compiler/fir/analysis-tests/testData/resolve/properLocalPackages.fir.txt b/compiler/fir/analysis-tests/testData/resolve/properLocalPackages.fir.txt
new file mode 100644
index 00000000000..eaaae11b8e4
--- /dev/null
+++ b/compiler/fir/analysis-tests/testData/resolve/properLocalPackages.fir.txt
@@ -0,0 +1,57 @@
+FILE: properLocalPackages.kt
+    package a.b
+
+    public final class X : R|kotlin/Any| {
+        public constructor(): R|a/b/X| {
+            super<R|kotlin/Any|>()
+        }
+
+        public final fun foo(): R|kotlin/Unit| {
+            local final class U : R|kotlin/Any| {
+                public constructor(): R|<local>/U| {
+                    super<R|kotlin/Any|>()
+                }
+
+                local final inner class K : R|kotlin/Any| {
+                    public <local>/U.constructor(): R|<local>/U.K| {
+                        super<R|kotlin/Any|>()
+                    }
+
+                    local final inner class D : R|kotlin/Any| {
+                        public <local>/U.K.constructor(): R|<local>/U.K.D| {
+                            super<R|kotlin/Any|>()
+                        }
+
+                        public final fun check(): R|kotlin/Unit| {
+                            local final class F : R|kotlin/Any| {
+                                public constructor(): R|<local>/F| {
+                                    super<R|kotlin/Any|>()
+                                }
+
+                                local final inner class L : R|kotlin/Any| {
+                                    public <local>/F.constructor(): R|<local>/F.L| {
+                                        super<R|kotlin/Any|>()
+                                    }
+
+                                }
+
+                            }
+
+                        }
+
+                    }
+
+                }
+
+                local final class T : R|kotlin/Any| {
+                    public constructor(): R|<local>/U.T| {
+                        super<R|kotlin/Any|>()
+                    }
+
+                }
+
+            }
+
+        }
+
+    }
diff --git a/compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt b/compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt
new file mode 100644
index 00000000000..bbb1943c3e7
--- /dev/null
+++ b/compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt
@@ -0,0 +1,19 @@
+package a.b
+
+class X {
+    fun foo() {
+        class U {
+            inner class K {
+                inner class D {
+                    fun check() {
+                        class F {
+                            inner class L
+                        }
+                    }
+                }
+            }
+
+            <!NESTED_CLASS_NOT_ALLOWED!>class T<!>
+        }
+    }
+}
diff --git a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeDiagnosticsTestGenerated.java b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeDiagnosticsTestGenerated.java
index 9e09d925d19..c0d2081271b 100644
--- a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeDiagnosticsTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeDiagnosticsTestGenerated.java
@@ -524,6 +524,12 @@ public class FirLightTreeDiagnosticsTestGenerated extends AbstractFirLightTreeDi
             runTest("compiler/fir/analysis-tests/testData/resolve/problems2.kt");
         }
 
+        @Test
+        @TestMetadata("properLocalPackages.kt")
+        public void testProperLocalPackages() throws Exception {
+            runTest("compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt");
+        }
+
         @Test
         @TestMetadata("propertyFromJavaPlusAssign.kt")
         public void testPropertyFromJavaPlusAssign() throws Exception {
diff --git a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiDiagnosticTestGenerated.java b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiDiagnosticTestGenerated.java
index 3c31f3239e4..f0e96dd318b 100644
--- a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiDiagnosticTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiDiagnosticTestGenerated.java
@@ -524,6 +524,12 @@ public class FirPsiDiagnosticTestGenerated extends AbstractFirPsiDiagnosticTest
             runTest("compiler/fir/analysis-tests/testData/resolve/problems2.kt");
         }
 
+        @Test
+        @TestMetadata("properLocalPackages.kt")
+        public void testProperLocalPackages() throws Exception {
+            runTest("compiler/fir/analysis-tests/testData/resolve/properLocalPackages.kt");
+        }
+
         @Test
         @TestMetadata("propertyFromJavaPlusAssign.kt")
         public void testPropertyFromJavaPlusAssign() throws Exception {