diff --git a/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanLoweringPhases.kt b/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanLoweringPhases.kt
index 3ebc0afa6db..f07796bd033 100644
--- a/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanLoweringPhases.kt
+++ b/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanLoweringPhases.kt
@@ -3,6 +3,9 @@ package org.jetbrains.kotlin.backend.konan
 import org.jetbrains.kotlin.backend.common.*
 import org.jetbrains.kotlin.backend.common.lower.*
 import org.jetbrains.kotlin.backend.common.lower.inline.FunctionInlining
+import org.jetbrains.kotlin.backend.common.lower.inline.LocalClassesExtractionFromInlineFunctionsLowering
+import org.jetbrains.kotlin.backend.common.lower.inline.LocalClassesInInlineFunctionsLowering
+import org.jetbrains.kotlin.backend.common.lower.inline.LocalClassesInInlineLambdasLowering
 import org.jetbrains.kotlin.backend.common.lower.loops.ForLoopsLowering
 import org.jetbrains.kotlin.backend.common.phaser.*
 import org.jetbrains.kotlin.backend.konan.lower.*
@@ -86,20 +89,57 @@ internal val arrayConstructorPhase = makeKonanModuleLoweringPhase(
         description = "Transform `Array(size) { index -> value }` into a loop"
 )
 
+internal val lateinitPhase = makeKonanModuleOpPhase(
+        { context, irModule ->
+            NullableFieldsForLateinitCreationLowering(context).lower(irModule)
+            NullableFieldsDeclarationLowering(context).lower(irModule)
+            LateinitUsageLowering(context).lower(irModule)
+        },
+        name = "Lateinit",
+        description = "Lateinit properties lowering"
+)
+
+internal val sharedVariablesPhase = makeKonanModuleLoweringPhase(
+        ::SharedVariablesLowering,
+        name = "SharedVariables",
+        description = "Shared variable lowering",
+        prerequisite = setOf(lateinitPhase)
+)
+
+internal val extractLocalClassesFromInlineBodies = namedIrModulePhase(
+        lower = object : SameTypeCompilerPhase<Context, IrModuleFragment> {
+            override fun invoke(phaseConfig: PhaseConfig, phaserState: PhaserState<IrModuleFragment>, context: Context, input: IrModuleFragment): IrModuleFragment {
+                LocalClassesInInlineLambdasLowering(context).run {
+                    input.files.forEach { lower(it) }
+                }
+                LocalClassesInInlineFunctionsLowering(context).run {
+                    input.files.forEach { lower(it) }
+                }
+                LocalClassesExtractionFromInlineFunctionsLowering(context).run {
+                    input.files.forEach { lower(it) }
+                }
+                return input
+            }
+        },
+        name = "ExtractLocalClassesFromInlineBodies",
+        description = "Extraction of local classes from inline bodies",
+        prerequisite = setOf(sharedVariablesPhase),
+        nlevels = 0,
+        actions = modulePhaseActions
+)
+
 internal val inlinePhase = namedIrModulePhase(
         lower = object : SameTypeCompilerPhase<Context, IrModuleFragment> {
             override fun invoke(phaseConfig: PhaseConfig, phaserState: PhaserState<IrModuleFragment>, context: Context, input: IrModuleFragment): IrModuleFragment {
                 FunctionInlining(context).run {
-                    input.files.forEach {
-                        lower(it)
-                    }
+                    input.files.forEach { lower(it) }
                 }
                 return input
             }
         },
         name = "Inline",
         description = "Functions inlining",
-        prerequisite = setOf(lowerBeforeInlinePhase, arrayConstructorPhase),
+        prerequisite = setOf(lowerBeforeInlinePhase, arrayConstructorPhase, extractLocalClassesFromInlineBodies),
         nlevels = 0,
         actions = modulePhaseActions
 )
@@ -116,17 +156,6 @@ internal val lowerAfterInlinePhase = makeKonanModuleOpPhase(
 
 /* IrFile phases */
 
-internal val lateinitPhase = makeKonanFileOpPhase(
-        { context, irFile ->
-            NullableFieldsForLateinitCreationLowering(context).lower(irFile)
-            NullableFieldsDeclarationLowering(context).lower(irFile)
-            LateinitUsageLowering(context).lower(irFile)
-        },
-        name = "Lateinit",
-        description = "Lateinit properties lowering",
-        prerequisite = setOf(inlinePhase)
-)
-
 // TODO make all lambda-related stuff work with IrFunctionExpression and drop this phase (see kotlin: dd3f8ecaacd)
 internal val provisionalFunctionExpressionPhase = makeKonanModuleLoweringPhase(
     { ProvisionalFunctionExpressionLowering() },
@@ -153,13 +182,6 @@ internal val initializersPhase = makeKonanFileLoweringPhase(
         prerequisite = setOf(enumConstructorsPhase)
 )
 
-internal val sharedVariablesPhase = makeKonanFileLoweringPhase(
-        ::SharedVariablesLowering,
-        name = "SharedVariables",
-        description = "Shared variable lowering",
-        prerequisite = setOf(initializersPhase)
-)
-
 internal val localFunctionsPhase = makeKonanFileOpPhase(
         op = { context, irFile ->
             LocalDelegatedPropertiesLowering().lower(irFile)
diff --git a/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/ToplevelPhases.kt b/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/ToplevelPhases.kt
index a520289f1b0..197b8f93ba0 100644
--- a/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/ToplevelPhases.kt
+++ b/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/ToplevelPhases.kt
@@ -326,18 +326,19 @@ internal val allLoweringsPhase = namedIrModulePhase(
                 stripTypeAliasDeclarationsPhase then
                 lowerBeforeInlinePhase then
                 arrayConstructorPhase then
+                lateinitPhase then
+                sharedVariablesPhase then
+                extractLocalClassesFromInlineBodies then
                 inlinePhase then
                 provisionalFunctionExpressionPhase then
                 lowerAfterInlinePhase then
                 performByIrFile(
                         name = "IrLowerByFile",
                         description = "IR Lowering by file",
-                        lower = lateinitPhase then
-                                forLoopsPhase then
+                        lower = forLoopsPhase then
                                 stringConcatenationPhase then
                                 enumConstructorsPhase then
                                 initializersPhase then
-                                sharedVariablesPhase then
                                 localFunctionsPhase then
                                 tailrecPhase then
                                 defaultParameterExtentPhase then