diff --git a/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirNamedClassOrObjectSymbol.kt b/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirNamedClassOrObjectSymbol.kt
index 5a4be216a96..b1b1d9cb0e3 100644
--- a/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirNamedClassOrObjectSymbol.kt
+++ b/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/symbols/KtFirNamedClassOrObjectSymbol.kt
@@ -27,8 +27,10 @@ import org.jetbrains.kotlin.analysis.low.level.api.fir.api.LLFirResolveSession
 import org.jetbrains.kotlin.descriptors.Modality
 import org.jetbrains.kotlin.descriptors.Visibilities
 import org.jetbrains.kotlin.descriptors.Visibility
+import org.jetbrains.kotlin.fir.declarations.FirClass
 import org.jetbrains.kotlin.fir.declarations.FirTypeParameter
 import org.jetbrains.kotlin.fir.declarations.utils.*
+import org.jetbrains.kotlin.fir.resolve.getContainingDeclaration
 import org.jetbrains.kotlin.fir.symbols.impl.FirRegularClassSymbol
 import org.jetbrains.kotlin.name.ClassId
 import org.jetbrains.kotlin.name.Name
@@ -44,7 +46,7 @@ internal class KtFirNamedClassOrObjectSymbol(
     override val name: Name get() = withValidityAssertion { firSymbol.name }
 
     override val classIdIfNonLocal: ClassId?
-        get() = withValidityAssertion { firSymbol.classId.takeUnless { it.isLocal } }
+        get() = withValidityAssertion { firSymbol.getClassIdIfNonLocal() }
 
     /* FirRegularClass modality is not modified by STATUS, so it can be taken from RAW */
     override val modality: Modality
@@ -102,6 +104,11 @@ internal class KtFirNamedClassOrObjectSymbol(
     override val symbolKind: KtSymbolKind
         get() = withValidityAssertion {
             when {
+                // TODO: hack should be dropped after KT-54390
+                firSymbol.isLocal && (firSymbol.fir.getContainingDeclaration(firResolveSession.useSiteFirSession) as? FirClass)?.let { clazz ->
+                    clazz.declarations.none { it === firSymbol.fir }
+                } == true -> KtSymbolKind.LOCAL
+
                 firSymbol.classId.isNestedClass -> KtSymbolKind.CLASS_MEMBER
                 firSymbol.isLocal -> KtSymbolKind.LOCAL
                 else -> KtSymbolKind.TOP_LEVEL
diff --git a/analysis/analysis-api/testData/symbols/symbolByPsi/outerAndInnerClasses.descriptors.txt b/analysis/analysis-api/testData/symbols/symbolByPsi/outerAndInnerClasses.descriptors.txt
deleted file mode 100644
index 814cc597b1e..00000000000
--- a/analysis/analysis-api/testData/symbols/symbolByPsi/outerAndInnerClasses.descriptors.txt
+++ /dev/null
@@ -1,269 +0,0 @@
-KtTypeParameterSymbol:
-  annotationsList: []
-  isReified: false
-  name: T
-  origin: SOURCE
-  typeParameters: []
-  upperBounds: [
-    kotlin/Any?
-  ]
-  variance: INVARIANT
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtTypeParameterSymbol:
-  annotationsList: []
-  isReified: false
-  name: T1
-  origin: SOURCE
-  typeParameters: []
-  upperBounds: [
-    kotlin/Any?
-  ]
-  variance: INVARIANT
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtNamedClassOrObjectSymbol:
-  annotationsList: []
-  classIdIfNonLocal: X.Y
-  classKind: CLASS
-  companionObject: null
-  contextReceivers: []
-  isData: false
-  isExternal: false
-  isFun: false
-  isInline: false
-  isInner: true
-  modality: FINAL
-  name: Y
-  origin: SOURCE
-  superTypes: [
-    kotlin/Any
-  ]
-  symbolKind: CLASS_MEMBER
-  typeParameters: [
-    KtTypeParameterSymbol(T1)
-  ]
-  visibility: Public
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtTypeParameterSymbol:
-  annotationsList: []
-  isReified: false
-  name: T2
-  origin: SOURCE
-  typeParameters: []
-  upperBounds: [
-    kotlin/Any?
-  ]
-  variance: INVARIANT
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtNamedClassOrObjectSymbol:
-  annotationsList: []
-  classIdIfNonLocal: X.Z
-  classKind: CLASS
-  companionObject: null
-  contextReceivers: []
-  isData: false
-  isExternal: false
-  isFun: false
-  isInline: false
-  isInner: false
-  modality: FINAL
-  name: Z
-  origin: SOURCE
-  superTypes: [
-    kotlin/Any
-  ]
-  symbolKind: CLASS_MEMBER
-  typeParameters: [
-    KtTypeParameterSymbol(T2)
-  ]
-  visibility: Public
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtTypeParameterSymbol:
-  annotationsList: []
-  isReified: false
-  name: T3
-  origin: SOURCE
-  typeParameters: []
-  upperBounds: [
-    kotlin/Any?
-  ]
-  variance: INVARIANT
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtTypeParameterSymbol:
-  annotationsList: []
-  isReified: false
-  name: T4
-  origin: SOURCE
-  typeParameters: []
-  upperBounds: [
-    kotlin/Any?
-  ]
-  variance: INVARIANT
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtTypeParameterSymbol:
-  annotationsList: []
-  isReified: false
-  name: T5
-  origin: SOURCE
-  typeParameters: []
-  upperBounds: [
-    kotlin/Any?
-  ]
-  variance: INVARIANT
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtNamedClassOrObjectSymbol:
-  annotationsList: []
-  classIdIfNonLocal: null
-  classKind: CLASS
-  companionObject: null
-  contextReceivers: []
-  isData: false
-  isExternal: false
-  isFun: false
-  isInline: false
-  isInner: true
-  modality: FINAL
-  name: K
-  origin: SOURCE
-  superTypes: [
-    kotlin/Any
-  ]
-  symbolKind: CLASS_MEMBER
-  typeParameters: [
-    KtTypeParameterSymbol(T5)
-  ]
-  visibility: Local
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtTypeParameterSymbol:
-  annotationsList: []
-  isReified: false
-  name: T6
-  origin: SOURCE
-  typeParameters: []
-  upperBounds: [
-    kotlin/Any?
-  ]
-  variance: INVARIANT
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtNamedClassOrObjectSymbol:
-  annotationsList: []
-  classIdIfNonLocal: null
-  classKind: CLASS
-  companionObject: null
-  contextReceivers: []
-  isData: false
-  isExternal: false
-  isFun: false
-  isInline: false
-  isInner: false
-  modality: FINAL
-  name: C
-  origin: SOURCE
-  superTypes: [
-    kotlin/Any
-  ]
-  symbolKind: CLASS_MEMBER
-  typeParameters: [
-    KtTypeParameterSymbol(T6)
-  ]
-  visibility: Local
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtNamedClassOrObjectSymbol:
-  annotationsList: []
-  classIdIfNonLocal: null
-  classKind: CLASS
-  companionObject: null
-  contextReceivers: []
-  isData: false
-  isExternal: false
-  isFun: false
-  isInline: false
-  isInner: false
-  modality: FINAL
-  name: U
-  origin: SOURCE
-  superTypes: [
-    kotlin/Any
-  ]
-  symbolKind: LOCAL
-  typeParameters: [
-    KtTypeParameterSymbol(T4)
-  ]
-  visibility: Local
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtFunctionSymbol:
-  annotationsList: []
-  callableIdIfNonLocal: /X.foo
-  contextReceivers: []
-  hasStableParameterNames: true
-  isBuiltinFunctionInvoke: false
-  isExtension: false
-  isExternal: false
-  isInfix: false
-  isInline: false
-  isOperator: false
-  isOverride: false
-  isStatic: false
-  isSuspend: false
-  modality: FINAL
-  name: foo
-  origin: SOURCE
-  receiverType: null
-  returnType: kotlin/Unit
-  symbolKind: CLASS_MEMBER
-  typeParameters: [
-    KtTypeParameterSymbol(T3)
-  ]
-  valueParameters: []
-  visibility: Public
-  getDispatchReceiver(): X<T>
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
-
-KtNamedClassOrObjectSymbol:
-  annotationsList: []
-  classIdIfNonLocal: X
-  classKind: CLASS
-  companionObject: null
-  contextReceivers: []
-  isData: false
-  isExternal: false
-  isFun: false
-  isInline: false
-  isInner: false
-  modality: FINAL
-  name: X
-  origin: SOURCE
-  superTypes: [
-    kotlin/Any
-  ]
-  symbolKind: TOP_LEVEL
-  typeParameters: [
-    KtTypeParameterSymbol(T)
-  ]
-  visibility: Public
-  getContainingModule: KtSourceModule "Sources of main"
-  deprecationStatus: null
\ No newline at end of file
diff --git a/analysis/analysis-api/testData/symbols/symbolByPsi/outerAndInnerClasses.txt b/analysis/analysis-api/testData/symbols/symbolByPsi/outerAndInnerClasses.txt
index 7b037693418..814cc597b1e 100644
--- a/analysis/analysis-api/testData/symbols/symbolByPsi/outerAndInnerClasses.txt
+++ b/analysis/analysis-api/testData/symbols/symbolByPsi/outerAndInnerClasses.txt
@@ -206,7 +206,7 @@ KtNamedClassOrObjectSymbol:
   superTypes: [
     kotlin/Any
   ]
-  symbolKind: CLASS_MEMBER
+  symbolKind: LOCAL
   typeParameters: [
     KtTypeParameterSymbol(T4)
   ]