diff --git a/tests/Makefile.am.inc b/tests/Makefile.am.inc
index 085d0db0..8cd31ae6 100644
--- a/tests/Makefile.am.inc
+++ b/tests/Makefile.am.inc
@@ -89,6 +89,7 @@ dist_test_scripts = \
 	tests/test-builder-python.sh \
 	tests/test-builder-cleanup.sh \
 	tests/test-builder-licence-paths.sh \
+	tests/test-builder-locale-migration.sh \
 	$(NULL)
 
 @VALGRIND_CHECK_RULES@
diff --git a/tests/meson.build b/tests/meson.build
index 88a82dc6..aec77d17 100644
--- a/tests/meson.build
+++ b/tests/meson.build
@@ -13,6 +13,7 @@ test_names = [
   'test-builder-python',
   'test-builder-cleanup',
   'test-builder-licence-paths',
+  'test-builder-locale-migration',
 ]
 
 tap_test = find_program(
diff --git a/tests/test-builder-locale-migration.sh b/tests/test-builder-locale-migration.sh
new file mode 100755
index 00000000..d832df15
--- /dev/null
+++ b/tests/test-builder-locale-migration.sh
@@ -0,0 +1,186 @@
+#!/bin/bash
+#
+# Copyright (C) 2026 Boudhayan Bhattacharya <bbhtt@bbhtt.in>
+#
+# This library is free software; you can redistribute it and/or
+# modify it under the terms of the GNU Lesser General Public
+# License as published by the Free Software Foundation; either
+# version 2 of the License, or (at your option) any later version.
+#
+# This library is distributed in the hope that it will be useful,
+# but WITHOUT ANY WARRANTY; without even the implied warranty of
+# MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
+# Lesser General Public License for more details.
+#
+# You should have received a copy of the GNU Lesser General Public
+# License along with this library; if not, write to the
+# Free Software Foundation, Inc., 59 Temple Place - Suite 330,
+# Boston, MA 02111-1307, USA.
+
+set -euo pipefail
+
+. $(dirname $0)/libtest.sh
+
+skip_without_fuse
+
+echo "1..3"
+
+setup_repo
+install_repo
+setup_sdk_repo
+install_sdk_repo
+
+cd "$TEST_DATA_DIR"
+
+run_build () {
+    local manifest=$1
+    ${FLATPAK_BUILDER} --force-clean appdir "$manifest" >&2
+}
+
+cat > test-locale-migration.json <<'EOF'
+{
+    "app-id": "org.test.locale_migration",
+    "runtime": "org.test.Platform",
+    "sdk": "org.test.Sdk",
+    "modules": [{
+        "name": "test",
+        "buildsystem": "simple",
+        "build-commands": [
+            "mkdir -p /app/share/locale/de/LC_MESSAGES",
+            "echo 'de translation' > /app/share/locale/de/LC_MESSAGES/test.mo",
+            "mkdir -p /app/share/locale/C/LC_MESSAGES",
+            "echo 'C locale' > /app/share/locale/C/LC_MESSAGES/test.mo",
+            "mkdir -p /app/share/locale/en/LC_MESSAGES",
+            "echo 'en locale' > /app/share/locale/en/LC_MESSAGES/test.mo",
+            "mkdir -p /app/lib/locale/ru/LC_MESSAGES",
+            "echo 'ru translation' > /app/lib/locale/ru/LC_MESSAGES/test.mo",
+            "mkdir -p /app/share/locale/sr@latin/LC_MESSAGES",
+            "echo 'sr latin' > /app/share/locale/sr@latin/LC_MESSAGES/test.mo",
+            "mkdir -p /app/share/locale/pt_BR/LC_MESSAGES",
+            "echo 'pt_BR translation' > /app/share/locale/pt_BR/LC_MESSAGES/test.mo",
+            "mkdir -p /app/share/locale/de.utf8/LC_MESSAGES",
+            "echo 'de utf8' > /app/share/locale/de.utf8/LC_MESSAGES/test.mo",
+            "mkdir -p /app/share/locale/ko/LC_MESSAGES",
+            "echo 'app1' > /app/share/locale/ko/LC_MESSAGES/app1.mo",
+            "echo 'app2' > /app/share/locale/ko/LC_MESSAGES/app2.mo",
+            "mkdir -p /app/share/locale/es/LC_MESSAGES",
+            "echo 'es share' > /app/share/locale/es/LC_MESSAGES/test.mo",
+            "mkdir -p /app/lib/locale/es/LC_CTYPE",
+            "echo 'es lib' > /app/lib/locale/es/LC_CTYPE/test.mo",
+            "mkdir -p /app/share/locale/sv"
+        ]
+    }]
+}
+EOF
+
+run_build test-locale-migration.json
+
+# share/locale is migrated to share/runtime/locale/<lang>
+assert_has_symlink appdir/files/share/locale/de
+assert_symlink_has_content appdir/files/share/locale/de 'share/runtime/locale/de'
+assert_has_file appdir/files/share/runtime/locale/de/share/de/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/runtime/locale/de/share/de/LC_MESSAGES/test.mo 'de translation'
+
+# lib/locale is migrated to share/runtime/locale/<lang>
+assert_has_symlink appdir/files/lib/locale/ru
+assert_symlink_has_content appdir/files/lib/locale/ru 'share/runtime/locale/ru'
+assert_has_file appdir/files/share/runtime/locale/ru/lib/ru/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/runtime/locale/ru/lib/ru/LC_MESSAGES/test.mo 'ru translation'
+
+# C and en locales are not migrated
+assert_has_dir appdir/files/share/locale/C
+assert_has_file appdir/files/share/locale/C/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/locale/C/LC_MESSAGES/test.mo 'C locale'
+
+assert_has_dir appdir/files/share/locale/en
+assert_has_file appdir/files/share/locale/en/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/locale/en/LC_MESSAGES/test.mo 'en locale'
+
+# '@' stripped: sr@latin -> sr
+assert_has_symlink appdir/files/share/locale/sr@latin
+assert_has_file appdir/files/share/runtime/locale/sr/share/sr@latin/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/runtime/locale/sr/share/sr@latin/LC_MESSAGES/test.mo 'sr latin'
+
+# '_' stripped: pt_BR -> pt
+assert_has_symlink appdir/files/share/locale/pt_BR
+assert_symlink_has_content appdir/files/share/locale/pt_BR 'share/runtime/locale/pt'
+assert_has_file appdir/files/share/runtime/locale/pt/share/pt_BR/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/runtime/locale/pt/share/pt_BR/LC_MESSAGES/test.mo 'pt_BR translation'
+
+# '.' stripped: de.utf8 -> de
+assert_has_symlink appdir/files/share/locale/de.utf8
+assert_has_file appdir/files/share/runtime/locale/de/share/de.utf8/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/runtime/locale/de/share/de.utf8/LC_MESSAGES/test.mo 'de utf8'
+
+# multiple files in a single locale dir are migrated
+assert_has_symlink appdir/files/share/locale/ko
+assert_has_file appdir/files/share/runtime/locale/ko/share/ko/LC_MESSAGES/app1.mo
+assert_file_has_content appdir/files/share/runtime/locale/ko/share/ko/LC_MESSAGES/app1.mo 'app1'
+assert_has_file appdir/files/share/runtime/locale/ko/share/ko/LC_MESSAGES/app2.mo
+assert_file_has_content appdir/files/share/runtime/locale/ko/share/ko/LC_MESSAGES/app2.mo 'app2'
+
+# same language in share/locale and lib/locale is merged
+assert_has_symlink appdir/files/share/locale/es
+assert_has_file appdir/files/share/runtime/locale/es/share/es/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/runtime/locale/es/share/es/LC_MESSAGES/test.mo 'es share'
+assert_has_symlink appdir/files/lib/locale/es
+assert_has_file appdir/files/share/runtime/locale/es/lib/es/LC_CTYPE/test.mo
+assert_file_has_content appdir/files/share/runtime/locale/es/lib/es/LC_CTYPE/test.mo 'es lib'
+
+# empty locale dir creates empty migration dir
+assert_has_dir appdir/files/share/locale/sv
+assert_has_dir appdir/files/share/runtime/locale/sv
+
+echo "ok locale dirs migrated"
+
+
+cat > test-locale-disabled.json <<'EOF'
+{
+    "app-id": "org.test.locale_migration_disabled",
+    "runtime": "org.test.Platform",
+    "sdk": "org.test.Sdk",
+    "separate-locales": false,
+    "modules": [{
+        "name": "test",
+        "buildsystem": "simple",
+        "build-commands": [
+            "mkdir -p /app/share/locale/de/LC_MESSAGES",
+            "echo 'de translation' > /app/share/locale/de/LC_MESSAGES/test.mo"
+        ]
+    }]
+}
+EOF
+
+run_build test-locale-disabled.json
+
+assert_has_dir appdir/files/share/locale/de
+assert_has_file appdir/files/share/locale/de/LC_MESSAGES/test.mo
+assert_file_has_content appdir/files/share/locale/de/LC_MESSAGES/test.mo 'de translation'
+assert_not_has_dir appdir/files/share/runtime/locale
+
+echo "ok locale dirs migration is disabled on separate-locales false"
+
+cat > test-locale-migration-runtime.json <<'EOF'
+{
+    "app-id": "org.test.locale_migration_runtime",
+    "runtime": "org.test.Platform",
+    "sdk": "org.test.Sdk",
+    "build-runtime": true,
+    "modules": [{
+        "name": "test",
+        "buildsystem": "simple",
+        "build-commands": [
+            "mkdir -p /usr/share/locale/pl/LC_MESSAGES",
+            "echo 'pl translation' > /usr/share/locale/pl/LC_MESSAGES/test.mo"
+        ]
+    }]
+}
+EOF
+
+run_build test-locale-migration-runtime.json
+
+assert_has_symlink appdir/usr/share/locale/pl
+assert_has_file appdir/usr/share/runtime/locale/pl/share/pl/LC_MESSAGES/test.mo
+assert_file_has_content appdir/usr/share/runtime/locale/pl/share/pl/LC_MESSAGES/test.mo 'pl translation'
+
+echo "ok locale dirs migration works with runtime"