diff --git a/packages/pnpm/src/cmd/link.ts b/packages/pnpm/src/cmd/link.ts
index b1f3ceeff9..691e9cda16 100644
--- a/packages/pnpm/src/cmd/link.ts
+++ b/packages/pnpm/src/cmd/link.ts
@@ -8,9 +8,10 @@ import {
   InstallOptions,
   link,
   linkToGlobal,
+  LocalPackages,
 } from 'supi'
 import { cached as createStoreController } from '../createStoreController'
-import findWorkspacePackages from '../findWorkspacePackages'
+import findWorkspacePackages, { arrayOfLocalPackagesToMap } from '../findWorkspacePackages'
 import getConfigs from '../getConfigs'
 import { PnpmOptions } from '../types'
 
@@ -23,9 +24,18 @@ export default async (
   const cwd = opts && opts.prefix || process.cwd()
 
   const storeControllerCache = new Map<string, Promise<{path: string, ctrl: StoreController}>>()
+  let workspacePackages
+  let localPackages!: LocalPackages
+  if (opts.linkWorkspacePackages && opts.workspacePrefix) {
+    workspacePackages = await findWorkspacePackages(opts.workspacePrefix)
+    localPackages = arrayOfLocalPackagesToMap(workspacePackages)
+  } else {
+    localPackages = {}
+  }
 
   const store = await createStoreController(storeControllerCache, opts)
   const linkOpts = Object.assign(opts, {
+    localPackages,
     store: store.path,
     storeController: store.ctrl,
   })
@@ -41,9 +51,9 @@ export default async (
   if (pkgNames.length) {
     let globalPkgNames!: string[]
     if (opts.workspacePrefix) {
-      const pkgs = await findWorkspacePackages(opts.workspacePrefix)
+      workspacePackages = await findWorkspacePackages(opts.workspacePrefix)
 
-      const pkgsFoundInWorkspace = pkgs.filter((pkg) => pkgNames.indexOf(pkg.manifest.name) !== -1)
+      const pkgsFoundInWorkspace = workspacePackages.filter((pkg) => pkgNames.indexOf(pkg.manifest.name) !== -1)
       pkgsFoundInWorkspace.forEach((pkgFromWorkspace) => pkgPaths.push(pkgFromWorkspace.path))
 
       if (pkgsFoundInWorkspace.length && !linkOpts.saveDev && !linkOpts.saveProd && !linkOpts.saveOptional) {
@@ -63,6 +73,7 @@ export default async (
       const s = await createStoreController(storeControllerCache, opts)
       await install({
         ...await getConfigs({ ...opts.cliArgs, prefix }, { excludeReporter: true }),
+        localPackages,
         store: s.path,
         storeController: s.ctrl,
       } as InstallOptions)
diff --git a/packages/pnpm/test/monorepo/index.ts b/packages/pnpm/test/monorepo/index.ts
index bf9e45dcec..5071ff4586 100644
--- a/packages/pnpm/test/monorepo/index.ts
+++ b/packages/pnpm/test/monorepo/index.ts
@@ -459,3 +459,30 @@ test('recursive installation with shared-workspace-shrinkwrap and a readPackage
 
   await projects['project-1'].hasNot('project-1')
 })
+
+test('local packages should be preferred when running "pnpm link" inside a workspace', async (t) => {
+  const projects = preparePackages(t, [
+    {
+      name: 'project-1',
+      version: '1.0.0',
+      dependencies: {
+        'is-positive': '1.0.0',
+      },
+    },
+    {
+      name: 'is-positive',
+      version: '1.0.0',
+    },
+  ])
+
+  await writeYamlFile('pnpm-workspace.yaml', { packages: ['**', '!store/**'] })
+  await fs.writeFile('.npmrc', 'link-workspace-packages = true', 'utf8')
+
+  process.chdir('project-1')
+
+  await execPnpm('link', '.')
+
+  const shr = await projects['project-1'].loadShrinkwrap()
+
+  t.equal(shr && shr.dependencies && shr.dependencies['is-positive'], 'link:../is-positive')
+})
diff --git a/packages/supi/src/index.ts b/packages/supi/src/index.ts
index 8c4c9761ae..4fd6efc5bb 100644
--- a/packages/supi/src/index.ts
+++ b/packages/supi/src/index.ts
@@ -41,6 +41,8 @@ export { UninstallOptions } from './uninstall/extendUninstallOptions'
 import * as packageRequesterLogs from '@pnpm/package-requester'
 import * as supiLogs from './loggers'
 
+export { LocalPackages } from '@pnpm/resolver-base'
+
 export type ProgressLog = ProgressLog | packageRequesterLogs.ProgressLog
 export type Log = supiLogs.Log
   | packageRequesterLogs.Log