diff --git a/cmd/resolve.go b/cmd/resolve.go
index 24b651f..2a52cde 100644
--- a/cmd/resolve.go
+++ b/cmd/resolve.go
@@ -2,10 +2,14 @@ package cmd
 
 import (
 	"fmt"
+	"maps"
 	"net/url"
+	"path/filepath"
+	"regexp"
 	"strings"
 
 	"github.com/Masterminds/semver/v3"
+	"github.com/apple/pkl-go/pkl"
 	"github.com/spf13/cobra"
 	"hpkl.io/hpkl/pkg/app"
 	"hpkl.io/hpkl/pkg/pklutils"
@@ -42,22 +46,37 @@ func NewResolveCmd(appConfig *app.AppConfig) *cobra.Command {
 	return cmd
 }
 
-func Resolve(appConfig *app.AppConfig) error {
-	resolver, err := app.NewResolver(appConfig)
-	sugar := appConfig.Logger.Sugar()
-	project := appConfig.Project()
+func CollectDependencies(dependecies *pkl.ProjectDependencies, include bool) map[string]app.Dependency {
+	result := make(map[string]app.Dependency)
 
-	deps := project.Dependencies()
+	for _, dep := range dependecies.LocalDependencies {
+		remote := dep.Dependencies.RemoteDependencies
 
-	sugar.Infow("got", "config", appConfig.Project())
+		for n, remoteDep := range remote {
+			result[remoteDep.PackageUri] = app.Dependency{Uri: remoteDep.PackageUri, Name: n, Include: false}
+		}
 
-	dependencies := make(map[string]app.Dependency, len(deps.RemoteDependencies))
+		for _, localDep := range dep.Dependencies.LocalDependencies {
+			inner := CollectDependencies(localDep.Dependencies, false)
+			maps.Copy(result, inner)
+		}
+	}
 
-	for n, d := range appConfig.Project().Dependencies().RemoteDependencies {
-		dependencies[n] = app.Dependency{Uri: d.PackageUri}
+	for n, dep := range dependecies.RemoteDependencies {
+		result[dep.PackageUri] = app.Dependency{Uri: dep.PackageUri, Name: n, Include: include}
 	}
 
-	resolvedDependencies, err := resolver.Resolve(dependencies)
+	return result
+}
+
+func Resolve(appConfig *app.AppConfig) error {
+	resolver, err := app.NewResolver(appConfig)
+	// sugar := appConfig.Logger.Sugar()
+	project := appConfig.Project()
+
+	remoteDependencies := CollectDependencies(project.Dependencies(), true)
+
+	resolvedDependencies, err := resolver.Resolve(remoteDependencies)
 
 	if err != nil {
 		return err
@@ -69,34 +88,71 @@ func Resolve(appConfig *app.AppConfig) error {
 		return err
 	}
 
+	dependencies := make(map[string]*pklutils.ResolvedDependency, len(resolvedDependencies)+len(project.Dependencies().LocalDependencies))
+
 	projectDeps := pklutils.ProjectDeps{
 		SchemaVersion:        1,
-		ResolvedDependencies: make(map[string]*pklutils.ResolvedDependency, len(resolvedDependencies)),
+		ResolvedDependencies: dependencies,
 	}
 
 	for depUri, dep := range resolvedDependencies {
+		if dep.Include {
+			baseUri, err := url.Parse(depUri)
+
+			if err != nil {
+				return err
+			}
+
+			mapUri := *baseUri
+			mapUri.Path = strings.Replace(mapUri.Path, fmt.Sprintf("@%s", dep.Version), "", 1)
 
-		baseUri, err := url.Parse(depUri)
+			baseUri.Scheme = "projectpackage"
+			versionParsed := semver.MustParse(dep.Version)
+			majorVersion := fmt.Sprintf("@%x", versionParsed.Major())
+			mapUri.Path += majorVersion
 
+			resolvedDependency := pklutils.ResolvedDependency{
+				DependencyType: "remote",
+				Uri:            baseUri.String(),
+				Checksums:      map[string]string{"sha256": dep.PackageZipChecksums.Sha256},
+			}
+
+			projectDeps.ResolvedDependencies[mapUri.String()] = &resolvedDependency
+		}
+	}
+
+	projectFileUri, err := url.Parse(project.ProjectFileUri)
+	projectFilePath := strings.Replace(projectFileUri.Path, "/PklProject", "", 1)
+
+	versionRegex := regexp.MustCompile("^(.*)\\@(\\d+)\\.\\d.\\d$")
+
+	for _, dep := range project.Dependencies().LocalDependencies {
+
+		projectUri, err := url.Parse(dep.PackageUri)
 		if err != nil {
 			return err
 		}
+		projectUri.Scheme = "projectpackage"
 
-		mapUri := *baseUri
-		mapUri.Path = strings.Replace(mapUri.Path, fmt.Sprintf("@%s", dep.Version), "", 1)
+		mapUri := versionRegex.ReplaceAllString(dep.PackageUri, "$1@$2")
 
-		baseUri.Scheme = "projectpackage"
-		versionParsed := semver.MustParse(dep.Version)
-		majorVersion := fmt.Sprintf("@%x", versionParsed.Major())
-		mapUri.Path += majorVersion
+		depProjectFileUri, err := url.Parse(dep.ProjectFileUri)
+		if err != nil {
+			return err
+		}
 
-		resolvedDependency := pklutils.ResolvedDependency{
-			DependencyType: "remote",
-			Uri:            baseUri.String(),
-			Checksums:      map[string]string{"sha256": dep.PackageZipChecksums.Sha256},
+		rel, err := filepath.Rel(projectFilePath, strings.Replace(depProjectFileUri.Path, "/PklProject", "", 1))
+
+		if err != nil {
+			return err
 		}
 
-		projectDeps.ResolvedDependencies[mapUri.String()] = &resolvedDependency
+		resolvedDependency := pklutils.ResolvedDependency{
+			DependencyType: "local",
+			Path:           rel,
+			Uri:            projectUri.String(),
+		}
+		projectDeps.ResolvedDependencies[mapUri] = &resolvedDependency
 	}
 
 	err = pklutils.PklWriteDeps(appConfig.WorkingDir, &projectDeps)
diff --git a/go.mod b/go.mod
index 25b17c4..07c12f8 100644
--- a/go.mod
+++ b/go.mod
@@ -4,7 +4,7 @@ go 1.22.3
 
 require (
 	github.com/Masterminds/semver/v3 v3.2.1
-	github.com/apple/pkl-go v0.7.0
+	github.com/apple/pkl-go v0.8.0
 	github.com/containerd/containerd v1.7.17
 	github.com/helmfile/vals v0.37.1
 	github.com/opencontainers/image-spec v1.1.0
diff --git a/go.sum b/go.sum
index 0cdf20d..7838b50 100644
--- a/go.sum
+++ b/go.sum
@@ -139,6 +139,8 @@ github.com/apple/pkl-go v0.6.0 h1:v7y9GqGanyUoa5NaYA/gjrlNblWY3g0F+5/5iheHR0o=
 github.com/apple/pkl-go v0.6.0/go.mod h1:xr5s9RAJdlEHU2efRenGiWkE0gssttQs0LE1HyBY2LQ=
 github.com/apple/pkl-go v0.7.0 h1:tn21SeH8QN/hdWsUg+ys/ItQem5WM9WuvjAwql3Gm14=
 github.com/apple/pkl-go v0.7.0/go.mod h1:5Hwil5tyZGrOekh7JXLZJvIAcGHb4gT19lnv4WEiKeI=
+github.com/apple/pkl-go v0.8.0 h1:GRcBvFWeXjT9rc7A5gHK89qrel2wGZ3/a7ge4rPlT5M=
+github.com/apple/pkl-go v0.8.0/go.mod h1:5Hwil5tyZGrOekh7JXLZJvIAcGHb4gT19lnv4WEiKeI=
 github.com/araddon/dateparse v0.0.0-20210429162001-6b43995a97de h1:FxWPpzIjnTlhPwqqXc4/vE0f7GvRjuAsbW+HOIe8KnA=
 github.com/araddon/dateparse v0.0.0-20210429162001-6b43995a97de/go.mod h1:DCaWoUhZrYW9p1lxo/cm8EmUOOzAPSEZNGF2DK1dJgw=
 github.com/armon/go-radix v0.0.0-20180808171621-7fddfc383310/go.mod h1:ufUuZ+zHj4x4TnLV4JWEpy2hxWSpsRywHrMgIH9cCH8=
diff --git a/pkg/app/resolver.go b/pkg/app/resolver.go
index 07b3bb9..87dcdf3 100644
--- a/pkg/app/resolver.go
+++ b/pkg/app/resolver.go
@@ -26,6 +26,8 @@ type (
 	Dependency struct {
 		Uri       string     `json:"uri"`
 		Checksums *Checksums `json:"checksums"`
+		Include   bool       `json:"include"`
+		Name      string     `json:"name"`
 	}
 
 	Metadata struct {
@@ -38,6 +40,7 @@ type (
 		Dependencies        map[string]Dependency `json:"dependencies"`
 		ResolverType        ResolverType          `json:"-"`
 		PlainHttp           bool                  `json:"-"`
+		Include             bool                  `json:"-"`
 	}
 
 	Resolver struct {
@@ -109,8 +112,9 @@ func (r *Resolver) Resolve(dependencies map[string]Dependency) (map[string]*Meta
 
 	logger := r.appConfig.Logger.Sugar()
 
-	for dependencyName, dependency := range dependencies {
+	for _, dependency := range dependencies {
 		metadata, ok := r.cache[dependency.Uri]
+		dependencyName := dependency.Name
 		if !ok {
 			var resolver DependencyResolver
 
@@ -125,6 +129,7 @@ func (r *Resolver) Resolve(dependencies map[string]Dependency) (map[string]*Meta
 			plain := strings.Contains(dependencyName, ".plain")
 
 			metadata, err := resolver.ResolveMetadata(dependency.Uri, plain)
+			metadata.Include = dependency.Include
 
 			if err != nil {
 				logger.Errorw("Metadata resolving error", "name", dependencyName, "value", dependency)
diff --git a/pkg/pklutils/deps.go b/pkg/pklutils/deps.go
index cd97de8..b81eef1 100644
--- a/pkg/pklutils/deps.go
+++ b/pkg/pklutils/deps.go
@@ -11,8 +11,9 @@ import (
 
 type ResolvedDependency struct {
 	DependencyType string            `json:"type"`
-	Uri            string            `json:"uri"`
-	Checksums      map[string]string `json:"checksums"`
+	Uri            string            `json:"uri,omitempty"`
+	Path           string            `json:"path,omitempty"`
+	Checksums      map[string]string `json:"checksums,omitempty"`
 }
 
 type ProjectDeps struct {