diff --git a/src/snowflake/cli/_plugins/helpers/commands.py b/src/snowflake/cli/_plugins/helpers/commands.py
index d801347889..5034943297 100644
--- a/src/snowflake/cli/_plugins/helpers/commands.py
+++ b/src/snowflake/cli/_plugins/helpers/commands.py
@@ -16,6 +16,7 @@
 
 import typer
 import yaml
+from click import ClickException
 from snowflake.cli.api.commands.snow_typer import SnowTyperFactory
 from snowflake.cli.api.output.types import MessageResult
 from snowflake.cli.api.project.definition_conversion import (
@@ -35,10 +36,36 @@ def v1_to_v2(
     accept_templates: bool = typer.Option(
         False, "-t", "--accept-templates", help="Allows the migration of templates."
     ),
+    migrate_local_yml: (bool | None) = typer.Option(
+        None,
+        "-l",
+        "--migrate-local-overrides/--no-migrate-local-overrides",
+        help=(
+            "Merge values in snowflake.local.yml into the main project definition. "
+            "The snowflake.local.yml file will not be migrated, "
+            "instead its values will be reflected in the output snowflake.yml file. "
+            "If unset and snowflake.local.yml is present, an error will be raised."
+        ),
+        show_default=False,
+    ),
     **options,
 ):
     """Migrates the Snowpark, Streamlit, and Native App project definition files from V1 to V2."""
     manager = DefinitionManager()
+    local_yml_path = manager.project_root / "snowflake.local.yml"
+    has_local_yml = local_yml_path in manager.project_config_paths
+    if has_local_yml:
+        if migrate_local_yml is None:
+            raise ClickException(
+                "snowflake.local.yml file detected, "
+                "please specify --migrate-local-overrides to include "
+                "or --no-migrate-local-overrides to exclude its values."
+            )
+        if not migrate_local_yml:
+            # If we don't want the local file,
+            # remove it from the list of paths to load
+            manager.project_config_paths.remove(local_yml_path)
+
     pd = manager.unrendered_project_definition
 
     if pd.meets_version_requirement("2"):
@@ -49,6 +76,8 @@ def v1_to_v2(
     )
 
     SecurePath("snowflake.yml").rename("snowflake_V1.yml")
+    if has_local_yml:
+        SecurePath("snowflake.local.yml").rename("snowflake_V1.local.yml")
     with open("snowflake.yml", "w") as file:
         yaml.dump(
             pd_v2.model_dump(
diff --git a/src/snowflake/cli/api/project/definition_manager.py b/src/snowflake/cli/api/project/definition_manager.py
index 5fb6e707a2..329392a1e2 100644
--- a/src/snowflake/cli/api/project/definition_manager.py
+++ b/src/snowflake/cli/api/project/definition_manager.py
@@ -41,7 +41,7 @@ class DefinitionManager:
     USER_DEFINITION_FILENAME = "snowflake.local.yml"
 
     project_root: Path
-    _project_config_paths: List[Path]
+    project_config_paths: List[Path]
 
     def __init__(
         self,
@@ -53,12 +53,12 @@ def __init__(
         )
 
         self.project_root = project_root
-        self._project_config_paths = self._find_definition_files(self.project_root)
+        self.project_config_paths = self._find_definition_files(self.project_root)
         self._context_overrides = context_overrides
 
     @functools.cached_property
     def has_definition_file(self):
-        return len(self._project_config_paths) > 0
+        return len(self.project_config_paths) > 0
 
     @staticmethod
     def _find_definition_files(project_root: Path) -> List[Path]:
@@ -126,11 +126,11 @@ def _user_definition_file_if_available(project_path: Path) -> Optional[Path]:
 
     @functools.cached_property
     def _project_properties(self) -> ProjectProperties:
-        return load_project(self._project_config_paths, self._context_overrides)
+        return load_project(self.project_config_paths, self._context_overrides)
 
     @functools.cached_property
     def _raw_project_data(self) -> ProjectProperties:
-        return load_project(self._project_config_paths, {}, False)
+        return load_project(self.project_config_paths, {}, False)
 
     @functools.cached_property
     def project_definition(self) -> ProjectDefinitionV1:
diff --git a/tests/helpers/test_v1_to_v2.py b/tests/helpers/test_v1_to_v2.py
index 526cc79453..8eea0cb1a5 100644
--- a/tests/helpers/test_v1_to_v2.py
+++ b/tests/helpers/test_v1_to_v2.py
@@ -106,7 +106,7 @@ def test_if_template_raises_error_during_migrations(
 
 def test_migration_with_only_envs(project_directory, runner):
     with project_directory("sql_templating"):
-        result = runner.invoke(["helpers", "v1-to-v2"])
+        result = runner.invoke(["helpers", "v1-to-v2", "--no-migrate-local-overrides"])
 
     assert result.exit_code == 0
 
@@ -151,3 +151,30 @@ def test_migrating_a_file_with_duplicated_keys_raises_an_error(
         result = runner.invoke(["helpers", "v1-to-v2"])
     assert result.exit_code == 1, result.output
     assert result.output == os_agnostic_snapshot
+
+
+@pytest.mark.parametrize("migrate_local_yml", [True, False])
+def test_migrating_with_local_yml(
+    runner, project_directory, os_agnostic_snapshot, migrate_local_yml
+):
+    with project_directory("migration_local_yml"):
+        flag = (
+            "--migrate-local-overrides"
+            if migrate_local_yml
+            else "--no-migrate-local-overrides"
+        )
+        result = runner.invoke(["helpers", "v1-to-v2", flag])
+        assert result.exit_code == 0, result.output
+        assert Path("snowflake_V1.local.yml").exists()
+        with Path("snowflake.yml").open() as f:
+            pdf = yaml.safe_load(f)
+            assert pdf["env"]["foo"] == "bar_local" if migrate_local_yml else "bar"
+
+
+def test_migrating_with_local_yml_no_flag(
+    runner, project_directory, os_agnostic_snapshot
+):
+    with project_directory("migration_local_yml"):
+        result = runner.invoke(["helpers", "v1-to-v2"])
+        assert result.exit_code == 1, result.output
+        assert "please specify --migrate-local-overrides" in result.output
diff --git a/tests/project/test_definition_manager.py b/tests/project/test_definition_manager.py
index 3dc25e3ff9..b7cf23f29f 100644
--- a/tests/project/test_definition_manager.py
+++ b/tests/project/test_definition_manager.py
@@ -38,7 +38,7 @@ class DefinitionManagerTest(TestCase):
     def test_no_project_parameter_provided(self, mock_getcwd):
         with mock_is_file_for("/hello/world/snowflake.yml") as mock_is_file:
             definition_manager = DefinitionManager()
-            assert definition_manager._project_config_paths == [  # noqa: SLF001
+            assert definition_manager.project_config_paths == [
                 Path("/hello/world/snowflake.yml")
             ]
 
@@ -48,7 +48,7 @@ def test_finds_local_project_definition(self, mock_getcwd):
             "/hello/world/snowflake.yml", "/hello/world/snowflake.local.yml"
         ) as mock_is_file:
             definition_manager = DefinitionManager()
-            assert definition_manager._project_config_paths == [  # noqa: SLF001
+            assert definition_manager.project_config_paths == [
                 Path("/hello/world/snowflake.yml"),
                 Path("/hello/world/snowflake.local.yml"),
             ]
diff --git a/tests/test_data/projects/migration_local_yml/snowflake.local.yml b/tests/test_data/projects/migration_local_yml/snowflake.local.yml
new file mode 100644
index 0000000000..46936ab580
--- /dev/null
+++ b/tests/test_data/projects/migration_local_yml/snowflake.local.yml
@@ -0,0 +1,3 @@
+definition_version: 1.1
+env:
+  foo: bar_local
diff --git a/tests/test_data/projects/migration_local_yml/snowflake.yml b/tests/test_data/projects/migration_local_yml/snowflake.yml
new file mode 100644
index 0000000000..47aea24194
--- /dev/null
+++ b/tests/test_data/projects/migration_local_yml/snowflake.yml
@@ -0,0 +1,3 @@
+definition_version: 1.1
+env:
+  foo: bar