@@ -1319,0 +1349,4 @@
+  const bool do_use_exisiting_liboverrides = (flags &
+                                              BKE_LIBLINK_OVERRIDE_USE_EXISTING_LIBOVERRIDES) != 0;
+
+  LinkNode *itemlink;

@@ -150,3 +154,3 @@
     "   :type relative: bool\n"
     "   :arg assets_only: If True, only list data-blocks marked as assets.\n"
-    "   :type assets_only: bool\n");
+    "   :type assets_only: bool\n"

@@ -151,2 +155,3 @@
     "   :arg assets_only: If True, only list data-blocks marked as assets.\n"
-    "   :type assets_only: bool\n");
+    "   :type assets_only: bool\n"
+    "   :arg create_liboverrides: If True, liboverrides will be created for linked data \n"

@@ -152,1 +156,3 @@
-    "   :type assets_only: bool\n");
+    "   :type assets_only: bool\n"
+    "   :arg create_liboverrides: If True, liboverrides will be created for linked data \n"
+    "                             (only valid when `link` is True).\n"

@@ -153,0 +157,4 @@
+    "   :arg create_liboverrides: If True, liboverrides will be created for linked data \n"
+    "                             (only valid when `link` is True).\n"
+    "   :type create_liboverrides: bool\n"
+    "   :arg reuse_liboverrides: If True and `create_liboverride` is True, \n"

@@ -153,0 +160,4 @@
+    "   :arg reuse_liboverrides: If True and `create_liboverride` is True, \n"
+    "                            search for existing liboverride first.\n"
+    "   :type reuse_liboverrides: bool\n"
+    "   :arg create_runtime: If True and `create_liboverride` is True, \n"

@@ -159,3 +172,1 @@
-  bool is_rel = false, is_link = false, use_assets_only = false;
-
-  static const char *_keywords[] = {"filepath", "link", "relative", "assets_only", NULL};
+  bool is_rel = false, is_link = false, use_assets_only = false, create_liboverrides = false,

@@ -162,0 +179,4 @@
+                                    "create_liboverrides",
+                                    "reuse_liboverrides",
+                                    "create_runtime",
+                                    NULL};

@@ -339,6 +377,8 @@ static bool bpy_lib_exit_lapp_context_items_cb(BlendfileLinkAppendContext *lapp_
   const int py_list_index = POINTER_AS_INT(
       BKE_blendfile_link_append_context_item_userdata_get(lapp_context, item));
   ID *new_id = BKE_blendfile_link_append_context_item_newid_get(lapp_context, item);
+  ID *liboverride_id = BKE_blendfile_link_append_context_item_liboverrideid_get(lapp_context,

@@ -552,0 +593,4 @@
+        assert len(bpy.data.collections) == 2  # The linked one and its local liboverride.
+
+        # Link + LibOverride, so linked data should have remained linked.
+        assert bpy.data.meshes[-1].library != None