diff --git a/HISTORY.rst b/HISTORY.rst
index 489b9e26ac..f4907a691d 100644
--- a/HISTORY.rst
+++ b/HISTORY.rst
@@ -24,6 +24,7 @@ PlatformIO Core 5
     * `pio pkg uninstall <https://docs.platformio.org/en/latest/core/userguide/pkg/cmd_uninstall.html>`_ - uninstall the project dependencies or custom packages
     * `pio pkg update <https://docs.platformio.org/en/latest/core/userguide/pkg/cmd_update.html>`__ - update the project dependencies or custom packages
 
+  - Automatically install dependencies of the local (private) libraries (`issue #2910 <https://github.com/platformio/platformio-core/issues/2910>`_)
   - Added support for dependencies declared in a "tool" type package
   - Ignore files according to the patterns declared in ".gitignore" when using `pio package pack <https://docs.platformio.org/en/latest/core/userguide/pkg/cmd_pack.html>`__ command (`issue #4188 <https://github.com/platformio/platformio-core/issues/4188>`_)
   - Dropped automatic updates of global libraries and development platforms (`issue #4179 <https://github.com/platformio/platformio-core/issues/4179>`_)
diff --git a/platformio/package/commands/install.py b/platformio/package/commands/install.py
index c8e525b4e3..248a0b404e 100644
--- a/platformio/package/commands/install.py
+++ b/platformio/package/commands/install.py
@@ -216,6 +216,10 @@ def _install_project_env_libraries(project_env, options):
             skip_dependencies=options.get("skip_dependencies"),
             force=options.get("force"),
         )
+    # install dependencies from the priate libraries
+    plm = LibraryPackageManager(os.path.join(config.get("platformio", "lib_dir")))
+    for pkg in plm.get_installed():
+        lm.install_dependencies(pkg, print_header=False)
     return not already_up_to_date
 
 
diff --git a/tests/commands/pkg/test_install.py b/tests/commands/pkg/test_install.py
index e539dba368..3a2a1af8a0 100644
--- a/tests/commands/pkg/test_install.py
+++ b/tests/commands/pkg/test_install.py
@@ -196,6 +196,48 @@ def test_project(clirunner, validate_cliresult, isolated_pio_core, tmp_path):
     assert "Already up-to-date" in result.output
 
 
+def test_private_lib_deps(clirunner, validate_cliresult, isolated_pio_core, tmp_path):
+    project_dir = tmp_path / "project"
+    private_lib_dir = project_dir / "lib" / "private"
+    private_lib_dir.mkdir(parents=True)
+    (private_lib_dir / "library.json").write_text(
+        """
+{
+    "name": "My Private Lib",
+    "version": "1.0.0",
+    "dependencies": {
+        "bblanchon/ArduinoJson": "^6.19.2",
+        "milesburton/DallasTemperature": "^3.9.1"
+    }
+}
+"""
+    )
+    (project_dir / "platformio.ini").write_text(
+        """
+[env:private]
+platform = native
+"""
+    )
+    with fs.cd(str(project_dir)):
+        result = clirunner.invoke(package_install_cmd)
+        validate_cliresult(result)
+        config = ProjectConfig()
+        installed_lib_pkgs = LibraryPackageManager(
+            os.path.join(config.get("platformio", "lib_dir"))
+        ).get_installed()
+        assert pkgs_to_specs(installed_lib_pkgs) == [
+            PackageSpec("My Private Lib@1.0.0")
+        ]
+        installed_libdeps_pkgs = LibraryPackageManager(
+            os.path.join(config.get("platformio", "libdeps_dir"), "private")
+        ).get_installed()
+        assert pkgs_to_specs(installed_libdeps_pkgs) == [
+            PackageSpec("ArduinoJson@6.19.3"),
+            PackageSpec("DallasTemperature@3.9.1"),
+            PackageSpec("OneWire@2.3.6"),
+        ]
+
+
 def test_unknown_project_dependencies(
     clirunner, validate_cliresult, isolated_pio_core, tmp_path
 ):