diff --git a/packages/db-mongodb/src/utilities/transform.ts b/packages/db-mongodb/src/utilities/transform.ts
index 19984f041..42126aedd 100644
--- a/packages/db-mongodb/src/utilities/transform.ts
+++ b/packages/db-mongodb/src/utilities/transform.ts
@@ -460,7 +460,12 @@ export const transform = ({
     data.globalType = globalSlug
   }
 
-  const sanitize: TraverseFieldsCallback = ({ field, parentPath, ref: incomingRef }) => {
+  const sanitize: TraverseFieldsCallback = ({
+    field,
+    parentIsLocalized,
+    parentPath,
+    ref: incomingRef,
+  }) => {
     if (!incomingRef || typeof incomingRef !== 'object') {
       return
     }
diff --git a/packages/payload/src/utilities/traverseFields.ts b/packages/payload/src/utilities/traverseFields.ts
index 766accef3..bec49dd83 100644
--- a/packages/payload/src/utilities/traverseFields.ts
+++ b/packages/payload/src/utilities/traverseFields.ts
@@ -412,7 +412,7 @@ export const traverseFields = ({
         if (
           fieldShouldBeLocalized({
             field,
-            parentIsLocalized: parentIsLocalized ?? field.localized ?? false,
+            parentIsLocalized: parentIsLocalized ?? false,
           })
         ) {
           if (Array.isArray(currentRef)) {
diff --git a/test/versions/collections/Localized.ts b/test/versions/collections/Localized.ts
index 5653957a5..ad4d7bb67 100644
--- a/test/versions/collections/Localized.ts
+++ b/test/versions/collections/Localized.ts
@@ -18,6 +18,30 @@ const LocalizedPosts: CollectionConfig = {
       type: 'text',
       localized: true,
     },
+    {
+      name: 'blocks',
+      type: 'blocks',
+      blocks: [
+        {
+          slug: 'block',
+          fields: [
+            {
+              name: 'array',
+              type: 'array',
+              localized: true,
+              fields: [
+                {
+                  name: 'relationship',
+                  type: 'relationship',
+                  relationTo: 'posts',
+                  localized: true,
+                },
+              ],
+            },
+          ],
+        },
+      ],
+    },
   ],
 }
 
diff --git a/test/versions/int.spec.ts b/test/versions/int.spec.ts
index f48ccca37..6b853e08f 100644
--- a/test/versions/int.spec.ts
+++ b/test/versions/int.spec.ts
@@ -365,6 +365,37 @@ describe('Versions', () => {
         // When creating new version - updatedAt should match version.updatedAt
         expect(fromNonVersionsTable.updatedAt).toBe(latestVersionData.version.updatedAt)
       })
+
+      it('should allow to create with a localized relationships inside a localized array and a block', async () => {
+        const post = await payload.create({ collection: 'posts', data: {} })
+        global.d = true
+        const res = await payload.create({
+          collection: 'localized-posts',
+          draft: true,
+          depth: 0,
+          data: {
+            blocks: [
+              {
+                blockType: 'block',
+                array: [
+                  {
+                    relationship: post.id,
+                  },
+                ],
+              },
+            ],
+          },
+        })
+        expect(res.blocks[0]?.array[0]?.relationship).toEqual(post.id)
+        const {
+          docs: [resFromVersions],
+        } = await payload.findVersions({
+          collection: 'localized-posts',
+          where: { parent: { equals: res.id } },
+          depth: 0,
+        })
+        expect(resFromVersions?.version.blocks[0]?.array[0]?.relationship).toEqual(post.id)
+      })
     })
 
     describe('Restore', () => {
diff --git a/test/versions/payload-types.ts b/test/versions/payload-types.ts
index df501ec2d..85a865483 100644
--- a/test/versions/payload-types.ts
+++ b/test/versions/payload-types.ts
@@ -360,6 +360,19 @@ export interface LocalizedPost {
   id: string;
   text?: string | null;
   description?: string | null;
+  blocks?:
+    | {
+        array?:
+          | {
+              relationship?: (string | null) | Post;
+              id?: string | null;
+            }[]
+          | null;
+        id?: string | null;
+        blockName?: string | null;
+        blockType: 'block';
+      }[]
+    | null;
   updatedAt: string;
   createdAt: string;
   _status?: ('draft' | 'published') | null;
@@ -968,6 +981,22 @@ export interface ErrorOnUnpublishSelect<T extends boolean = true> {
 export interface LocalizedPostsSelect<T extends boolean = true> {
   text?: T;
   description?: T;
+  blocks?:
+    | T
+    | {
+        block?:
+          | T
+          | {
+              array?:
+                | T
+                | {
+                    relationship?: T;
+                    id?: T;
+                  };
+              id?: T;
+              blockName?: T;
+            };
+      };
   updatedAt?: T;
   createdAt?: T;
   _status?: T;