diff --git a/README.md b/README.md
index 407631a..4ded287 100644
--- a/README.md
+++ b/README.md
@@ -260,6 +260,7 @@ Available options:
 Experimental commands:
   git                      Add a git dependency. Experimental.
   github                   Add a GitHub dependency
+  local                    Add a local dependency. Experimental.
 ```
 
 #### Update
diff --git a/default.nix b/default.nix
index 7633431..06dc489 100644
--- a/default.nix
+++ b/default.nix
@@ -35,6 +35,7 @@ with rec
     "^src/Niv$"
     "^src/Niv/Git$"
     "^src/Niv/GitHub$"
+    "^src/Niv/Local$"
     "^src/Niv/Sources$"
     "^src/Niv/Update$"
     "^src.*.hs$"
diff --git a/nix/sources.nix b/nix/sources.nix
index 45c97d1..7bd0f3e 100644
--- a/nix/sources.nix
+++ b/nix/sources.nix
@@ -26,6 +26,8 @@ let
   fetch_git = spec:
     builtins.fetchGit { url = spec.repo; inherit (spec) rev ref; };
 
+  fetch_local = spec: spec.path;
+
   fetch_builtin-tarball = name: throw
     ''[${name}] The niv type "builtin-tarball" is deprecated. You should instead use `builtin = true`.
         $ niv modify ${name} -a type=tarball -a builtin=true'';
@@ -65,6 +67,7 @@ let
     else if spec.type == "file" then fetch_file pkgs spec
     else if spec.type == "tarball" then fetch_tarball pkgs name spec
     else if spec.type == "git" then fetch_git spec
+    else if spec.type == "local" then fetch_local spec
     else if spec.type == "builtin-tarball" then fetch_builtin-tarball name
     else if spec.type == "builtin-url" then fetch_builtin-url name
     else
diff --git a/src/Niv/Cli.hs b/src/Niv/Cli.hs
index 9dbdf1e..e0e3f02 100644
--- a/src/Niv/Cli.hs
+++ b/src/Niv/Cli.hs
@@ -19,6 +19,7 @@ import Data.Text.Extended
 import Data.Version (showVersion)
 import Niv.Cmd
 import Niv.Git.Cmd
+import Niv.Local.Cmd
 import Niv.GitHub.Cmd
 import Niv.Logger
 import Niv.Sources
@@ -190,13 +191,16 @@ parseCmdAdd =
     parseCmd cmd = uncurry (cmdAdd (updateCmd cmd)) <$> (parseCmdArgs cmd)
     parseCmdAddGit =
       Opts.info (parseCmd gitCmd <**> Opts.helper) (description gitCmd)
+    parseCmdAddLocal =
+      Opts.info (parseCmd localCmd <**> Opts.helper) (description localCmd)
     parseCmdAddGitHub =
       Opts.info (parseCmd githubCmd <**> Opts.helper) (description githubCmd)
     parseCommands = Opts.subparser
         ( Opts.hidden <>
           Opts.commandGroup "Experimental commands:" <>
           Opts.command "git" parseCmdAddGit <>
-          Opts.command "github" parseCmdAddGitHub
+          Opts.command "github" parseCmdAddGitHub <>
+          Opts.command "local" parseCmdAddLocal
         )
 
 -- | only used in shortcuts (niv add foo/bar ...) because PACKAGE is NOT
@@ -341,6 +345,7 @@ cmdUpdate = \case
             -- github
             let cmd = case HMS.lookup "type" (unPackageSpec defaultSpec) of
                   Just "git" -> gitCmd
+                  Just "local" -> localCmd
                   _ -> githubCmd
             fmap attrsToSpec <$> li (tryEvalUpdate
               (specToLockedAttrs cliSpec <> specToFreeAttrs defaultSpec)
@@ -366,6 +371,7 @@ cmdUpdate = \case
           -- github
           let cmd = case HMS.lookup "type" (unPackageSpec defaultSpec) of
                 Just "git" -> gitCmd
+                Just "local" -> localCmd
                 _ -> githubCmd
           finalSpec <- fmap attrsToSpec <$> li (tryEvalUpdate
             initialSpec
diff --git a/src/Niv/Local/Cmd.hs b/src/Niv/Local/Cmd.hs
new file mode 100644
index 0000000..385c803
--- /dev/null
+++ b/src/Niv/Local/Cmd.hs
@@ -0,0 +1,59 @@
+{-# LANGUAGE LambdaCase #-}
+{-# LANGUAGE Arrows #-}
+{-# LANGUAGE OverloadedStrings #-}
+{-# LANGUAGE QuasiQuotes #-}
+{-# LANGUAGE ScopedTypeVariables #-}
+{-# LANGUAGE TupleSections #-}
+{-# LANGUAGE ViewPatterns #-}
+
+module Niv.Local.Cmd where
+
+import Niv.Cmd
+import Control.Arrow
+import Niv.Sources
+import Niv.Update
+import qualified Data.Aeson as Aeson
+import qualified Data.HashMap.Strict as HMS
+import qualified Data.Text as T
+import qualified Options.Applicative as Opts
+import qualified Options.Applicative.Help.Pretty as Opts
+
+localCmd :: Cmd
+localCmd = Cmd
+  { description = describeLocal
+  , parseCmdShortcut = parseLocalShortcut
+  , parsePackageSpec = parseLocalPackageSpec
+  , updateCmd = proc () -> do
+      useOrSet "type" -< ("local" :: Box T.Text)
+      returnA -< ()
+  , name = "local"
+  }
+
+parseLocalShortcut :: T.Text -> Maybe (PackageName, Aeson.Object)
+parseLocalShortcut txt =
+    if (T.isPrefixOf "./" txt || T.isPrefixOf "/" txt ) then do
+      let n = last $ T.splitOn "/" txt
+      Just (PackageName n, HMS.fromList [ ("path", Aeson.String txt) ])
+    else Nothing
+
+parseLocalPackageSpec :: Opts.Parser PackageSpec
+parseLocalPackageSpec = PackageSpec . HMS.fromList <$> parseParams
+  where
+    parseParams :: Opts.Parser [(T.Text, Aeson.Value)]
+    parseParams = maybe [] pure <$> Opts.optional parsePath
+
+    parsePath =
+      ("path", ) . Aeson.String <$> Opts.strOption
+        ( Opts.long "path" <>
+          Opts.metavar "PATH"
+        )
+
+describeLocal :: Opts.InfoMod a
+describeLocal = mconcat
+  [ Opts.fullDesc
+  , Opts.progDesc "Add a local dependency. Experimental."
+  , Opts.headerDoc $ Just $
+      "Examples:" Opts.<$$>
+      "" Opts.<$$>
+      "  niv add local ./foo/bar"
+  ]
diff --git a/src/Niv/Sources.hs b/src/Niv/Sources.hs
index 54757cd..dff9eaa 100644
--- a/src/Niv/Sources.hs
+++ b/src/Niv/Sources.hs
@@ -148,6 +148,8 @@ data SourcesNixVersion
   | V15
   | V16
   | V17
+  -- prettify derivation name
+  -- add 'local' type of sources
   | V18
   deriving stock (Bounded, Enum, Eq)
 
@@ -201,7 +203,7 @@ sourcesVersionToMD5 = \case
     V15 -> "dc11af910773ec9b4e505e0f49ebcfd2"
     V16 -> "2d93c52cab8e960e767a79af05ca572a"
     V17 -> "149b8907f7b08dc1c28164dfa55c7fad"
-    V18 -> "5fec8217a6e712c817f9de5289d85fbe"
+    V18 -> "bc5e6aefcaa6f9e0b2155ca4f44e5a33"
 
 -- | The MD5 sum of ./nix/sources.nix
 sourcesNixMD5 :: IO T.Text