diff --git a/CHANGELOG.md b/CHANGELOG.md
index 6235f44298a..3061e3464b2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -87,6 +87,8 @@
   assigned to the wrong definition in the doc site.
 - Fixed a bug where the code blocks in the generated documentation's site would
   have a wrong indentation.
+- Fixed a bug where on windows local packages had absolute paths in the manifest
+  instead of relative.
 
 ### Language Server
 
diff --git a/compiler-cli/src/dependencies.rs b/compiler-cli/src/dependencies.rs
index 3269c71460f..1497978d7c1 100644
--- a/compiler-cli/src/dependencies.rs
+++ b/compiler-cli/src/dependencies.rs
@@ -724,7 +724,7 @@ fn resolve_versions<Telem: Telemetry>(
         &locked,
     )?;
 
-    // Convert the hex packages and local packages into manliest packages
+    // Convert the hex packages and local packages into manifest packages
     let manifest_packages = runtime.block_on(future::try_join_all(
         resolved
             .into_iter()
diff --git a/compiler-core/src/io.rs b/compiler-core/src/io.rs
index af349c38089..36927bceeae 100644
--- a/compiler-core/src/io.rs
+++ b/compiler-core/src/io.rs
@@ -16,6 +16,15 @@ use camino::{Utf8Path, Utf8PathBuf};
 /// The provided source path should be absolute, otherwise will panic.
 pub fn make_relative(source_path: &Utf8Path, target_path: &Utf8Path) -> Utf8PathBuf {
     assert!(source_path.is_absolute());
+    // Input target will always be canonicalised whereas source will not
+    // This causes problems with diffing on windows since canonicalised paths have a special root
+    // As such we are attempting to strip the target path
+    // Based on https://github.com/rust-lang/rust/issues/42869#issuecomment-1712317081
+    #[cfg(target_family = "windows")]
+    let binding = target_path.to_string();
+    #[cfg(target_family = "windows")]
+    let target_path = Utf8Path::new(binding.trim_start_matches(r"\\?\"));
+
     match target_path.is_absolute() {
         true => pathdiff::diff_utf8_paths(target_path, source_path)
             .expect("Should not fail on two absolute paths"),
diff --git a/compiler-core/src/manifest.rs b/compiler-core/src/manifest.rs
index f6a354a60c6..d0b9f2336b1 100644
--- a/compiler-core/src/manifest.rs
+++ b/compiler-core/src/manifest.rs
@@ -214,6 +214,9 @@ mod tests {
     #[cfg(windows)]
     const PACKAGE: &'static str = "C:\\home\\louis\\packages\\path\\to\\package";
 
+    #[cfg(windows)]
+    const PACKAGE_WITH_UNC: &'static str = "\\\\?\\C:\\home\\louis\\packages\\path\\to\\package";
+
     #[cfg(not(windows))]
     const HOME: &str = "/home/louis/packages/some_folder";
 
@@ -318,6 +321,116 @@ packages = [
   { name = "zzz", version = "0.4.0", build_tools = ["mix"], requirements = [], source = "hex", outer_checksum = "0316" },
 ]
 
+[requirements]
+aaa = { version = "> 0.0.0" }
+awsome_local1 = { path = "../path/to/package" }
+awsome_local2 = { git = "https://github.com/gleam-lang/gleam.git" }
+gleam_stdlib = { version = "~> 0.17" }
+gleeunit = { version = "~> 0.1" }
+zzz = { version = "> 0.0.0" }
+"#
+        );
+    }
+
+    #[cfg(windows)]
+    #[test]
+    fn manifest_toml_format_with_unc() {
+        let manifest = Manifest {
+            requirements: [
+                ("zzz".into(), Requirement::hex("> 0.0.0")),
+                ("aaa".into(), Requirement::hex("> 0.0.0")),
+                (
+                    "awsome_local2".into(),
+                    Requirement::git("https://github.com/gleam-lang/gleam.git"),
+                ),
+                (
+                    "awsome_local1".into(),
+                    Requirement::path("../path/to/package"),
+                ),
+                ("gleam_stdlib".into(), Requirement::hex("~> 0.17")),
+                ("gleeunit".into(), Requirement::hex("~> 0.1")),
+            ]
+            .into(),
+            packages: vec![
+                ManifestPackage {
+                    name: "gleam_stdlib".into(),
+                    version: Version::new(0, 17, 1),
+                    build_tools: ["gleam".into()].into(),
+                    otp_app: None,
+                    requirements: vec![],
+                    source: ManifestPackageSource::Hex {
+                        outer_checksum: Base16Checksum(vec![1, 22]),
+                    },
+                },
+                ManifestPackage {
+                    name: "aaa".into(),
+                    version: Version::new(0, 4, 0),
+                    build_tools: ["rebar3".into(), "make".into()].into(),
+                    otp_app: Some("aaa_app".into()),
+                    requirements: vec!["zzz".into(), "gleam_stdlib".into()],
+                    source: ManifestPackageSource::Hex {
+                        outer_checksum: Base16Checksum(vec![3, 22]),
+                    },
+                },
+                ManifestPackage {
+                    name: "zzz".into(),
+                    version: Version::new(0, 4, 0),
+                    build_tools: ["mix".into()].into(),
+                    otp_app: None,
+                    requirements: vec![],
+                    source: ManifestPackageSource::Hex {
+                        outer_checksum: Base16Checksum(vec![3, 22]),
+                    },
+                },
+                ManifestPackage {
+                    name: "awsome_local2".into(),
+                    version: Version::new(1, 2, 3),
+                    build_tools: ["gleam".into()].into(),
+                    otp_app: None,
+                    requirements: vec![],
+                    source: ManifestPackageSource::Git {
+                        repo: "https://github.com/gleam-lang/gleam.git".into(),
+                        commit: "bd9fe02f72250e6a136967917bcb1bdccaffa3c8".into(),
+                    },
+                },
+                ManifestPackage {
+                    name: "awsome_local1".into(),
+                    version: Version::new(1, 2, 3),
+                    build_tools: ["gleam".into()].into(),
+                    otp_app: None,
+                    requirements: vec![],
+                    source: ManifestPackageSource::Local {
+                        path: PACKAGE_WITH_UNC.into(),
+                    },
+                },
+                ManifestPackage {
+                    name: "gleeunit".into(),
+                    version: Version::new(0, 4, 0),
+                    build_tools: ["gleam".into()].into(),
+                    otp_app: None,
+                    requirements: vec!["gleam_stdlib".into()],
+                    source: ManifestPackageSource::Hex {
+                        outer_checksum: Base16Checksum(vec![3, 46]),
+                    },
+                },
+            ],
+        };
+
+        let buffer = manifest.to_toml(HOME.into());
+        assert_eq!(
+            buffer,
+            r#"# This file was generated by Gleam
+# You typically do not need to edit this file
+
+packages = [
+  { name = "aaa", version = "0.4.0", build_tools = ["rebar3", "make"], requirements = ["gleam_stdlib", "zzz"], otp_app = "aaa_app", source = "hex", outer_checksum = "0316" },
+  { name = "awsome_local1", version = "1.2.3", build_tools = ["gleam"], requirements = [], source = "local", path = "../path/to/package" },
+  { name = "awsome_local2", version = "1.2.3", build_tools = ["gleam"], requirements = [], source = "git", repo = "https://github.com/gleam-lang/gleam.git", commit = "bd9fe02f72250e6a136967917bcb1bdccaffa3c8" },
+  { name = "gleam_stdlib", version = "0.17.1", build_tools = ["gleam"], requirements = [], source = "hex", outer_checksum = "0116" },
+  { name = "gleeunit", version = "0.4.0", build_tools = ["gleam"], requirements = ["gleam_stdlib"], source = "hex", outer_checksum = "032E" },
+  { name = "zzz", version = "0.4.0", build_tools = ["mix"], requirements = [], source = "hex", outer_checksum = "0316" },
+]
+
 [requirements]
 aaa = { version = "> 0.0.0" }
 awsome_local1 = { path = "../path/to/package" }