diff --git a/docs/release-notes/release-notes-0.21.0.md b/docs/release-notes/release-notes-0.21.0.md
index 13e0484872..078765608e 100644
--- a/docs/release-notes/release-notes-0.21.0.md
+++ b/docs/release-notes/release-notes-0.21.0.md
@@ -45,12 +45,18 @@
   has been removed from the public key parsing methods, and proper mutex
   protection has been added to the cache access in `DisconnectBlockAtHeight`.
 
-- [Fixed TLV decoders to reject malformed records with incorrect lengths](https://github.com/lightningnetwork/lnd/pull/10249). 
+- [Fixed TLV decoders to reject malformed records with incorrect lengths](https://github.com/lightningnetwork/lnd/pull/10249).
   TLV decoders now strictly enforce fixed-length requirements for Fee (8 bytes),
   Musig2Nonce (66 bytes), ShortChannelID (8 bytes), Vertex (33 bytes), and
   DBytes33 (33 bytes) records, preventing malformed TLV data from being
   accepted.
 
+- [Fixed `MarkCoopBroadcasted` to correctly use the `local`
+  parameter](https://github.com/lightningnetwork/lnd/pull/10532). The method was
+  ignoring the `local` parameter and always marking cooperative close
+  transactions as locally initiated, even when they were initiated by the remote
+  peer.
+
 # New Features
 
 - Basic Support for [onion messaging forwarding](https://github.com/lightningnetwork/lnd/pull/9868) 
diff --git a/peer/chan_observer.go b/peer/chan_observer.go
index 7570bcf4bd..dcdc3c3cef 100644
--- a/peer/chan_observer.go
+++ b/peer/chan_observer.go
@@ -119,7 +119,12 @@ func (l *chanObserver) DisableOutgoingAdds() error {
 // MarkCoopBroadcasted persistently marks that the channel close transaction
 // has been broadcast.
 func (l *chanObserver) MarkCoopBroadcasted(tx *wire.MsgTx, local bool) error {
-	return l.chanView.MarkCoopBroadcasted(tx, lntypes.Local)
+	party := lntypes.Remote
+	if local {
+		party = lntypes.Local
+	}
+
+	return l.chanView.MarkCoopBroadcasted(tx, party)
 }
 
 // MarkShutdownSent persists the given ShutdownInfo. The existence of the