diff --git a/src/panels/config/backup/components/ha-backup-config-data.ts b/src/panels/config/backup/components/ha-backup-config-data.ts
index 699421d4b6..8af0ab046c 100644
--- a/src/panels/config/backup/components/ha-backup-config-data.ts
+++ b/src/panels/config/backup/components/ha-backup-config-data.ts
@@ -30,6 +30,7 @@ export type FormData = {
   database: boolean;
   media: boolean;
   share: boolean;
+  local_addons: boolean;
   addons_mode: "all" | "custom" | "none";
   addons: string[];
 };
@@ -39,6 +40,7 @@ const INITIAL_FORM_DATA: FormData = {
   database: false,
   media: false,
   share: false,
+  local_addons: false,
   addons_mode: "all",
   addons: [],
 };
@@ -51,9 +53,6 @@ export type BackupConfigData = {
   include_addons?: string[];
 };
 
-const SELF_CREATED_ADDONS_FOLDER = "addons/local";
-const SELF_CREATED_ADDONS_NAME = "___LOCAL_ADDONS___";
-
 @customElement("ha-backup-config-data")
 class HaBackupConfigData extends LitElement {
   @property({ attribute: false }) public hass!: HomeAssistant;
@@ -86,14 +85,11 @@ class HaBackupConfigData extends LitElement {
 
   private async _fetchAddons() {
     const { addons } = await fetchHassioAddonsInfo(this.hass);
-    this._addons = [
-      ...addons,
-      {
-        name: "Self created add-ons",
-        slug: SELF_CREATED_ADDONS_NAME,
-        iconPath: mdiFolder,
-      },
-    ];
+    this._addons = addons;
+  }
+
+  private _hasLocalAddons(addons: BackupAddonItem[]): boolean {
+    return addons.some((addon) => addon.slug === "local");
   }
 
   private _getData = memoizeOne(
@@ -104,21 +100,14 @@ class HaBackupConfigData extends LitElement {
 
       const config = value;
 
-      const hasLocalAddonFolder = config.include_folders?.includes(
-        SELF_CREATED_ADDONS_FOLDER
-      );
-
       const addons = config.include_addons?.slice() ?? [];
 
-      if (hasLocalAddonFolder && !value.include_all_addons) {
-        addons.push(SELF_CREATED_ADDONS_NAME);
-      }
-
       return {
         homeassistant: config.include_homeassistant || this.forceHomeAssistant,
         database: config.include_database,
         media: config.include_folders?.includes("media") || false,
         share: config.include_folders?.includes("share") || false,
+        local_addons: config.include_folders?.includes("addons/local") || false,
         addons_mode: config.include_all_addons
           ? "all"
           : addons.length > 0 || showAddon
@@ -130,21 +119,13 @@ class HaBackupConfigData extends LitElement {
   );
 
   private _setData(data: FormData) {
-    const hasSelfCreatedAddons = data.addons.includes(SELF_CREATED_ADDONS_NAME);
-
     const include_folders = [
       ...(data.media ? ["media"] : []),
       ...(data.share ? ["share"] : []),
+      ...(data.local_addons ? ["addons/local"] : []),
     ];
 
-    let include_addons = data.addons_mode === "custom" ? data.addons : [];
-
-    if (hasSelfCreatedAddons || data.addons_mode === "all") {
-      include_folders.push(SELF_CREATED_ADDONS_FOLDER);
-      include_addons = include_addons.filter(
-        (addon) => addon !== SELF_CREATED_ADDONS_NAME
-      );
-    }
+    const include_addons = data.addons_mode === "custom" ? data.addons : [];
 
     this.value = {
       include_homeassistant: data.homeassistant || this.forceHomeAssistant,
@@ -234,6 +215,26 @@ class HaBackupConfigData extends LitElement {
                 ></ha-switch>
               </ha-md-list-item>
 
+              ${this._hasLocalAddons(this._addons)
+                ? html`
+                    <ha-md-list-item>
+                      <ha-svg-icon
+                        slot="start"
+                        .path=${mdiFolder}
+                      ></ha-svg-icon>
+                      <span slot="headline">Local addons folder</span>
+                      <span slot="supporting-text">
+                        Folder that contains the data of your local add-ons.
+                      </span>
+                      <ha-switch
+                        id="local_addons"
+                        slot="end"
+                        @change=${this._switchChanged}
+                        .checked=${data.local_addons}
+                      ></ha-switch>
+                    </ha-md-list-item>
+                  `
+                : nothing}
               ${this._addons.length
                 ? html`
                     <ha-md-list-item>
diff --git a/src/panels/config/backup/components/ha-backup-data-picker.ts b/src/panels/config/backup/components/ha-backup-data-picker.ts
index f2d27c7a81..9f98ca6267 100644
--- a/src/panels/config/backup/components/ha-backup-data-picker.ts
+++ b/src/panels/config/backup/components/ha-backup-data-picker.ts
@@ -31,9 +31,6 @@ type CheckBoxItem = {
   version?: string;
 };
 
-const SELF_CREATED_ADDONS_FOLDER = "addons/local";
-const SELF_CREATED_ADDONS_NAME = "___LOCAL_ADDONS___";
-
 const ITEM_ICONS = {
   config: mdiCog,
   database: mdiChartBox,
@@ -91,13 +88,9 @@ export class HaBackupDataPicker extends LitElement {
           id: "database",
         });
       }
-      // Filter out the local add-ons folder
-      const folders = data.folders.filter(
-        (folder) => folder !== SELF_CREATED_ADDONS_FOLDER
-      );
       items.push(
-        ...folders.map<CheckBoxItem>((folder) => ({
-          label: capitalizeFirstLetter(folder),
+        ...data.folders.map<CheckBoxItem>((folder) => ({
+          label: this._localizeFolder(folder),
           id: folder,
         }))
       );
@@ -105,30 +98,25 @@ export class HaBackupDataPicker extends LitElement {
     }
   );
 
+  private _localizeFolder(folder: string): string {
+    if (folder === "addons/local") {
+      return "Local addons";
+    }
+    return capitalizeFirstLetter(folder);
+  }
+
   private _addonsItems = memoizeOne(
     (
       data: BackupData,
       _localize: LocalizeFunc,
       addonIcons: Record<string, boolean>
-    ) => {
-      const items = data.addons.map<BackupAddonItem>((addon) => ({
+    ) =>
+      data.addons.map<BackupAddonItem>((addon) => ({
         name: addon.name,
         slug: addon.slug,
         version: addon.version,
         icon: addonIcons[addon.slug],
-      }));
-
-      // Add local add-ons folder in addons items
-      if (data.folders.includes(SELF_CREATED_ADDONS_FOLDER)) {
-        items.push({
-          name: "Self created add-ons",
-          slug: SELF_CREATED_ADDONS_NAME,
-          iconPath: mdiFolder,
-        });
-      }
-
-      return items;
-    }
+      }))
   );
 
   private _parseValue = memoizeOne((value?: BackupData): SelectedItems => {
@@ -148,13 +136,9 @@ export class HaBackupDataPicker extends LitElement {
       homeassistant.push("database");
     }
 
-    let folders = [...value.folders];
-    const addonsList = value.addons.map((addon) => addon.slug);
-    if (folders.includes(SELF_CREATED_ADDONS_FOLDER)) {
-      folders = folders.filter((f) => f !== SELF_CREATED_ADDONS_FOLDER);
-      addonsList.push(SELF_CREATED_ADDONS_NAME);
-    }
+    const folders = value.folders;
     homeassistant.push(...folders);
+    const addonsList = value.addons.map((addon) => addon.slug);
     addons.push(...addonsList);
 
     return {
@@ -171,11 +155,8 @@ export class HaBackupDataPicker extends LitElement {
       addons: data.addons.filter((addon) =>
         selectedItems.addons.includes(addon.slug)
       ),
-      folders: data.folders.filter(
-        (folder) =>
-          selectedItems.homeassistant.includes(folder) ||
-          (selectedItems.addons.includes(folder) &&
-            folder === SELF_CREATED_ADDONS_FOLDER)
+      folders: data.folders.filter((folder) =>
+        selectedItems.homeassistant.includes(folder)
       ),
     })
   );