diff --git a/.changeset/witty-icons-rhyme.md b/.changeset/witty-icons-rhyme.md
new file mode 100644
index 00000000000..25d9cf3b1d3
--- /dev/null
+++ b/.changeset/witty-icons-rhyme.md
@@ -0,0 +1,5 @@
+---
+"chainlink": patch
+---
+
+offchain settlement fix #bugfix
diff --git a/contracts/.changeset/poor-panthers-build.md b/contracts/.changeset/poor-panthers-build.md
new file mode 100644
index 00000000000..2c21cae5d7a
--- /dev/null
+++ b/contracts/.changeset/poor-panthers-build.md
@@ -0,0 +1,5 @@
+---
+"@chainlink/contracts": patch
+---
+
+Offchain settlement fix #bugfix
diff --git a/contracts/src/v0.8/automation/dev/test/AutomationRegistry2_3.t.sol b/contracts/src/v0.8/automation/dev/test/AutomationRegistry2_3.t.sol
index 3e7e489379e..03138696436 100644
--- a/contracts/src/v0.8/automation/dev/test/AutomationRegistry2_3.t.sol
+++ b/contracts/src/v0.8/automation/dev/test/AutomationRegistry2_3.t.sol
@@ -940,6 +940,9 @@ contract NOPsSettlement is SetUp {
       assertEq(i, index);
       assertEq(0, balance);
     }
+
+    // after the offchain settlement, the total reserve amount of LINK should be 0
+    assertEq(registry.getReserveAmount(address(linkToken)), 0);
   }
 
   function testSettleNOPsOffchainForDeactivatedTransmittersSuccess() public {
@@ -1035,6 +1038,9 @@ contract NOPsSettlement is SetUp {
       assertEq(i, index);
       assertEq(0, balance);
     }
+
+    // after the offchain settlement, the total reserve amount of LINK should be 0
+    assertEq(registry.getReserveAmount(address(linkToken)), 0);
   }
 
   function testDisableOffchainPaymentsRevertDueToUnauthorizedCaller() public {
diff --git a/contracts/src/v0.8/automation/dev/v2_3/AutomationRegistryLogicC2_3.sol b/contracts/src/v0.8/automation/dev/v2_3/AutomationRegistryLogicC2_3.sol
index 92a9ca1a648..4048227f111 100644
--- a/contracts/src/v0.8/automation/dev/v2_3/AutomationRegistryLogicC2_3.sol
+++ b/contracts/src/v0.8/automation/dev/v2_3/AutomationRegistryLogicC2_3.sol
@@ -166,6 +166,7 @@ contract AutomationRegistryLogicC2_3 is AutomationRegistryBase2_3 {
     uint256 length = activeTransmittersLength + deactivatedTransmittersLength;
     uint256[] memory payments = new uint256[](length);
     address[] memory payees = new address[](length);
+
     for (uint256 i = 0; i < activeTransmittersLength; i++) {
       address transmitterAddr = s_transmittersList[i];
       uint96 balance = _updateTransmitterBalanceFromPool(
@@ -173,18 +174,24 @@ contract AutomationRegistryLogicC2_3 is AutomationRegistryBase2_3 {
         s_hotVars.totalPremium,
         uint96(activeTransmittersLength)
       );
+
       payments[i] = balance;
       payees[i] = s_transmitterPayees[transmitterAddr];
       s_transmitters[transmitterAddr].balance = 0;
     }
+
     for (uint256 i = 0; i < deactivatedTransmittersLength; i++) {
       address deactivatedAddr = s_deactivatedTransmitters.at(i);
       Transmitter memory transmitter = s_transmitters[deactivatedAddr];
+
       payees[i + activeTransmittersLength] = s_transmitterPayees[deactivatedAddr];
       payments[i + activeTransmittersLength] = transmitter.balance;
       s_transmitters[deactivatedAddr].balance = 0;
     }
 
+    // reserve amount of LINK is reset to 0 since no user deposits of LINK are expected in offchain mode
+    s_reserveAmounts[IERC20(address(i_link))] = 0;
+
     for (uint256 idx = s_deactivatedTransmitters.length(); idx > 0; idx--) {
       s_deactivatedTransmitters.remove(s_deactivatedTransmitters.at(idx - 1));
     }