diff --git a/aio/tools/ng-packages-installer/index.js b/aio/tools/ng-packages-installer/index.js
index 2146dded56..c5e93da4e4 100644
--- a/aio/tools/ng-packages-installer/index.js
+++ b/aio/tools/ng-packages-installer/index.js
@@ -70,8 +70,12 @@ class NgPackagesInstaller {
   installLocalDependencies() {
     if (this.force || !this._checkLocalMarker()) {
       const pathToPackageConfig = path.resolve(this.projectDir, PACKAGE_JSON);
+      const packageConfigFile = fs.readFileSync(pathToPackageConfig, 'utf8');
+      const packageConfig = JSON.parse(packageConfigFile);
+
       const pathToLockfile = path.resolve(this.projectDir, YARN_LOCK);
       const parsedLockfile = this._parseLockfile(pathToLockfile);
+
       const packages = this._getDistPackages();
 
       try {
@@ -96,12 +100,12 @@ class NgPackagesInstaller {
             });
           });
 
+          // Overwrite the package's version to avoid version mismatch errors with the CLI.
+          this._overwritePackageVersion(key, tmpConfig, packageConfig, parsedLockfile);
+
           fs.writeFileSync(pkg.packageJsonPath, JSON.stringify(tmpConfig, null, 2));
         });
 
-        const packageConfigFile = fs.readFileSync(pathToPackageConfig, 'utf8');
-        const packageConfig = JSON.parse(packageConfigFile);
-
         const [dependencies, peers] = this._collectDependencies(packageConfig.dependencies || {}, packages);
         const [devDependencies, devPeers] = this._collectDependencies(packageConfig.devDependencies || {}, packages);
 
@@ -265,6 +269,35 @@ class NgPackagesInstaller {
     }
   }
 
+  /**
+   * Update a package's version with the fake version based on the package's original version in the projects's
+   * lockfile.
+   *
+   * **Background:**
+   * This helps avoid version mismatch errors with the CLI.
+   * Since the version set by bazel on the locally built packages is determined based on the latest tag for a commit on
+   * the current branch, it is often the case that this version is older than what the current `@angular/cli` version is
+   * compatible with (e.g. if the user has not fetched the latest tags from `angular/angular` or the branch has not been
+   * rebased recently.
+   *
+   * @param {string} packageName - The name of the package we are updating (e.g. `'@angular/core'`).
+   * @param {{[key: string]: any}} packageConfig - The package's parsed `package.json`.
+   * @param {{[key: string]: any}} projectConfig - The project's parsed `package.json`.
+   * @param {import('@yarnpkg/lockfile').LockFileObject} projectLockfile - The projects's parsed `yarn.lock`.
+   */
+  _overwritePackageVersion(packageName, packageConfig, projectConfig, projectLockfile) {
+    const originalVersionRange = (projectConfig.dependencies || {})[packageName] ||
+                                 (projectConfig.devDependencies || {})[packageName];
+    const originalVersion =
+      (projectLockfile[`${packageName}@${originalVersionRange}`] || {}).version;
+
+    if (originalVersion !== undefined) {
+      const newVersion = `${originalVersion}+locally-overwritten-by-ngPackagesInstaller`;
+      this._log(`Overwriting the version of '${packageName}': ${packageConfig.version} --> ${newVersion}`);
+      packageConfig.version = newVersion;
+    }
+  }
+
   /**
    * Extract the value for a boolean cli argument/option. When passing an option multiple times, `yargs` parses it as an
    * array of boolean values. In that case, we only care about the last occurrence.
diff --git a/aio/tools/ng-packages-installer/index.spec.js b/aio/tools/ng-packages-installer/index.spec.js
index f858e5e005..7511e86200 100644
--- a/aio/tools/ng-packages-installer/index.spec.js
+++ b/aio/tools/ng-packages-installer/index.spec.js
@@ -362,6 +362,82 @@ describe('NgPackagesInstaller', () => {
     });
   });
 
+  describe('_overwritePackageVersion()', () => {
+    it('should do nothing if the specified package is not a dependency', () => {
+      const pkgConfig = {name: '@scope/missing', version: 'local-version'};
+      const lockFile = {
+        [`${pkgConfig.name}@project-range`]: {version: 'project-version'},
+      };
+      let projectConfig;
+
+      // No `dependencies`/`devDependencies` at all.
+      projectConfig = {};
+      installer._overwritePackageVersion(pkgConfig.name, pkgConfig, projectConfig, lockFile);
+      expect(pkgConfig.version).toBe('local-version');
+
+      // Not listed in `dependencies`/`devDependencies`.
+      projectConfig = {
+        dependencies: {otherPackage: 'foo'},
+        devDependencies: {yetAnotherPackage: 'bar'},
+      };
+      installer._overwritePackageVersion(pkgConfig.name, pkgConfig, projectConfig, lockFile);
+      expect(pkgConfig.version).toBe('local-version');
+    });
+
+    it('should do nothing if the specified package cannot be found in the lockfile', () => {
+      const pkgConfig = {name: '@scope/missing', version: 'local-version'};
+      const projectConfig = {
+        dependencies: {[pkgConfig.name]: 'project-range'},
+      };
+      let lockFile;
+
+      // Package missing from lockfile.
+      lockFile = {
+        'otherPackage@someRange': {version: 'some-version'},
+      };
+      installer._overwritePackageVersion(pkgConfig.name, pkgConfig, projectConfig, lockFile);
+      expect(pkgConfig.version).toBe('local-version');
+
+      // Package present in lockfile, but for a different version range.
+      lockFile = {
+        [`${pkgConfig.name}@other-range`]: {version: 'project-version'},
+      };
+      installer._overwritePackageVersion(pkgConfig.name, pkgConfig, projectConfig, lockFile);
+      expect(pkgConfig.version).toBe('local-version');
+    });
+
+    it('should overwrite the package version if it is a dependency and found in the lockfile', () => {
+      const pkgConfig = {name: '@scope/found', version: 'local-version'};
+      const lockFile = {
+        [`${pkgConfig.name}@project-range-prod`]: {version: 'project-version-prod'},
+        [`${pkgConfig.name}@project-range-dev`]: {version: 'project-version-dev'},
+      };
+      let projectConfig;
+
+      // Package in `dependencies`.
+      projectConfig = {
+        dependencies: {[pkgConfig.name]: 'project-range-prod'},
+      };
+      installer._overwritePackageVersion(pkgConfig.name, pkgConfig, projectConfig, lockFile);
+      expect(pkgConfig.version).toBe('project-version-prod+locally-overwritten-by-ngPackagesInstaller');
+
+      // // Package in `devDependencies`.
+      projectConfig = {
+        devDependencies: {[pkgConfig.name]: 'project-range-dev'},
+      };
+      installer._overwritePackageVersion(pkgConfig.name, pkgConfig, projectConfig, lockFile);
+      expect(pkgConfig.version).toBe('project-version-dev+locally-overwritten-by-ngPackagesInstaller');
+
+      // // Package in both `dependencies` and `devDependencies` (the former takes precedence).
+      projectConfig = {
+        devDependencies: {[pkgConfig.name]: 'project-range-dev'},
+        dependencies: {[pkgConfig.name]: 'project-range-prod'},
+      };
+      installer._overwritePackageVersion(pkgConfig.name, pkgConfig, projectConfig, lockFile);
+      expect(pkgConfig.version).toBe('project-version-prod+locally-overwritten-by-ngPackagesInstaller');
+    });
+  });
+
   describe('_parseLockfile()', () => {
     let originalLockfileParseDescriptor;