diff --git a/msg/position_setpoint.msg b/msg/position_setpoint.msg
index fa3b40389d..c3ff1c095b 100644
--- a/msg/position_setpoint.msg
+++ b/msg/position_setpoint.msg
@@ -9,6 +9,9 @@ uint8 SETPOINT_TYPE_IDLE=5	# do nothing, switch off motors or keep at idle speed
 uint8 SETPOINT_TYPE_OFFBOARD=6 	# setpoint in NED frame (x, y, z, vx, vy, vz) set by offboard
 uint8 SETPOINT_TYPE_FOLLOW_TARGET=7  # setpoint in NED frame (x, y, z, vx, vy, vz) set by follow target
 
+uint8 VELOCITY_FRAME_LOCAL_NED = 1 # MAV_FRAME_LOCAL_NED
+uint8 VELOCITY_FRAME_BODY_NED = 8 # MAV_FRAME_BODY_NED
+
 bool valid			# true if setpoint is valid
 uint8 type			# setpoint type to adjust behavior of position controller
 float32 x			# local position setpoint in m in NED
@@ -19,6 +22,8 @@ float32 vx			# local velocity setpoint in m/s in NED
 float32 vy			# local velocity setpoint in m/s in NED
 float32 vz			# local velocity setpoint in m/s in NED
 bool velocity_valid		# true if local velocity setpoint valid
+uint8 velocity_frame		# to set velocity setpoints in NED or body
+
 bool alt_valid		# do not set for 3D position control. Set to true if you want z-position control while doing vx,vy velocity control.
 float64 lat			# latitude, in deg
 float64 lon			# longitude, in deg
diff --git a/src/modules/mavlink/mavlink_receiver.cpp b/src/modules/mavlink/mavlink_receiver.cpp
index c5636f70e0..5514bd5421 100644
--- a/src/modules/mavlink/mavlink_receiver.cpp
+++ b/src/modules/mavlink/mavlink_receiver.cpp
@@ -868,6 +868,8 @@ MavlinkReceiver::handle_message_set_position_target_local_ned(mavlink_message_t
 						pos_sp_triplet.current.vy = set_position_target_local_ned.vy;
 						pos_sp_triplet.current.vz = set_position_target_local_ned.vz;
 
+						pos_sp_triplet.current.velocity_frame =
+							set_position_target_local_ned.coordinate_frame;
 					} else {
 						pos_sp_triplet.current.velocity_valid = false;
 					}
diff --git a/src/modules/mc_pos_control/mc_pos_control_main.cpp b/src/modules/mc_pos_control/mc_pos_control_main.cpp
index daef95f8f5..b71a1bbf85 100644
--- a/src/modules/mc_pos_control/mc_pos_control_main.cpp
+++ b/src/modules/mc_pos_control/mc_pos_control_main.cpp
@@ -1222,12 +1222,24 @@ MulticopterPositionControl::control_offboard(float dt)
 					_hold_offboard_xy = true;
 				}
 
-				_run_pos_control = false;
+				_run_pos_control = true;
 
 			} else {
-				/* set position setpoint move rate */
-				_vel_sp(0) = _pos_sp_triplet.current.vx;
-				_vel_sp(1) = _pos_sp_triplet.current.vy;
+
+				if (_pos_sp_triplet.current.velocity_frame == position_setpoint_s::VELOCITY_FRAME_LOCAL_NED) {
+					/* set position setpoint move rate */
+					_vel_sp(0) = _pos_sp_triplet.current.vx;
+					_vel_sp(1) = _pos_sp_triplet.current.vy;
+
+				} else if (_pos_sp_triplet.current.velocity_frame == position_setpoint_s::VELOCITY_FRAME_BODY_NED) {
+					// Transform velocity command from body frame to NED frame
+					_vel_sp(0) = cosf(_yaw) * _pos_sp_triplet.current.vx - sinf(_yaw) * _pos_sp_triplet.current.vy;
+					_vel_sp(1) = sinf(_yaw) * _pos_sp_triplet.current.vx + cosf(_yaw) * _pos_sp_triplet.current.vy;
+
+				} else {
+					PX4_WARN("Unknown velocity offboard coordinate frame");
+				}
+
 				_run_pos_control = false;
 
 				_hold_offboard_xy = false;