diff --git a/lms/djangoapps/course_home_api/outline/tests/test_view.py b/lms/djangoapps/course_home_api/outline/tests/test_view.py
index 4f40d9a80192..cb7f30e7c44f 100644
--- a/lms/djangoapps/course_home_api/outline/tests/test_view.py
+++ b/lms/djangoapps/course_home_api/outline/tests/test_view.py
@@ -12,6 +12,7 @@
 from completion.models import BlockCompletion
 from django.conf import settings  # lint-amnesty, pylint: disable=wrong-import-order
 from django.urls import reverse  # lint-amnesty, pylint: disable=wrong-import-order
+from django.test import override_settings
 from edx_toggles.toggles.testutils import override_waffle_flag  # lint-amnesty, pylint: disable=wrong-import-order
 
 from cms.djangoapps.contentstore.outlines import update_outline_from_modulestore
@@ -739,6 +740,45 @@ def test_blocks_complete_with_problem(self, problem_complete):
         assert sequence_data['complete'] == problem_complete
         assert vertical_data['complete'] == problem_complete
 
+    @ddt.data(
+        # In the following tests, the library is treated as an aggregate block. The library completion does not matter.
+        (False, False, False, False),  # Nothing is completed.
+        (True, False, False, True),  # Only the problem is completed.
+        (False, True, False, False),  # Only the library is completed.
+        (True, True, False, True),  # Both the library and the problem are completed.
+        # In the following tests, the library is treated as a completable block. The problem completion does not matter.
+        (False, False, True, False),  # Nothing is completed.
+        (True, False, True, False),  # Only the problem is completed.
+        (False, True, True, True),  # Only the library is completed.
+        (True, True, True, True),  # Both the library and the problem are completed.
+    )
+    @ddt.unpack
+    def test_blocks_complete_with_library_content_block(
+        self, problem_complete, library_complete, library_complete_on_view, expected
+    ):
+        """
+        Test that the API checks the children completion only when the XBlock's completion mode is `AGGREGATOR`.
+
+        The completion of the `COMPLETABLE` XBlocks should not depend on the completion of their children.
+        """
+        self.add_blocks_to_course()
+        library = BlockFactory.create(parent=self.vertical, category='library_content', graded=True, has_score=True)
+        problem = BlockFactory.create(parent=library, category='problem', graded=True, has_score=True)
+        CourseEnrollment.enroll(self.user, self.course.id)
+        self.create_completion(problem, int(problem_complete))
+        self.create_completion(library, int(library_complete))
+
+        with override_settings(
+            FEATURES={**settings.FEATURES, 'MARK_LIBRARY_CONTENT_BLOCK_COMPLETE_ON_VIEW': library_complete_on_view}
+        ):
+            response = self.client.get(reverse('course-home:course-navigation', args=[self.course.id]))
+
+        sequence_data = response.data['blocks'][str(self.sequential.location)]
+        vertical_data = response.data['blocks'][str(self.vertical.location)]
+
+        assert sequence_data['complete'] == expected
+        assert vertical_data['complete'] == expected
+
     def test_blocks_completion_stat(self):
         """
         Test that the API returns the correct completion statistics for the blocks.
diff --git a/lms/djangoapps/course_home_api/outline/views.py b/lms/djangoapps/course_home_api/outline/views.py
index e7ebb2eef28f..d822d980f90a 100644
--- a/lms/djangoapps/course_home_api/outline/views.py
+++ b/lms/djangoapps/course_home_api/outline/views.py
@@ -516,7 +516,7 @@ def mark_complete_recursive(self, block):
         if not block:
             return block
 
-        if 'children' in block:
+        if 'children' in block and block['type'] in self.aggregator_block_types:
             block['children'] = [self.mark_complete_recursive(child) for child in block['children'] if child]
             completable_children = self.get_completable_children(block)
             block['complete'] = all(child['complete'] for child in completable_children)
@@ -608,6 +608,20 @@ def completions_dict(self):
             for block_key, completion in completions
         }
 
+    @cached_property
+    def aggregator_block_types(self) -> set[str]:
+        """
+        Return a set of block types that belong to XBlockCompletionMode.AGGREGATOR.
+
+        We use this information to determine if the block completion should depend on the completion of its children:
+        1. If the block is an aggregator, it should be marked as completed when all its children are completed.
+        2. If the block is completable, it should be directly marked as completed - regardless of its children.
+        """
+        return {
+            block_type for (block_type, block_cls) in XBlock.load_classes()
+            if XBlockCompletionMode.get_mode(block_cls) == XBlockCompletionMode.AGGREGATOR
+        }
+
     @cached_property
     def completable_block_types(self):
         """