diff --git a/cms/djangoapps/contentstore/signals/handlers.py b/cms/djangoapps/contentstore/signals/handlers.py
index b8be6ee84f..857ee04575 100644
--- a/cms/djangoapps/contentstore/signals/handlers.py
+++ b/cms/djangoapps/contentstore/signals/handlers.py
@@ -17,12 +17,14 @@ from openedx_events.content_authoring.data import (
     CourseData,
     CourseScheduleData,
     LibraryBlockData,
+    LibraryContainerData,
     XBlockData,
 )
 from openedx_events.content_authoring.signals import (
     COURSE_CATALOG_INFO_CHANGED,
     COURSE_IMPORT_COMPLETED,
     LIBRARY_BLOCK_DELETED,
+    LIBRARY_CONTAINER_DELETED,
     XBLOCK_CREATED,
     XBLOCK_DELETED,
     XBLOCK_UPDATED,
@@ -49,6 +51,7 @@ from ..tasks import (
     create_or_update_upstream_links,
     handle_create_or_update_xblock_upstream_link,
     handle_unlink_upstream_block,
+    handle_unlink_upstream_container,
 )
 from .signals import GRADING_POLICY_CHANGED
 
@@ -314,3 +317,16 @@ def unlink_upstream_block_handler(**kwargs):
         return
 
     handle_unlink_upstream_block.delay(str(library_block.usage_key))
+
+
+@receiver(LIBRARY_CONTAINER_DELETED)
+def unlink_upstream_container_handler(**kwargs):
+    """
+    Handle unlinking the upstream (library) container from any downstream (course) blocks.
+    """
+    library_container = kwargs.get("library_container", None)
+    if not library_container or not isinstance(library_container, LibraryContainerData):  # pragma: no cover
+        log.error("Received null or incorrect data for event")
+        return
+
+    handle_unlink_upstream_container.delay(str(library_container.container_key))
diff --git a/cms/djangoapps/contentstore/tasks.py b/cms/djangoapps/contentstore/tasks.py
index b6cb2af53d..9a0b04d243 100644
--- a/cms/djangoapps/contentstore/tasks.py
+++ b/cms/djangoapps/contentstore/tasks.py
@@ -34,7 +34,7 @@ from olxcleaner.exceptions import ErrorLevel
 from olxcleaner.reporting import report_error_summary, report_errors
 from opaque_keys import InvalidKeyError
 from opaque_keys.edx.keys import CourseKey, UsageKey
-from opaque_keys.edx.locator import LibraryLocator
+from opaque_keys.edx.locator import LibraryLocator, LibraryContainerLocator
 from organizations.api import add_organization_course, ensure_organization
 from organizations.exceptions import InvalidOrganizationException
 from organizations.models import Organization, OrganizationCourse
@@ -1506,7 +1506,23 @@ def handle_unlink_upstream_block(upstream_usage_key_string: str) -> None:
         upstream_usage_key=upstream_usage_key,
     ):
         make_copied_tags_editable(str(link.downstream_usage_key))
+
+
+@shared_task
+@set_code_owner_attribute
+def handle_unlink_upstream_container(upstream_container_key_string: str) -> None:
+    """
+    Handle updates needed to downstream blocks when the upstream link is severed.
+    """
+    ensure_cms("handle_unlink_upstream_container may only be executed in a CMS context")
+
+    try:
+        upstream_container_key = LibraryContainerLocator.from_string(upstream_container_key_string)
+    except (InvalidKeyError):
+        LOGGER.exception(f'Invalid upstream container_key: {upstream_container_key_string}')
+        return
+
     for link in ContainerLink.objects.filter(
-        upstream_usage_key=upstream_usage_key,
+        upstream_container_key=upstream_container_key,
     ):
         make_copied_tags_editable(str(link.downstream_usage_key))