diff --git a/core/java/android/content/pm/PackageManager.java b/core/java/android/content/pm/PackageManager.java
index 5795cd24f4b1a..539e097504d6e 100644
--- a/core/java/android/content/pm/PackageManager.java
+++ b/core/java/android/content/pm/PackageManager.java
@@ -1561,6 +1561,14 @@ public abstract class PackageManager {
      */
     public static final int INSTALL_PARSE_FAILED_RESOURCES_ARSC_COMPRESSED = -124;
 
+    /**
+     * Installation failed return code: the package was skipped and should be ignored.
+     *
+     * The reason for the skip is undefined.
+     * @hide
+     */
+    public static final int INSTALL_PARSE_FAILED_SKIPPED = -125;
+
     /** @hide */
     @IntDef(flag = true, prefix = { "DELETE_" }, value = {
             DELETE_KEEP_DATA,
diff --git a/core/java/android/content/pm/PackageParser.java b/core/java/android/content/pm/PackageParser.java
index addac9853f923..3b3521f834aa8 100644
--- a/core/java/android/content/pm/PackageParser.java
+++ b/core/java/android/content/pm/PackageParser.java
@@ -2001,6 +2001,7 @@ public class PackageParser {
                     Slog.i(TAG, "Skipping target and overlay pair " + pkg.mOverlayTarget + " and "
                         + pkg.baseCodePath+ ": overlay ignored due to required system property: "
                         + propName + " with value: " + propValue);
+                    mParseError = PackageManager.INSTALL_PARSE_FAILED_SKIPPED;
                     return null;
                 }
 
diff --git a/core/java/android/content/pm/parsing/ParsingPackageUtils.java b/core/java/android/content/pm/parsing/ParsingPackageUtils.java
index 197ad7412a1fe..d3d15c82dd1bf 100644
--- a/core/java/android/content/pm/parsing/ParsingPackageUtils.java
+++ b/core/java/android/content/pm/parsing/ParsingPackageUtils.java
@@ -2347,14 +2347,12 @@ public class ParsingPackageUtils {
             String propValue = sa.getString(
                     R.styleable.AndroidManifestResourceOverlay_requiredSystemPropertyValue);
             if (!PackageParser.checkRequiredSystemProperties(propName, propValue)) {
-                Slog.i(TAG, "Skipping target and overlay pair " + target + " and "
+                String message = "Skipping target and overlay pair " + target + " and "
                         + pkg.getBaseCodePath()
                         + ": overlay ignored due to required system property: "
-                        + propName + " with value: " + propValue);
-                return input.error("Skipping target and overlay pair " + target + " and "
-                        + pkg.getBaseCodePath()
-                        + ": overlay ignored due to required system property: "
-                        + propName + " with value: " + propValue);
+                        + propName + " with value: " + propValue;
+                Slog.i(TAG, message);
+                return input.skip(message);
             }
 
             return input.success(pkg.setOverlay(true)
diff --git a/core/java/android/content/pm/parsing/result/ParseInput.java b/core/java/android/content/pm/parsing/result/ParseInput.java
index 6b659bea84f1e..d5898b7f57a1a 100644
--- a/core/java/android/content/pm/parsing/result/ParseInput.java
+++ b/core/java/android/content/pm/parsing/result/ParseInput.java
@@ -88,6 +88,14 @@ public interface ParseInput {
      */
     ParseResult<?> enableDeferredError(String packageName, int targetSdkVersion);
 
+    /**
+     * This will assign errorCode to {@link PackageManager#INSTALL_PARSE_FAILED_SKIPPED, used for
+     * packages which should be ignored by the caller.
+     *
+     * @see #error(int, String, Exception)
+     */
+    <ResultType> ParseResult<ResultType> skip(@NonNull String parseError);
+
     /** @see #error(int, String, Exception) */
     <ResultType> ParseResult<ResultType> error(int parseError);
 
diff --git a/core/java/android/content/pm/parsing/result/ParseTypeImpl.java b/core/java/android/content/pm/parsing/result/ParseTypeImpl.java
index b26bf71a61c57..61152061ae106 100644
--- a/core/java/android/content/pm/parsing/result/ParseTypeImpl.java
+++ b/core/java/android/content/pm/parsing/result/ParseTypeImpl.java
@@ -146,6 +146,11 @@ public class ParseTypeImpl implements ParseInput, ParseResult<Object> {
         return success(null);
     }
 
+    @Override
+    public <ResultType> ParseResult<ResultType> skip(@NonNull String parseError) {
+        return error(PackageManager.INSTALL_PARSE_FAILED_SKIPPED, parseError);
+    }
+
     @Override
     public <ResultType> ParseResult<ResultType> error(int parseError) {
         return error(parseError, null);
diff --git a/services/tests/servicestests/src/com/android/server/pm/parsing/AndroidPackageParsingTestBase.kt b/services/tests/servicestests/src/com/android/server/pm/parsing/AndroidPackageParsingTestBase.kt
index 7b1b2d2f5c2b2..6de08fd1251f4 100644
--- a/services/tests/servicestests/src/com/android/server/pm/parsing/AndroidPackageParsingTestBase.kt
+++ b/services/tests/servicestests/src/com/android/server/pm/parsing/AndroidPackageParsingTestBase.kt
@@ -23,6 +23,7 @@ import android.content.pm.ConfigurationInfo
 import android.content.pm.FeatureInfo
 import android.content.pm.InstrumentationInfo
 import android.content.pm.PackageInfo
+import android.content.pm.PackageManager
 import android.content.pm.PackageParser
 import android.content.pm.PackageUserState
 import android.content.pm.PermissionInfo
@@ -168,6 +169,11 @@ open class AndroidPackageParsingTestBase {
 
         private fun <T> tryOrNull(block: () -> T) = try {
             block()
+        } catch (e: PackageParser.PackageParserException) {
+            if (e.error != PackageManager.INSTALL_PARSE_FAILED_SKIPPED) {
+                thrownInSetUp.add(e)
+            }
+            null
         } catch (t: Throwable) {
             thrownInSetUp.add(t)
             null