diff --git a/packages/grafana-toolkit/README.md b/packages/grafana-toolkit/README.md
index a1da1ee4689..8b853ac6b41 100644
--- a/packages/grafana-toolkit/README.md
+++ b/packages/grafana-toolkit/README.md
@@ -336,7 +336,19 @@ You can contribute to grafana-toolkit by helping develop it or by debugging it.
 
 ### Develop grafana-toolkit
 
-Typically plugins should be developed using the `@grafana/toolkit` installed from npm. However, when working on the toolkit, you might want to use the local version. Follow the steps below to develop with a local version:
+Typically plugins should be developed using the `@grafana/toolkit` installed from npm. However, when working on the toolkit, you might want to use the local version. There are two ways to run the local toolkit version:
+
+### Using `NODE_OPTIONS` to load the yarn pnp file:
+
+You can run grafana toolkit directly from the grafana repository with this command.
+
+`NODE_OPTIONS="--require $GRAFANA_REPO/.pnp.cjs" $GRAFANA_REPO/packages/grafana-toolkit/dist/bin/grafana-toolkit.js [command]`
+
+You can replace `$GRAFANA_REPO` with the path to your grafana clone or set it in your environment. e.g.: `export GRAFANA_REPO=/home/dev/your_grafana_clone`
+
+> Note: This will run grafana toolkit from your local clone but it won't change the dependencies of what you are trying to build.
+
+### Using yarn berry linking.
 
 #### Prerequisites