diff --git a/airflow/jobs/local_task_job.py b/airflow/jobs/local_task_job.py
index 35d0422e7d4b1..967b25bb38c2a 100644
--- a/airflow/jobs/local_task_job.py
+++ b/airflow/jobs/local_task_job.py
@@ -167,6 +167,7 @@ def handle_task_exit(self, return_code: int) -> None:
         if not self.task_instance.test_mode:
             if conf.getboolean('scheduler', 'schedule_after_task_execution', fallback=True):
                 self._run_mini_scheduler_on_child_tasks()
+            self._update_dagrun_state_for_paused_dag()
 
     def on_kill(self):
         self.task_runner.terminate()
@@ -264,3 +265,16 @@ def _run_mini_scheduler_on_child_tasks(self, session=None) -> None:
                 exc_info=True,
             )
             session.rollback()
+
+    @provide_session
+    def _update_dagrun_state_for_paused_dag(self, session=None):
+        """
+        Checks for paused dags with DagRuns in the running state and
+        update the DagRun state if possible
+        """
+        dag = self.task_instance.task.dag
+        if dag.get_is_paused():
+            dag_run = self.task_instance.get_dagrun(session=session)
+            if dag_run:
+                dag_run.dag = dag
+                dag_run.update_state(session=session, execute_callbacks=True)
diff --git a/tests/jobs/test_local_task_job.py b/tests/jobs/test_local_task_job.py
index 905d83ae569e2..77099cb9dc799 100644
--- a/tests/jobs/test_local_task_job.py
+++ b/tests/jobs/test_local_task_job.py
@@ -45,6 +45,7 @@
 from airflow.utils.session import create_session
 from airflow.utils.state import State
 from airflow.utils.timeout import timeout
+from airflow.utils.types import DagRunType
 from tests.test_utils import db
 from tests.test_utils.asserts import assert_queries_count
 from tests.test_utils.config import conf_vars
@@ -686,6 +687,43 @@ def test_fast_follow(
             if scheduler_job.processor_agent:
                 scheduler_job.processor_agent.end()
 
+    def test_task_exit_should_update_state_of_finished_dagruns_with_dag_paused(self):
+        """Test that with DAG paused, DagRun state will update when the tasks finishes the run"""
+        dag = DAG(dag_id='test_dags', start_date=DEFAULT_DATE)
+        op1 = PythonOperator(task_id='dummy', dag=dag, owner='airflow', python_callable=lambda: True)
+
+        session = settings.Session()
+        orm_dag = DagModel(
+            dag_id=dag.dag_id,
+            has_task_concurrency_limits=False,
+            next_dagrun=dag.start_date,
+            next_dagrun_create_after=dag.following_schedule(DEFAULT_DATE),
+            is_active=True,
+            is_paused=True,
+        )
+        session.add(orm_dag)
+        session.flush()
+        # Write Dag to DB
+        dagbag = DagBag(dag_folder="/dev/null", include_examples=False, read_dags_from_db=False)
+        dagbag.bag_dag(dag, root_dag=dag)
+        dagbag.sync_to_db()
+
+        dr = dag.create_dagrun(
+            run_type=DagRunType.SCHEDULED,
+            state=State.RUNNING,
+            execution_date=DEFAULT_DATE,
+            start_date=DEFAULT_DATE,
+            session=session,
+        )
+        assert dr.state == State.RUNNING
+        ti = TaskInstance(op1, dr.execution_date)
+        job1 = LocalTaskJob(task_instance=ti, ignore_ti_state=True, executor=SequentialExecutor())
+        job1.task_runner = StandardTaskRunner(job1)
+        job1.run()
+        session.add(dr)
+        session.refresh(dr)
+        assert dr.state == State.SUCCESS
+
 
 @pytest.fixture()
 def clean_db_helper():
@@ -704,12 +742,12 @@ def test_number_of_queries_single_loop(self, mock_get_task_runner, return_codes)
         task = DummyOperator(task_id='test_state_succeeded1', dag=dag)
 
         dag.clear()
-        dag.create_dagrun(run_id=unique_prefix, state=State.NONE)
+        dag.create_dagrun(run_id=unique_prefix, execution_date=DEFAULT_DATE, state=State.NONE)
 
         ti = TaskInstance(task=task, execution_date=DEFAULT_DATE)
 
         mock_get_task_runner.return_value.return_code.side_effects = return_codes
 
         job = LocalTaskJob(task_instance=ti, executor=MockExecutor())
-        with assert_queries_count(15):
+        with assert_queries_count(16):
             job.run()