diff --git a/changelogs/fragments/59772-fix_ansible_issue_58619.yaml b/changelogs/fragments/59772-fix_ansible_issue_58619.yaml
new file mode 100644
index 00000000000..dbfce7a87f4
--- /dev/null
+++ b/changelogs/fragments/59772-fix_ansible_issue_58619.yaml
@@ -0,0 +1,5 @@
+bugfixes:
+  - >
+     group - The group module was not correctly detecting whether a local
+     group is existing or not with local set to yes if the same group
+     exists in a non local group repository e.g. LDAP. (https://github.com/ansible/ansible/issues/58619)
diff --git a/lib/ansible/modules/system/group.py b/lib/ansible/modules/system/group.py
index ac50bc899d3..159fee15460 100644
--- a/lib/ansible/modules/system/group.py
+++ b/lib/ansible/modules/system/group.py
@@ -98,6 +98,7 @@ system:
 '''
 
 import grp
+import os
 
 from ansible.module_utils._text import to_bytes
 from ansible.module_utils.basic import AnsibleModule
@@ -192,11 +193,36 @@ class Group(object):
         return self.execute_command(cmd)
 
     def group_exists(self):
-        try:
-            if grp.getgrnam(self.name):
-                return True
-        except KeyError:
-            return False
+        # The grp module does not distinguish between local and directory accounts.
+        # It's output cannot be used to determine whether or not a group exists locally.
+        # It returns True if the group exists locally or in the directory, so instead
+        # look in the local GROUP file for an existing account.
+        if self.local:
+            if not os.path.exists(self.GROUPFILE):
+                self.module.fail_json(msg="'local: true' specified but unable to find local group file {0} to parse.".format(self.GROUPFILE))
+
+            exists = False
+            name_test = '{0}:'.format(self.name)
+            with open(self.GROUPFILE, 'rb') as f:
+                reversed_lines = f.readlines()[::-1]
+                for line in reversed_lines:
+                    if line.startswith(to_bytes(name_test)):
+                        exists = True
+                        break
+
+            if not exists:
+                self.module.warn(
+                    "'local: true' specified and group was not found in {file}. "
+                    "The local group may already exist if the local group database exists somewhere other than {file}.".format(file=self.GROUPFILE))
+
+            return exists
+
+        else:
+            try:
+                if grp.getgrnam(self.name):
+                    return True
+            except KeyError:
+                return False
 
     def group_info(self):
         if not self.group_exists():
diff --git a/test/integration/targets/group/tasks/tests.yml b/test/integration/targets/group/tasks/tests.yml
index b29e2e191d9..d07ad36a3d6 100644
--- a/test/integration/targets/group/tasks/tests.yml
+++ b/test/integration/targets/group/tasks/tests.yml
@@ -267,3 +267,50 @@
         state: absent
   # only applicable to Linux, limit further to CentOS where 'luseradd' is installed
   when: ansible_distribution == 'CentOS'
+
+# https://github.com/ansible/ansible/pull/59772
+- block:
+  - name: create group with a gid
+    group:
+      name: group1_test
+      gid: 1337
+      local: no
+      state: present
+    register: create_group_gid
+
+  - name: get gid of created group
+    command: "{{ ansible_python_interpreter | quote }} -c \"import grp; print(grp.getgrnam('group1_test').gr_gid)\""
+    register: create_group_gid_actual
+
+  - name: assert create group with a gid
+    assert:
+        that:
+        - create_group_gid is changed
+        - create_group_gid.gid | int == 1337 | int
+        - create_group_gid_actual.stdout | trim | int == 1337 | int
+
+  - name: create local group with the same gid
+    group:
+      name: group1_test
+      gid: 1337
+      local: yes
+      state: present
+    register: create_local_group_gid
+
+  - name: assert create local group with a gid
+    assert:
+        that:
+        - create_local_group_gid.gid | int == 1337 | int
+  always:
+    - name: Cleanup create group with a gid
+      group:
+        name: group1_test
+        local: no
+        state: absent
+    - name: Cleanup create local group with the same gid
+      group:
+        name: group1_test
+        local: yes
+        state: absent
+  # only applicable to Linux, limit further to CentOS where 'lgroupadd' is installed
+  when: ansible_distribution == 'CentOS'