diff --git a/modelmigration/migrations.go b/modelmigration/migrations.go
index 429dc8308cc..245a7a44ea4 100644
--- a/modelmigration/migrations.go
+++ b/modelmigration/migrations.go
@@ -424,6 +424,7 @@ func prepareMigrationTasks() []*migration {
 		newMigration(348, "Recreate email_hash table for SHA256 avatar hashes", v28.RecreateEmailHashTable),
 		newMigration(349, "Expand action_schedule content column", v28.ExpandActionScheduleContent),
 		newMigration(350, "Add published_unix column to release", v28.AddPublishedUnixToRelease),
+		newMigration(351, "Track transfer recipient access grants", v28.AddRecipientAccessGrantedToRepoTransfer),
 	}
 	return preparedMigrations
 }
diff --git a/modelmigration/v28/v351.go b/modelmigration/v28/v351.go
new file mode 100644
index 00000000000..8b0cbdb93f4
--- /dev/null
+++ b/modelmigration/v28/v351.go
@@ -0,0 +1,23 @@
+// Copyright 2026 The Gitea Authors. All rights reserved.
+// SPDX-License-Identifier: MIT
+
+package v28
+
+import (
+	"context"
+
+	"gitea.dev/modelmigration/base"
+
+	"xorm.io/xorm"
+)
+
+func AddRecipientAccessGrantedToRepoTransfer(_ context.Context, x base.EngineMigration) error {
+	type RepoTransfer struct {
+		RecipientAccessGranted bool `xorm:"NOT NULL DEFAULT false"`
+	}
+	_, err := x.SyncWithOptions(xorm.SyncOptions{
+		IgnoreConstrains:  true,
+		IgnoreDropIndices: true,
+	}, new(RepoTransfer))
+	return err
+}
diff --git a/models/repo/transfer.go b/models/repo/transfer.go
index 90916e0ddb6..24e98a6a095 100644
--- a/models/repo/transfer.go
+++ b/models/repo/transfer.go
@@ -72,6 +72,8 @@ type RepoTransfer struct { //nolint:revive // export stutter
 	TeamIDs     []int64
 	Teams       []*organization.Team `xorm:"-"`
 
+	RecipientAccessGranted bool `xorm:"NOT NULL DEFAULT false"`
+
 	CreatedUnix timeutil.TimeStamp `xorm:"INDEX NOT NULL created"`
 	UpdatedUnix timeutil.TimeStamp `xorm:"INDEX NOT NULL updated"`
 }
@@ -221,7 +223,7 @@ func TestRepositoryReadyForTransfer(status RepositoryStatus) error {
 
 // CreatePendingRepositoryTransfer transfer a repo from one owner to a new one.
 // it marks the repository transfer as "pending"
-func CreatePendingRepositoryTransfer(ctx context.Context, doer, newOwner *user_model.User, repoID int64, teams []*organization.Team) error {
+func CreatePendingRepositoryTransfer(ctx context.Context, doer, newOwner *user_model.User, repoID int64, teams []*organization.Team, recipientAccessGranted bool) error {
 	return db.WithTx(ctx, func(ctx context.Context) error {
 		repo, err := GetRepositoryByID(ctx, repoID)
 		if err != nil {
@@ -270,6 +272,8 @@ func CreatePendingRepositoryTransfer(ctx context.Context, doer, newOwner *user_m
 			UpdatedUnix: timeutil.TimeStampNow(),
 			DoerID:      doer.ID,
 			TeamIDs:     make([]int64, 0, len(teams)),
+
+			RecipientAccessGranted: recipientAccessGranted,
 		}
 
 		for k := range teams {
diff --git a/services/repository/collaboration.go b/services/repository/collaboration.go
index ac935ce4a14..46f31ae8e91 100644
--- a/services/repository/collaboration.go
+++ b/services/repository/collaboration.go
@@ -67,31 +67,31 @@ func AddOrUpdateCollaborator(ctx context.Context, repo *repo_model.Repository, u
 }
 
 // DeleteCollaboration removes collaboration relation between the user and repository.
-func DeleteCollaboration(ctx context.Context, repo *repo_model.Repository, collaborator *user_model.User) (err error) {
-	collaboration := &repo_model.Collaboration{
-		RepoID: repo.ID,
-		UserID: collaborator.ID,
-	}
+func DeleteCollaboration(ctx context.Context, repo *repo_model.Repository, collaborator *user_model.User) error {
+	return deleteCollaboration(ctx, repo, collaborator, &repo_model.Collaboration{RepoID: repo.ID, UserID: collaborator.ID})
+}
 
+func deleteCollaborationByMode(ctx context.Context, repo *repo_model.Repository, collaborator *user_model.User, mode perm.AccessMode) error {
+	return deleteCollaboration(ctx, repo, collaborator, &repo_model.Collaboration{
+		RepoID: repo.ID, UserID: collaborator.ID, Mode: mode,
+	})
+}
+
+func deleteCollaboration(ctx context.Context, repo *repo_model.Repository, collaborator *user_model.User, collaboration *repo_model.Collaboration) (err error) {
 	return db.WithTx(ctx, func(ctx context.Context) error {
-		if has, err := db.GetEngine(ctx).Delete(collaboration); err != nil {
+		if deleted, err := db.GetEngine(ctx).Delete(collaboration); err != nil {
 			return err
-		} else if has == 0 {
+		} else if deleted == 0 {
 			return nil
 		}
 
 		if err := repo.LoadOwner(ctx); err != nil {
 			return err
 		}
-
 		if err = access_model.RecalculateAccesses(ctx, repo); err != nil {
 			return err
 		}
 
-		if err = repo_model.WatchRepoAuto(ctx, collaborator, repo, false); err != nil {
-			return err
-		}
-
 		if err = ReconsiderWatches(ctx, repo, collaborator); err != nil {
 			return err
 		}
@@ -115,7 +115,8 @@ func ReconsiderRepoIssuesAssignee(ctx context.Context, repo *repo_model.Reposito
 }
 
 func ReconsiderWatches(ctx context.Context, repo *repo_model.Repository, user *user_model.User) error {
-	if has, err := access_model.HasAnyUnitAccess(ctx, user.ID, repo); err != nil || has {
+	permission, err := access_model.GetIndividualUserRepoPermission(ctx, repo, user)
+	if err != nil || permission.HasAnyUnitAccessOrPublicAccess() {
 		return err
 	}
 	if err := repo_model.WatchRepoAuto(ctx, user, repo, false); err != nil {
diff --git a/services/repository/collaboration_test.go b/services/repository/collaboration_test.go
index b77fd7d3fe9..2cb734fd06d 100644
--- a/services/repository/collaboration_test.go
+++ b/services/repository/collaboration_test.go
@@ -11,6 +11,7 @@ import (
 	"gitea.dev/models/perm"
 	access_model "gitea.dev/models/perm/access"
 	repo_model "gitea.dev/models/repo"
+	"gitea.dev/models/unit"
 	"gitea.dev/models/unittest"
 	user_model "gitea.dev/models/user"
 
@@ -98,3 +99,22 @@ func TestRepository_DeleteCollaborationRemovesSubscriptionsAndStopwatches(t *tes
 	assert.NoError(t, err)
 	assert.False(t, hasStopwatch)
 }
+
+func TestRepository_DeleteCollaborationPreservesWatchWithPublicAccess(t *testing.T) {
+	assert.NoError(t, unittest.PrepareTestDatabase())
+
+	ctx := t.Context()
+	user := unittest.AssertExistsAndLoadBean(t, &user_model.User{ID: 5})
+	assert.NoError(t, repo_model.UpdateRepoUnitPublicAccess(ctx, &repo_model.RepoUnit{
+		RepoID: 2, Type: unit.TypeIssues, EveryoneAccessMode: perm.AccessModeRead,
+	}))
+	repo := unittest.AssertExistsAndLoadBean(t, &repo_model.Repository{ID: 2})
+	assert.NoError(t, repo.LoadOwner(ctx))
+	assert.NoError(t, AddOrUpdateCollaborator(ctx, repo, user, perm.AccessModeRead))
+	assert.NoError(t, repo_model.WatchRepoAuto(ctx, user, repo, true))
+
+	assert.NoError(t, DeleteCollaboration(ctx, repo, user))
+	watch, err := repo_model.GetWatch(ctx, user.ID, repo.ID)
+	assert.NoError(t, err)
+	assert.True(t, repo_model.IsWatchModeWatching(watch.Mode))
+}
diff --git a/services/repository/transfer.go b/services/repository/transfer.go
index b0f7cba2bde..75288211d84 100644
--- a/services/repository/transfer.go
+++ b/services/repository/transfer.go
@@ -450,7 +450,7 @@ func StartRepositoryTransfer(ctx context.Context, doer, newOwner *user_model.Use
 			return transferOwnership(ctx, doer, newOwner.Name, repo, teams)
 		}
 
-		if user_model.IsUserBlockedBy(ctx, doer, newOwner.ID) {
+		if user_model.IsUserBlockedBy(ctx, doer, newOwner.ID) || user_model.IsUserBlockedBy(ctx, newOwner, repo.OwnerID) {
 			return user_model.ErrBlockedUser
 		}
 
@@ -471,15 +471,19 @@ func StartRepositoryTransfer(ctx context.Context, doer, newOwner *user_model.Use
 		if err != nil {
 			return err
 		}
-		if !hasAccess {
-			if err := AddOrUpdateCollaborator(ctx, repo, newOwner, perm.AccessModeRead); err != nil {
+		grantRecipientTempAccess := !hasAccess
+		if grantRecipientTempAccess {
+			if err := db.Insert(ctx, &repo_model.Collaboration{RepoID: repo.ID, UserID: newOwner.ID, Mode: perm.AccessModeRead}); err != nil {
+				return err
+			}
+			if err := access_model.RecalculateUserAccess(ctx, repo, newOwner.ID); err != nil {
 				return err
 			}
 		}
 
 		// Make repo as pending for transfer
 		repo.Status = repo_model.RepositoryPendingTransfer
-		return repo_model.CreatePendingRepositoryTransfer(ctx, doer, newOwner, repo.ID, teams)
+		return repo_model.CreatePendingRepositoryTransfer(ctx, doer, newOwner, repo.ID, teams, grantRecipientTempAccess)
 	}); err != nil {
 		return err
 	}
@@ -511,6 +515,9 @@ func RejectRepositoryTransfer(ctx context.Context, repo *repo_model.Repository,
 		if !repoTransfer.CanUserAcceptOrRejectTransfer(ctx, doer) {
 			return util.ErrPermissionDenied
 		}
+		if err := removeTransferRecipientCollaboration(ctx, repoTransfer); err != nil {
+			return err
+		}
 
 		repo.Status = repo_model.RepositoryReady
 		if err := repo_model.UpdateRepositoryColsNoAutoTime(ctx, repo, "status"); err != nil {
@@ -521,6 +528,13 @@ func RejectRepositoryTransfer(ctx context.Context, repo *repo_model.Repository,
 	})
 }
 
+func removeTransferRecipientCollaboration(ctx context.Context, repoTransfer *repo_model.RepoTransfer) error {
+	if !repoTransfer.RecipientAccessGranted {
+		return nil
+	}
+	return deleteCollaborationByMode(ctx, repoTransfer.Repo, repoTransfer.Recipient, perm.AccessModeRead)
+}
+
 func canUserCancelTransfer(ctx context.Context, r *repo_model.RepoTransfer, u *user_model.User) bool {
 	if u.IsAdmin || u.ID == r.DoerID {
 		return true
@@ -559,6 +573,9 @@ func CancelRepositoryTransfer(ctx context.Context, repoTransfer *repo_model.Repo
 		if !canUserCancelTransfer(ctx, repoTransfer, doer) {
 			return util.ErrPermissionDenied
 		}
+		if err := removeTransferRecipientCollaboration(ctx, repoTransfer); err != nil {
+			return err
+		}
 
 		repoTransfer.Repo.Status = repo_model.RepositoryReady
 		if err := repo_model.UpdateRepositoryColsNoAutoTime(ctx, repoTransfer.Repo, "status"); err != nil {
diff --git a/services/repository/transfer_test.go b/services/repository/transfer_test.go
index 02a62d531ab..82a15ba76b6 100644
--- a/services/repository/transfer_test.go
+++ b/services/repository/transfer_test.go
@@ -9,6 +9,7 @@ import (
 
 	activities_model "gitea.dev/models/activities"
 	"gitea.dev/models/organization"
+	"gitea.dev/models/perm"
 	access_model "gitea.dev/models/perm/access"
 	repo_model "gitea.dev/models/repo"
 	"gitea.dev/models/unittest"
@@ -72,16 +73,60 @@ func TestStartRepositoryTransferSetPermission(t *testing.T) {
 	repo := unittest.AssertExistsAndLoadBean(t, &repo_model.Repository{ID: 2})
 	assert.NoError(t, repo.LoadOwner(t.Context()))
 
+	// the recipient doesn't have permission to access the repo
 	hasAccess, err := access_model.HasAnyUnitAccess(t.Context(), recipient.ID, repo)
 	assert.NoError(t, err)
 	assert.False(t, hasAccess)
 
-	assert.NoError(t, StartRepositoryTransfer(t.Context(), doer, recipient, repo, nil))
-
-	hasAccess, err = access_model.HasAnyUnitAccess(t.Context(), recipient.ID, repo)
-	assert.NoError(t, err)
-	assert.True(t, hasAccess)
-
+	t.Run("RevokeAccessAfterRejection", func(t *testing.T) {
+		repo := unittest.AssertExistsAndLoadBean(t, &repo_model.Repository{ID: 2})
+		assert.NoError(t, repo.LoadOwner(t.Context()))
+		assert.NoError(t, StartRepositoryTransfer(t.Context(), doer, recipient, repo, nil))
+		hasAccess, err = access_model.HasAnyUnitAccess(t.Context(), recipient.ID, repo)
+		assert.NoError(t, err)
+		assert.True(t, hasAccess)
+		assert.NoError(t, RejectRepositoryTransfer(t.Context(), repo, recipient))
+		hasAccess, err = access_model.HasAnyUnitAccess(t.Context(), recipient.ID, repo)
+		assert.NoError(t, err)
+		assert.False(t, hasAccess)
+	})
+	t.Run("RevokeAccessAfterCancel", func(t *testing.T) {
+		repo := unittest.AssertExistsAndLoadBean(t, &repo_model.Repository{ID: 2})
+		assert.NoError(t, repo.LoadOwner(t.Context()))
+		assert.NoError(t, StartRepositoryTransfer(t.Context(), doer, recipient, repo, nil))
+		hasAccess, err = access_model.HasAnyUnitAccess(t.Context(), recipient.ID, repo)
+		assert.NoError(t, err)
+		assert.True(t, hasAccess)
+		transfer, err := repo_model.GetPendingRepositoryTransfer(t.Context(), repo)
+		assert.NoError(t, err)
+		assert.NoError(t, CancelRepositoryTransfer(t.Context(), transfer, doer))
+		hasAccess, err = access_model.HasAnyUnitAccess(t.Context(), recipient.ID, repo)
+		assert.NoError(t, err)
+		assert.False(t, hasAccess)
+	})
+	t.Run("KeepOriginAccessOnStop", func(t *testing.T) {
+		repo := unittest.AssertExistsAndLoadBean(t, &repo_model.Repository{ID: 2})
+		assert.NoError(t, repo.LoadOwner(t.Context()))
+		assert.NoError(t, AddOrUpdateCollaborator(t.Context(), repo, recipient, perm.AccessModeWrite))
+		assert.NoError(t, StartRepositoryTransfer(t.Context(), doer, recipient, repo, nil))
+		assert.NoError(t, RejectRepositoryTransfer(t.Context(), repo, recipient))
+		collaboration, err := repo_model.GetCollaboration(t.Context(), repo.ID, recipient.ID)
+		assert.NoError(t, err)
+		assert.Equal(t, perm.AccessModeWrite, collaboration.Mode)
+		assert.NoError(t, DeleteCollaboration(t.Context(), repo, recipient))
+	})
+	t.Run("KeepNonReadAccessOnStop", func(t *testing.T) {
+		repo := unittest.AssertExistsAndLoadBean(t, &repo_model.Repository{ID: 2})
+		assert.NoError(t, repo.LoadOwner(t.Context()))
+		assert.NoError(t, StartRepositoryTransfer(t.Context(), doer, recipient, repo, nil))
+		transfer, err := repo_model.GetPendingRepositoryTransfer(t.Context(), repo)
+		assert.NoError(t, err)
+		assert.NoError(t, AddOrUpdateCollaborator(t.Context(), repo, recipient, perm.AccessModeWrite))
+		assert.NoError(t, CancelRepositoryTransfer(t.Context(), transfer, doer))
+		collaboration, err := repo_model.GetCollaboration(t.Context(), repo.ID, recipient.ID)
+		assert.NoError(t, err)
+		assert.Equal(t, perm.AccessModeWrite, collaboration.Mode)
+	})
 	unittest.CheckConsistencyFor(t, &repo_model.Repository{}, &user_model.User{}, &organization.Team{})
 }
 
@@ -105,7 +150,7 @@ func TestRepositoryTransfer(t *testing.T) {
 
 	user2 := unittest.AssertExistsAndLoadBean(t, &user_model.User{ID: 2})
 
-	assert.NoError(t, repo_model.CreatePendingRepositoryTransfer(t.Context(), doer, user2, repo.ID, nil))
+	assert.NoError(t, repo_model.CreatePendingRepositoryTransfer(t.Context(), doer, user2, repo.ID, nil, false))
 
 	transfer, err = repo_model.GetPendingRepositoryTransfer(t.Context(), repo)
 	assert.NoError(t, err)
@@ -115,13 +160,13 @@ func TestRepositoryTransfer(t *testing.T) {
 	org6 := unittest.AssertExistsAndLoadBean(t, &user_model.User{ID: 2})
 
 	// Only transfer can be started at any given time
-	err = repo_model.CreatePendingRepositoryTransfer(t.Context(), doer, org6, repo.ID, nil)
+	err = repo_model.CreatePendingRepositoryTransfer(t.Context(), doer, org6, repo.ID, nil, false)
 	assert.Error(t, err)
 	assert.True(t, repo_model.IsErrRepoTransferInProgress(err))
 
 	repo2 := unittest.AssertExistsAndLoadBean(t, &repo_model.Repository{ID: 2})
 	// Unknown user, transfer non-existent transfer repo id = 2
-	err = repo_model.CreatePendingRepositoryTransfer(t.Context(), doer, &user_model.User{ID: 1000, LowerName: "user1000"}, repo2.ID, nil)
+	err = repo_model.CreatePendingRepositoryTransfer(t.Context(), doer, &user_model.User{ID: 1000, LowerName: "user1000"}, repo2.ID, nil, false)
 	assert.Error(t, err)
 
 	// Reject transfer