diff --git a/subsys/bluetooth/host/classic/br.c b/subsys/bluetooth/host/classic/br.c
index 23a43a01959b3..53e4dcfe11a45 100644
--- a/subsys/bluetooth/host/classic/br.c
+++ b/subsys/bluetooth/host/classic/br.c
@@ -13,6 +13,7 @@
 
 #include "common/bt_str.h"
 
+#include "br.h"
 #include "host/hci_core.h"
 #include "host/conn_internal.h"
 #include "host/keys.h"
@@ -805,7 +806,6 @@ int bt_br_init(void)
 	struct net_buf *buf;
 	struct bt_hci_cp_write_ssp_mode *ssp_cp;
 	struct bt_hci_cp_write_inquiry_mode *inq_cp;
-	struct bt_hci_write_local_name *name_cp;
 	struct bt_hci_rp_read_default_link_policy_settings *rp;
 	struct net_buf *rsp;
 	int err;
@@ -858,19 +858,15 @@ int bt_br_init(void)
 	}
 
 	/* Set local name */
-	buf = bt_hci_cmd_alloc(K_FOREVER);
-	if (!buf) {
-		return -ENOBUFS;
-	}
-
-	name_cp = net_buf_add(buf, sizeof(*name_cp));
-	strncpy((char *)name_cp->local_name, CONFIG_BT_DEVICE_NAME, sizeof(name_cp->local_name));
-
-	err = bt_hci_cmd_send_sync(BT_HCI_OP_WRITE_LOCAL_NAME, buf, NULL);
+	err = bt_br_write_local_name(CONFIG_BT_DEVICE_NAME);
 	if (err) {
 		return err;
 	}
 
+#if defined(CONFIG_BT_DEVICE_NAME_DYNAMIC)
+	strncpy(bt_dev.name, CONFIG_BT_DEVICE_NAME, CONFIG_BT_DEVICE_NAME_MAX);
+#endif
+
 	/* Set Class of device */
 	buf = bt_hci_cmd_alloc(K_FOREVER);
 	if (!buf) {
@@ -1337,3 +1333,19 @@ int bt_br_unpair(const bt_addr_t *addr)
 
 	return 0;
 }
+
+int bt_br_write_local_name(const char *name)
+{
+	struct net_buf *buf;
+	struct bt_hci_write_local_name *name_cp;
+
+	buf = bt_hci_cmd_alloc(K_FOREVER);
+	if (!buf) {
+		return -ENOBUFS;
+	}
+
+	name_cp = net_buf_add(buf, sizeof(*name_cp));
+	strncpy((char *)name_cp->local_name, name, sizeof(name_cp->local_name));
+
+	return bt_hci_cmd_send_sync(BT_HCI_OP_WRITE_LOCAL_NAME, buf, NULL);
+}
diff --git a/subsys/bluetooth/host/classic/br.h b/subsys/bluetooth/host/classic/br.h
index 80622aa637d4c..c326b20df56a9 100644
--- a/subsys/bluetooth/host/classic/br.h
+++ b/subsys/bluetooth/host/classic/br.h
@@ -1,4 +1,5 @@
 /*
+ * Copyright (c) 2025 Xiaomi Corporation
  * Copyright (c) 2017-2021 Nordic Semiconductor ASA
  * Copyright (c) 2015-2016 Intel Corporation
  *
@@ -10,3 +11,5 @@ int bt_br_init(void);
 void bt_br_discovery_reset(void);
 
 bool bt_br_update_sec_level(struct bt_conn *conn);
+
+int bt_br_write_local_name(const char *name);
diff --git a/subsys/bluetooth/host/hci_core.c b/subsys/bluetooth/host/hci_core.c
index 33306596b2ce7..5b83d7076129f 100644
--- a/subsys/bluetooth/host/hci_core.c
+++ b/subsys/bluetooth/host/hci_core.c
@@ -48,6 +48,7 @@
 
 #include "addr_internal.h"
 #include "adv.h"
+#include "classic/br.h"
 #include "common/hci_common_internal.h"
 #include "common/bt_str.h"
 #include "common/rpa.h"
@@ -66,10 +67,6 @@
 #include "settings.h"
 #include "smp.h"
 
-#if defined(CONFIG_BT_CLASSIC)
-#include "classic/br.h"
-#endif
-
 #if defined(CONFIG_BT_DF)
 #include "direction_internal.h"
 #endif /* CONFIG_BT_DF */
@@ -3888,10 +3885,9 @@ static int le_init(void)
 	return  le_set_event_mask();
 }
 
-#if !defined(CONFIG_BT_CLASSIC)
-static int bt_br_init(void)
+static int br_hci_init(void)
 {
-#if defined(CONFIG_BT_CONN)
+#if !defined(CONFIG_BT_CLASSIC) && defined(CONFIG_BT_CONN)
 	struct net_buf *rsp;
 	int err;
 
@@ -3907,11 +3903,10 @@ static int bt_br_init(void)
 
 	read_buffer_size_complete(rsp);
 	net_buf_unref(rsp);
-#endif /* CONFIG_BT_CONN */
+#endif /* !CONFIG_BT_CLASSIC && CONFIG_BT_CONN */
 
 	return 0;
 }
-#endif /* !defined(CONFIG_BT_CLASSIC) */
 
 static int set_event_mask(void)
 {
@@ -4198,7 +4193,7 @@ static int hci_init(void)
 	}
 
 	if (BT_FEAT_BREDR(bt_dev.features)) {
-		err = bt_br_init();
+		err = br_hci_init();
 		if (err) {
 			return err;
 		}
@@ -4766,6 +4761,14 @@ int bt_set_name(const char *name)
 		}
 	}
 
+	if (IS_ENABLED(CONFIG_BT_CLASSIC)) {
+		err = bt_br_write_local_name(bt_dev.name);
+		if (err) {
+			LOG_WRN("Unable to set local name");
+			return err;
+		}
+	}
+
 	return 0;
 #else
 	return -ENOMEM;
diff --git a/subsys/bluetooth/host/settings.c b/subsys/bluetooth/host/settings.c
index 84b4f1eb4b6a8..4a3b2bdb13501 100644
--- a/subsys/bluetooth/host/settings.c
+++ b/subsys/bluetooth/host/settings.c
@@ -255,8 +255,13 @@ static int commit_settings(void)
 	}
 
 #if defined(CONFIG_BT_DEVICE_NAME_DYNAMIC)
+	/* If bt_dev name was empty, then the default name needs to be set.
+	 * Otherwise set the name from settings tree.
+	 */
 	if (bt_dev.name[0] == '\0') {
 		bt_set_name(CONFIG_BT_DEVICE_NAME);
+	} else {
+		bt_set_name(bt_dev.name);
 	}
 #endif
 	if (!bt_dev.id_count) {