diff --git a/cc/cc_test.go b/cc/cc_test.go
index 81212c8..d6b969a 100644
--- a/cc/cc_test.go
+++ b/cc/cc_test.go
@@ -39,7 +39,6 @@
 
 var prepareForCcTest = android.GroupFixturePreparers(
 	PrepareForTestWithCcIncludeVndk,
-	aidl_library.PrepareForTestWithAidlLibrary,
 	android.FixtureModifyProductVariables(func(variables android.FixtureProductVariables) {
 		variables.DeviceVndkVersion = StringPtr("current")
 		variables.ProductVndkVersion = StringPtr("current")
@@ -4421,7 +4420,7 @@
 	}
 }
 
-func TestAidlLibraryWithHeader(t *testing.T) {
+func TestAidlLibraryWithHeaders(t *testing.T) {
 	t.Parallel()
 	ctx := android.GroupFixturePreparers(
 		prepareForCcTest,
@@ -4431,6 +4430,7 @@
 			aidl_library {
 				name: "bar",
 				srcs: ["x/y/Bar.aidl"],
+				hdrs: ["x/HeaderBar.aidl"],
 				strip_import_prefix: "x",
 			}
 			`)}.AddToFixture(),
@@ -4439,6 +4439,7 @@
 			aidl_library {
 				name: "foo",
 				srcs: ["a/b/Foo.aidl"],
+				hdrs: ["a/HeaderFoo.aidl"],
 				strip_import_prefix: "a",
 				deps: ["bar"],
 			}
@@ -4453,7 +4454,20 @@
 	).RunTest(t).TestContext
 
 	libfoo := ctx.ModuleForTests("libfoo", "android_arm64_armv8-a_static")
-	manifest := android.RuleBuilderSboxProtoForTests(t, libfoo.Output("aidl.sbox.textproto"))
+
+	android.AssertPathsRelativeToTopEquals(
+		t,
+		"aidl headers",
+		[]string{
+			"package_bar/x/HeaderBar.aidl",
+			"package_foo/a/HeaderFoo.aidl",
+			"package_foo/a/b/Foo.aidl",
+			"out/soong/.intermediates/package_foo/libfoo/android_arm64_armv8-a_static/gen/aidl_library.sbox.textproto",
+		},
+		libfoo.Rule("aidl_library").Implicits,
+	)
+
+	manifest := android.RuleBuilderSboxProtoForTests(t, libfoo.Output("aidl_library.sbox.textproto"))
 	aidlCommand := manifest.Commands[0].GetCommand()
 
 	expectedAidlFlags := "-Ipackage_foo/a -Ipackage_bar/x"
@@ -4463,14 +4477,14 @@
 
 	outputs := strings.Join(libfoo.AllOutputs(), " ")
 
-	android.AssertStringDoesContain(t, "aidl-generated header", outputs, "gen/aidl/b/BpFoo.h")
-	android.AssertStringDoesContain(t, "aidl-generated header", outputs, "gen/aidl/b/BnFoo.h")
-	android.AssertStringDoesContain(t, "aidl-generated header", outputs, "gen/aidl/b/Foo.h")
+	android.AssertStringDoesContain(t, "aidl-generated header", outputs, "gen/aidl_library/b/BpFoo.h")
+	android.AssertStringDoesContain(t, "aidl-generated header", outputs, "gen/aidl_library/b/BnFoo.h")
+	android.AssertStringDoesContain(t, "aidl-generated header", outputs, "gen/aidl_library/b/Foo.h")
 	android.AssertStringDoesContain(t, "aidl-generated cpp", outputs, "b/Foo.cpp")
 	// Confirm that the aidl header doesn't get compiled to cpp and h files
-	android.AssertStringDoesNotContain(t, "aidl-generated header", outputs, "gen/aidl/y/BpBar.h")
-	android.AssertStringDoesNotContain(t, "aidl-generated header", outputs, "gen/aidl/y/BnBar.h")
-	android.AssertStringDoesNotContain(t, "aidl-generated header", outputs, "gen/aidl/y/Bar.h")
+	android.AssertStringDoesNotContain(t, "aidl-generated header", outputs, "gen/aidl_library/y/BpBar.h")
+	android.AssertStringDoesNotContain(t, "aidl-generated header", outputs, "gen/aidl_library/y/BnBar.h")
+	android.AssertStringDoesNotContain(t, "aidl-generated header", outputs, "gen/aidl_library/y/Bar.h")
 	android.AssertStringDoesNotContain(t, "aidl-generated cpp", outputs, "y/Bar.cpp")
 }
 
@@ -4549,6 +4563,55 @@
 	}
 }
 
+func TestInvalidAidlProp(t *testing.T) {
+	t.Parallel()
+
+	testCases := []struct {
+		description string
+		bp          string
+	}{
+		{
+			description: "Invalid use of aidl.libs and aidl.include_dirs",
+			bp: `
+			cc_library {
+				name: "foo",
+				aidl: {
+					libs: ["foo_aidl"],
+					include_dirs: ["bar/include"],
+				}
+			}
+			`,
+		},
+		{
+			description: "Invalid use of aidl.libs and aidl.local_include_dirs",
+			bp: `
+			cc_library {
+				name: "foo",
+				aidl: {
+					libs: ["foo_aidl"],
+					local_include_dirs: ["include"],
+				}
+			}
+			`,
+		},
+	}
+
+	for _, testCase := range testCases {
+		t.Run(testCase.description, func(t *testing.T) {
+			bp := `
+			aidl_library {
+				name: "foo_aidl",
+				srcs: ["Foo.aidl"],
+			} ` + testCase.bp
+			android.GroupFixturePreparers(
+				prepareForCcTest,
+				aidl_library.PrepareForTestWithAidlLibrary.
+					ExtendWithErrorHandler(android.FixtureExpectsOneErrorPattern("For aidl headers, please only use aidl.libs prop")),
+			).RunTestWithBp(t, bp)
+		})
+	}
+}
+
 func TestMinSdkVersionInClangTriple(t *testing.T) {
 	t.Parallel()
 	ctx := testCc(t, `
@@ -4790,23 +4853,24 @@
 		checkIncludeDirs(t, ctx, foo,
 			expectedIncludeDirs(`
 				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl
+				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl_library
 			`),
 			expectedSystemIncludeDirs(``),
 			expectedGeneratedHeaders(`
 				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/b.h
 				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/Bnb.h
 				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/Bpb.h
-				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/y/Bar.h
-				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/y/BnBar.h
-				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/y/BpBar.h
+				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl_library/y/Bar.h
+				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl_library/y/BnBar.h
+				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl_library/y/BpBar.h
 			`),
 			expectedOrderOnlyDeps(`
 				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/b.h
 				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/Bnb.h
 				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/Bpb.h
-				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/y/Bar.h
-				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/y/BnBar.h
-				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl/y/BpBar.h
+				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl_library/y/Bar.h
+				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl_library/y/BnBar.h
+				.intermediates/libfoo/android_arm64_armv8-a_shared/gen/aidl_library/y/BpBar.h
 			`),
 		)
 	})
diff --git a/cc/compiler.go b/cc/compiler.go
index 5da745e..16f4a6e 100644
--- a/cc/compiler.go
+++ b/cc/compiler.go
@@ -565,6 +565,11 @@
 			"-I"+android.PathForModuleGen(ctx, "yacc", ctx.ModuleDir()).String())
 	}
 
+	if len(compiler.Properties.Aidl.Libs) > 0 &&
+		(len(compiler.Properties.Aidl.Include_dirs) > 0 || len(compiler.Properties.Aidl.Local_include_dirs) > 0) {
+		ctx.ModuleErrorf("aidl.libs and (aidl.include_dirs or aidl.local_include_dirs) can't be set at the same time. For aidl headers, please only use aidl.libs prop")
+	}
+
 	if compiler.hasAidl(deps) {
 		flags.aidlFlags = append(flags.aidlFlags, compiler.Properties.Aidl.Flags...)
 		if len(compiler.Properties.Aidl.Local_include_dirs) > 0 {
@@ -594,8 +599,14 @@
 		}
 		flags.aidlFlags = append(flags.aidlFlags, "--min_sdk_version="+aidlMinSdkVersion)
 
-		flags.Local.CommonFlags = append(flags.Local.CommonFlags,
-			"-I"+android.PathForModuleGen(ctx, "aidl").String())
+		if compiler.hasSrcExt(".aidl") {
+			flags.Local.CommonFlags = append(flags.Local.CommonFlags,
+				"-I"+android.PathForModuleGen(ctx, "aidl").String())
+		}
+		if len(deps.AidlLibraryInfos) > 0 {
+			flags.Local.CommonFlags = append(flags.Local.CommonFlags,
+				"-I"+android.PathForModuleGen(ctx, "aidl_library").String())
+		}
 	}
 
 	if compiler.hasSrcExt(".rscript") || compiler.hasSrcExt(".fs") {
diff --git a/cc/gen.go b/cc/gen.go
index dbb9560..b15f164 100644
--- a/cc/gen.go
+++ b/cc/gen.go
@@ -107,7 +107,14 @@
 	return ret
 }
 
-func genAidl(ctx android.ModuleContext, rule *android.RuleBuilder, aidlFile android.Path, aidlFlags string) (cppFile android.OutputPath, headerFiles android.Paths) {
+func genAidl(
+	ctx android.ModuleContext,
+	rule *android.RuleBuilder,
+	outDirBase string,
+	aidlFile android.Path,
+	aidlHdrs android.Paths,
+	aidlFlags string,
+) (cppFile android.OutputPath, headerFiles android.Paths) {
 	aidlPackage := strings.TrimSuffix(aidlFile.Rel(), aidlFile.Base())
 	baseName := strings.TrimSuffix(aidlFile.Base(), aidlFile.Ext())
 	shortName := baseName
@@ -119,7 +126,7 @@
 		shortName = strings.TrimPrefix(baseName, "I")
 	}
 
-	outDir := android.PathForModuleGen(ctx, "aidl")
+	outDir := android.PathForModuleGen(ctx, outDirBase)
 	cppFile = outDir.Join(ctx, aidlPackage, baseName+".cpp")
 	depFile := outDir.Join(ctx, aidlPackage, baseName+".cpp.d")
 	headerI := outDir.Join(ctx, aidlPackage, baseName+".h")
@@ -128,6 +135,8 @@
 
 	cmd := rule.Command()
 	cmd.BuiltTool("aidl-cpp").
+		// libc++ is default stl for aidl-cpp (a cc_binary_host module)
+		ImplicitTool(ctx.Config().HostCcSharedLibPath(ctx, "libc++")).
 		FlagWithDepFile("-d", depFile).
 		Flag("--ninja").
 		Flag(aidlFlags).
@@ -140,6 +149,10 @@
 			headerBp,
 		})
 
+	if aidlHdrs != nil {
+		cmd.Implicits(aidlHdrs)
+	}
+
 	return cppFile, android.Paths{
 		headerI,
 		headerBn,
@@ -283,14 +296,19 @@
 	ctx android.ModuleContext,
 	aidlLibraryInfos []aidl_library.AidlLibraryInfo,
 	srcFiles android.Paths,
-	buildFlags builderFlags) (android.Paths, android.Paths, generatedSourceInfo) {
+	buildFlags builderFlags,
+) (android.Paths, android.Paths, generatedSourceInfo) {
 
 	var info generatedSourceInfo
 
 	var deps android.Paths
 	var rsFiles android.Paths
 
+	// aidlRule supports compiling aidl files from srcs prop while aidlLibraryRule supports
+	// compiling aidl files from aidl_library modules specified in aidl.libs prop.
+	// The rules are separated so that they don't wipe out the other's outputDir
 	var aidlRule *android.RuleBuilder
+	var aidlLibraryRule *android.RuleBuilder
 
 	var yaccRule_ *android.RuleBuilder
 	yaccRule := func() *android.RuleBuilder {
@@ -331,7 +349,14 @@
 					android.PathForModuleGen(ctx, "aidl.sbox.textproto"))
 			}
 			baseDir := strings.TrimSuffix(srcFile.String(), srcFile.Rel())
-			cppFile, aidlHeaders := genAidl(ctx, aidlRule, srcFile, buildFlags.aidlFlags+" -I"+baseDir)
+			cppFile, aidlHeaders := genAidl(
+				ctx,
+				aidlRule,
+				"aidl",
+				srcFile,
+				nil,
+				buildFlags.aidlFlags+" -I"+baseDir,
+			)
 			srcFiles[i] = cppFile
 
 			info.aidlHeaders = append(info.aidlHeaders, aidlHeaders...)
@@ -354,13 +379,21 @@
 	}
 
 	for _, aidlLibraryInfo := range aidlLibraryInfos {
+		if aidlLibraryRule == nil {
+			aidlLibraryRule = android.NewRuleBuilder(pctx, ctx).Sbox(
+				android.PathForModuleGen(ctx, "aidl_library"),
+				android.PathForModuleGen(ctx, "aidl_library.sbox.textproto"),
+			).SandboxInputs()
+		}
 		for _, aidlSrc := range aidlLibraryInfo.Srcs {
-			if aidlRule == nil {
-				// TODO(b/279960133): Sandbox inputs to ensure aidl headers are explicitly specified
-				aidlRule = android.NewRuleBuilder(pctx, ctx).Sbox(android.PathForModuleGen(ctx, "aidl"),
-					android.PathForModuleGen(ctx, "aidl.sbox.textproto"))
-			}
-			cppFile, aidlHeaders := genAidl(ctx, aidlRule, aidlSrc, buildFlags.aidlFlags)
+			cppFile, aidlHeaders := genAidl(
+				ctx,
+				aidlLibraryRule,
+				"aidl_library",
+				aidlSrc,
+				aidlLibraryInfo.Hdrs.ToList(),
+				buildFlags.aidlFlags,
+			)
 
 			srcFiles = append(srcFiles, cppFile)
 			info.aidlHeaders = append(info.aidlHeaders, aidlHeaders...)
@@ -375,6 +408,10 @@
 		aidlRule.Build("aidl", "gen aidl")
 	}
 
+	if aidlLibraryRule != nil {
+		aidlLibraryRule.Build("aidl_library", "gen aidl_library")
+	}
+
 	if yaccRule_ != nil {
 		yaccRule_.Build("yacc", "gen yacc")
 	}
diff --git a/cc/library.go b/cc/library.go
index 313a1ee..d5f5b40 100644
--- a/cc/library.go
+++ b/cc/library.go
@@ -2113,8 +2113,14 @@
 	// Optionally export aidl headers.
 	if Bool(library.Properties.Aidl.Export_aidl_headers) {
 		if library.baseCompiler.hasAidl(deps) {
-			dir := android.PathForModuleGen(ctx, "aidl")
-			library.reexportDirs(dir)
+			if library.baseCompiler.hasSrcExt(".aidl") {
+				dir := android.PathForModuleGen(ctx, "aidl")
+				library.reexportDirs(dir)
+			}
+			if len(deps.AidlLibraryInfos) > 0 {
+				dir := android.PathForModuleGen(ctx, "aidl_library")
+				library.reexportDirs(dir)
+			}
 
 			library.reexportDeps(library.baseCompiler.aidlOrderOnlyDeps...)
 			library.addExportedGeneratedHeaders(library.baseCompiler.aidlHeaders...)