diff --git a/browser/components/extensions/schemas/chrome_settings_overrides.json b/browser/components/extensions/schemas/chrome_settings_overrides.json
index e0da3e3c2687..96144745f574 100644
--- a/browser/components/extensions/schemas/chrome_settings_overrides.json
+++ b/browser/components/extensions/schemas/chrome_settings_overrides.json
@@ -49,9 +49,18 @@
                     "preprocess": "localize"
                   },
                   "favicon_url": {
-                    "type": "string",
+                    "choices": [
+                      {
+                        "type": "string",
+                        "format": "relativeUrl",
+                        "max_manifest_version": 2
+                      },
+                      {
+                        "type": "string",
+                        "format": "strictRelativeUrl"
+                      }
+                    ],
                     "optional": true,
-                    "format": "relativeUrl",
                     "preprocess": "localize"
                   },
                   "suggest_url": {
diff --git a/browser/components/extensions/test/xpcshell/test_ext_settings_overrides_search.js b/browser/components/extensions/test/xpcshell/test_ext_settings_overrides_search.js
index ea4cdd6534d3..3dd9aeec1fce 100644
--- a/browser/components/extensions/test/xpcshell/test_ext_settings_overrides_search.js
+++ b/browser/components/extensions/test/xpcshell/test_ext_settings_overrides_search.js
@@ -552,3 +552,32 @@ add_task(async function test_extension_allow_http_for_localhost() {
 
   await ext1.unload();
 });
+
+add_task(async function test_search_favicon_mv3() {
+  Services.prefs.setBoolPref("extensions.manifestV3.enabled", true);
+  let normalized = await ExtensionTestUtils.normalizeManifest({
+    manifest_version: 3,
+    chrome_settings_overrides: {
+      search_provider: {
+        name: "HTTP Icon in MV3",
+        search_url: "https://example.org/",
+        favicon_url: "https://example.org/icon.png",
+      },
+    },
+  });
+  Assert.ok(
+    normalized.error.endsWith("must be a relative URL"),
+    "Should have an error"
+  );
+  normalized = await ExtensionTestUtils.normalizeManifest({
+    manifest_version: 3,
+    chrome_settings_overrides: {
+      search_provider: {
+        name: "HTTP Icon in MV3",
+        search_url: "https://example.org/",
+        favicon_url: "/icon.png",
+      },
+    },
+  });
+  Assert.ok(!normalized.error, "Should not have an error");
+});