diff --git a/docs/adr/1769-state-md-transition-module.md b/docs/adr/1769-state-md-transition-module.md
index 7751fefcc..8e60714f1 100644
--- a/docs/adr/1769-state-md-transition-module.md
+++ b/docs/adr/1769-state-md-transition-module.md
@@ -212,6 +212,6 @@ alongside, leave callbacks — parallel worlds don't converge (ADR-857's failure
 | 2 | `advancePlan` | #1782 | — |
 | 3 | `completePhase` + `phase.cts:1770` | #1784 | — |
 | 4 | `plannedPhase` + `milestoneSwitch` | #1786 | — |
-| 5 | `milestoneComplete` + `milestone.cts:352` | TBD | — |
+| 5 | `milestoneComplete` + `milestone.cts:352` | #1789 | — |
 | 6 | `patch` | TBD | #1743, #1695 |
 | 7 | `sync`, `prune`, `update` | TBD | #1760, #1761 |
diff --git a/gsd-core/bin/lib/state-transition.cjs b/gsd-core/bin/lib/state-transition.cjs
index 704d7bc4a..4569d1fc9 100644
--- a/gsd-core/bin/lib/state-transition.cjs
+++ b/gsd-core/bin/lib/state-transition.cjs
@@ -123,6 +123,8 @@ function transitionCore(content, intent, deps) {
             return plannedPhaseCore(content, intent, deps);
         case 'milestoneSwitch':
             return milestoneSwitchCore(content, intent, deps);
+        case 'milestoneComplete':
+            return milestoneCompleteCore(content, intent, deps);
     }
 }
 // ----------------------------------------------------------------------------
@@ -814,3 +816,91 @@ function milestoneSwitchCore(content, intent, deps) {
     const assembled = `---\n${yamlStr}\n---\n\n${newBody.replace(/^\n+/, '')}`;
     return { content: assembled, updated };
 }
+// ----------------------------------------------------------------------------
+// milestoneComplete — intent implementation (Phase 5)
+// ----------------------------------------------------------------------------
+/**
+ * Apply a `milestoneComplete` transition to STATE.md content.
+ *
+ * Migrates the STATE.md write path inside `cmdMilestoneComplete` (milestone.cts)
+ * onto the substrate. Owns the closure write: Status (`<version> milestone
+ * complete`), Last Activity, Last Activity Description, a ## Current Position
+ * reset to the "Awaiting next milestone" state, and a ## Operator Next Steps
+ * reset pointing at the next-milestone command.
+ *
+ * The adapter (`cmdMilestoneComplete`) retains `writeStateMd` (the writer that
+ * owns the lock + steady-state syncStateFrontmatter post-sync) and resolves the
+ * runtime-specific next-milestone slash command, injecting it via
+ * `intent.nextMilestoneCommand` so the core stays pure.
+ *
+ * The two section resets use raw regex (with the pre-seam `allow-adhoc-markdown`
+ * waivers carried from milestone.cts) rather than tokenizeHeadings because the
+ * `## Operator Next Steps` section is non-canonical (not in STATE_MD_SECTIONS)
+ * and the existing behavior + its tests pin the exact regex semantics. A future
+ * collectSection migration (#1372) can swap both to section primitives.
+ *
+ * Behavior is byte-for-byte with the pre-migration milestone.cts:314-353 block.
+ */
+function milestoneCompleteCore(content, intent, deps) {
+    const updated = [];
+    const today = deps.clock.today();
+    const version = intent.version;
+    for (const fmKey of ['status', 'last_activity', 'last_activity_desc']) {
+        const cls = getFieldClassification(fmKey);
+        if (cls === null) {
+            throw new Error(`transitionCore milestoneComplete: frontmatter key ${JSON.stringify(fmKey)} is not in FIELD_CLASSIFICATION; ` +
+                `add a row per ADR-1769 §4 before touching it.`);
+        }
+    }
+    // #1255: body-field replacements operate on body only.
+    const existingFm = extractFrontmatter(content);
+    const hasFrontmatter = Object.keys(existingFm).length > 0;
+    let body = stripFrontmatter(content);
+    const reassemble = (b) => hasFrontmatter
+        ? `---\n${reconstructFrontmatter(existingFm)}\n---\n\n${b}`
+        : b;
+    // Status — `<version> milestone complete`.
+    const statusAfter = (0, state_document_cjs_1.stateReplaceFieldWithFallback)(body, 'Status', null, `${version} milestone complete`);
+    if (statusAfter !== body) {
+        body = statusAfter;
+        updated.push('Status');
+    }
+    // Last Activity.
+    const lastActivityAfter = (0, state_document_cjs_1.stateReplaceFieldWithFallback)(body, 'Last Activity', 'Last activity', today);
+    if (lastActivityAfter !== body) {
+        body = lastActivityAfter;
+        updated.push('Last Activity');
+    }
+    // Last Activity Description.
+    const ladAfter = (0, state_document_cjs_1.stateReplaceFieldWithFallback)(body, 'Last Activity Description', null, `${version} milestone completed and archived`);
+    if (ladAfter !== body) {
+        body = ladAfter;
+        updated.push('Last Activity Description');
+    }
+    // ## Current Position reset — stop resume/progress flows pointing at closed
+    // execution instructions. allow-adhoc-markdown: pre-seam section write-modify;
+    // pending collectSection migration #1372.
+    const positionPattern = /(##\s*Current Position\s*\n)([\s\S]*?)(?=\n##|$)/i;
+    const closedPositionBody = `\nPhase: Milestone ${version} complete\n` +
+        `Plan: —\n` +
+        `Status: Awaiting next milestone\n` +
+        `Last activity: ${today} — Milestone ${version} completed and archived\n\n`;
+    if (positionPattern.test(body)) {
+        body = body.replace(positionPattern, (_m, header) => `${header}${closedPositionBody}`);
+    }
+    else {
+        body = `${body.trimEnd()}\n\n## Current Position\n${closedPositionBody}`;
+    }
+    updated.push('Current Position');
+    // ## Operator Next Steps — normalize stale tails that can persist after close.
+    // allow-adhoc-markdown: pre-seam section write-modify; pending collectSection migration #1372.
+    const operatorPattern = /(##\s*Operator Next Steps\s*\n)([\s\S]*?)(?=\n##|$)/i;
+    if (operatorPattern.test(body)) {
+        body = body.replace(operatorPattern, `$1\n- Start the next milestone with ${intent.nextMilestoneCommand}\n\n`);
+    }
+    else {
+        body = `${body.trimEnd()}\n\n## Operator Next Steps\n\n- Start the next milestone with ${intent.nextMilestoneCommand}\n`;
+    }
+    updated.push('Operator Next Steps');
+    return { content: reassemble(body), updated };
+}
diff --git a/src/milestone.cts b/src/milestone.cts
index 2b8e83f9e..7dcfb6fdf 100644
--- a/src/milestone.cts
+++ b/src/milestone.cts
@@ -16,6 +16,8 @@ import frontmatterMod = require('./frontmatter.cjs');
 import stateMod = require('./state.cjs');
 import { platformWriteSync, platformEnsureDir, execGit, retryRenameSync } from './shell-command-projection.cjs';
 import { formatGsdSlash, resolveRuntime } from './runtime-slash.cjs';
+import { realClock } from './clock.cjs';
+import { transitionCore } from './state-transition.cjs';
 // eslint-disable-next-line @typescript-eslint/no-require-imports
 import ioMod = require('./io.cjs');
 const { output, error } = ioMod;
@@ -30,7 +32,7 @@ import coreUtilsMod = require('./core-utils.cjs');
 const { extractOneLinerFromBody } = coreUtilsMod;
 const { planningPaths } = planningWorkspace;
 const { extractFrontmatter } = frontmatterMod;
-const { writeStateMd, stateReplaceFieldWithFallback } = stateMod;
+const { writeStateMd } = stateMod;
 
 interface MilestoneCompleteOptions {
   name?: string;
@@ -311,45 +313,25 @@ function cmdMilestoneComplete(cwd: string, version: string, options: MilestoneCo
     platformWriteSync(milestonesPath, `# Milestones\n\n${milestoneEntry}`);
   }
 
-  // Update STATE.md — keep frontmatter/body semantically aligned after closure
+  // Update STATE.md — keep frontmatter/body semantically aligned after closure.
+  // ADR-1769 Phase 5: dispatches to the STATE.md Transition Module. The closure
+  // write (Status, Last Activity, Last Activity Description, Current Position
+  // reset, Operator Next Steps reset) is the pure `milestoneCompleteCore` in
+  // src/state-transition.cts, backed by the field-classification table. The
+  // runtime-specific next-milestone slash command is resolved here and injected
+  // via the intent so the core stays pure. writeStateMd still owns the lock and
+  // the steady-state syncStateFrontmatter post-sync.
   if (fs.existsSync(statePath)) {
-    let stateContent = fs.readFileSync(statePath, 'utf-8');
-
-    stateContent = stateReplaceFieldWithFallback(stateContent, 'Status', null, `${version} milestone complete`);
-    stateContent = stateReplaceFieldWithFallback(stateContent, 'Last Activity', 'Last activity', today);
-    stateContent = stateReplaceFieldWithFallback(
-      stateContent,
-      'Last Activity Description',
-      null,
-      `${version} milestone completed and archived`,
+    const result = transitionCore(
+      fs.readFileSync(statePath, 'utf-8'),
+      {
+        kind: 'milestoneComplete',
+        version,
+        nextMilestoneCommand: formatGsdSlash('new-milestone', resolveRuntime(cwd)) as string,
+      },
+      { clock: realClock, progressProvider: () => null },
     );
-
-    // Reset Current Position narrative so resume/progress flows do not keep
-    // pointing at closed-phase execution instructions.
-    const positionPattern = /(##\s*Current Position\s*\n)([\s\S]*?)(?=\n##|$)/i; // allow-adhoc-markdown: pre-seam section write-modify in milestone.cts; pending collectSection migration #1372
-    const closedPositionBody =
-      `\nPhase: Milestone ${version} complete\n` +
-      `Plan: —\n` +
-      `Status: Awaiting next milestone\n` +
-      `Last activity: ${today} — Milestone ${version} completed and archived\n\n`;
-    if (positionPattern.test(stateContent)) {
-      stateContent = stateContent.replace(positionPattern, (_m, header: string) => `${header}${closedPositionBody}`);
-    } else {
-      stateContent = `${stateContent.trimEnd()}\n\n## Current Position\n${closedPositionBody}`;
-    }
-
-    // Normalize operator-next-step tails that can become stale after close.
-    const operatorPattern = /(##\s*Operator Next Steps\s*\n)([\s\S]*?)(?=\n##|$)/i; // allow-adhoc-markdown: pre-seam section write-modify in milestone.cts; pending collectSection migration #1372
-    if (operatorPattern.test(stateContent)) {
-      stateContent = stateContent.replace(
-        operatorPattern,
-        `$1\n- Start the next milestone with ${formatGsdSlash('new-milestone', resolveRuntime(cwd)) as string}\n\n`,
-      );
-    } else {
-      stateContent = `${stateContent.trimEnd()}\n\n## Operator Next Steps\n\n- Start the next milestone with ${formatGsdSlash('new-milestone', resolveRuntime(cwd)) as string}\n`;
-    }
-
-    writeStateMd(statePath, stateContent, cwd);
+    writeStateMd(statePath, result.content, cwd);
   }
 
   // Archive phase directories if requested
diff --git a/src/state-transition.cts b/src/state-transition.cts
index 6121f53da..babbcf36f 100644
--- a/src/state-transition.cts
+++ b/src/state-transition.cts
@@ -173,8 +173,14 @@ export type StateTransitionIntent =
       summaryCount: number;
     }
   | { kind: 'plannedPhase'; phaseNumber: string | number; planCount: number | null }
-  | { kind: 'milestoneSwitch'; version: string; name: string };
-// Phases 5–7 add the remaining intent kinds to this discriminated union.
+  | { kind: 'milestoneSwitch'; version: string; name: string }
+  | {
+      kind: 'milestoneComplete';
+      version: string;
+      /** Resolved runtime slash command for the Operator Next Steps hint (e.g. '/gsd:new-milestone'). */
+      nextMilestoneCommand: string;
+    };
+// Phases 6–7 add the remaining intent kinds to this discriminated union.
 
 export type StateTransitionResult = {
   content: string;
@@ -213,6 +219,8 @@ export function transitionCore(
       return plannedPhaseCore(content, intent, deps);
     case 'milestoneSwitch':
       return milestoneSwitchCore(content, intent, deps);
+    case 'milestoneComplete':
+      return milestoneCompleteCore(content, intent, deps);
   }
 }
 
@@ -1010,3 +1018,113 @@ function milestoneSwitchCore(
   const assembled = `---\n${yamlStr}\n---\n\n${newBody.replace(/^\n+/, '')}`;
   return { content: assembled, updated };
 }
+
+// ----------------------------------------------------------------------------
+// milestoneComplete — intent implementation (Phase 5)
+// ----------------------------------------------------------------------------
+
+/**
+ * Apply a `milestoneComplete` transition to STATE.md content.
+ *
+ * Migrates the STATE.md write path inside `cmdMilestoneComplete` (milestone.cts)
+ * onto the substrate. Owns the closure write: Status (`<version> milestone
+ * complete`), Last Activity, Last Activity Description, a ## Current Position
+ * reset to the "Awaiting next milestone" state, and a ## Operator Next Steps
+ * reset pointing at the next-milestone command.
+ *
+ * The adapter (`cmdMilestoneComplete`) retains `writeStateMd` (the writer that
+ * owns the lock + steady-state syncStateFrontmatter post-sync) and resolves the
+ * runtime-specific next-milestone slash command, injecting it via
+ * `intent.nextMilestoneCommand` so the core stays pure.
+ *
+ * The two section resets use raw regex (with the pre-seam `allow-adhoc-markdown`
+ * waivers carried from milestone.cts) rather than tokenizeHeadings because the
+ * `## Operator Next Steps` section is non-canonical (not in STATE_MD_SECTIONS)
+ * and the existing behavior + its tests pin the exact regex semantics. A future
+ * collectSection migration (#1372) can swap both to section primitives.
+ *
+ * Behavior is byte-for-byte with the pre-migration milestone.cts:314-353 block.
+ */
+function milestoneCompleteCore(
+  content: string,
+  intent: { kind: 'milestoneComplete'; version: string; nextMilestoneCommand: string },
+  deps: StateTransitionDeps,
+): StateTransitionResult {
+  const updated: string[] = [];
+  const today = deps.clock.today();
+  const version = intent.version;
+
+  for (const fmKey of ['status', 'last_activity', 'last_activity_desc']) {
+    const cls = getFieldClassification(fmKey);
+    if (cls === null) {
+      throw new Error(
+        `transitionCore milestoneComplete: frontmatter key ${JSON.stringify(fmKey)} is not in FIELD_CLASSIFICATION; ` +
+        `add a row per ADR-1769 §4 before touching it.`,
+      );
+    }
+  }
+
+  // #1255: body-field replacements operate on body only.
+  const existingFm = extractFrontmatter(content) as Record<string, unknown>;
+  const hasFrontmatter = Object.keys(existingFm).length > 0;
+  let body = stripFrontmatter(content);
+  const reassemble = (b: string): string =>
+    hasFrontmatter
+      ? `---\n${reconstructFrontmatter(existingFm as unknown as Frontmatter)}\n---\n\n${b}`
+      : b;
+
+  // Status — `<version> milestone complete`.
+  const statusAfter = stateReplaceFieldWithFallback(body, 'Status', null, `${version} milestone complete`);
+  if (statusAfter !== body) {
+    body = statusAfter;
+    updated.push('Status');
+  }
+
+  // Last Activity.
+  const lastActivityAfter = stateReplaceFieldWithFallback(body, 'Last Activity', 'Last activity', today);
+  if (lastActivityAfter !== body) {
+    body = lastActivityAfter;
+    updated.push('Last Activity');
+  }
+
+  // Last Activity Description.
+  const ladAfter = stateReplaceFieldWithFallback(
+    body,
+    'Last Activity Description',
+    null,
+    `${version} milestone completed and archived`,
+  );
+  if (ladAfter !== body) {
+    body = ladAfter;
+    updated.push('Last Activity Description');
+  }
+
+  // ## Current Position reset — stop resume/progress flows pointing at closed
+  // execution instructions.
+  const positionPattern = /(##\s*Current Position\s*\n)([\s\S]*?)(?=\n##|$)/i; // allow-adhoc-markdown: pre-seam section write-modify carried from milestone.cts; pending collectSection migration #1372
+  const closedPositionBody =
+    `\nPhase: Milestone ${version} complete\n` +
+    `Plan: —\n` +
+    `Status: Awaiting next milestone\n` +
+    `Last activity: ${today} — Milestone ${version} completed and archived\n\n`;
+  if (positionPattern.test(body)) {
+    body = body.replace(positionPattern, (_m, header: string) => `${header}${closedPositionBody}`);
+  } else {
+    body = `${body.trimEnd()}\n\n## Current Position\n${closedPositionBody}`;
+  }
+  updated.push('Current Position');
+
+  // ## Operator Next Steps — normalize stale tails that can persist after close.
+  const operatorPattern = /(##\s*Operator Next Steps\s*\n)([\s\S]*?)(?=\n##|$)/i; // allow-adhoc-markdown: pre-seam section write-modify carried from milestone.cts; pending collectSection migration #1372
+  if (operatorPattern.test(body)) {
+    body = body.replace(
+      operatorPattern,
+      `$1\n- Start the next milestone with ${intent.nextMilestoneCommand}\n\n`,
+    );
+  } else {
+    body = `${body.trimEnd()}\n\n## Operator Next Steps\n\n- Start the next milestone with ${intent.nextMilestoneCommand}\n`;
+  }
+  updated.push('Operator Next Steps');
+
+  return { content: reassemble(body), updated };
+}
diff --git a/tests/state-transition.test.cjs b/tests/state-transition.test.cjs
index 5f2847440..0823b5c28 100644
--- a/tests/state-transition.test.cjs
+++ b/tests/state-transition.test.cjs
@@ -915,3 +915,120 @@ describe('ADR-1769 Phase 4: milestoneSwitch transition — milestone reset', ()
     );
   });
 });
+
+// ADR-1769 Phase 5: milestoneComplete
+
+describe('ADR-1769 Phase 5: milestoneComplete transition — closure write', () => {
+  const deps = { clock: fixedClock, progressProvider: noProgress };
+  const intent = { kind: 'milestoneComplete', version: 'v1.0', nextMilestoneCommand: '/gsd:new-milestone' };
+
+  function preCloseBody() {
+    return [
+      '# Project State',
+      '',
+      '**Status:** Executing Phase 5',
+      '**Last Activity:** 2026-06-20',
+      '**Last Activity Description:** mid-flight',
+      '',
+      '## Current Position',
+      '',
+      'Phase: 5 — EXECUTING',
+      'Plan: 2 of 3',
+      'Status: Executing Phase 5',
+      'Last activity: 2026-06-20 — running',
+      '',
+      '## Operator Next Steps',
+      '',
+      '- Re-run /gsd:complete-milestone v1.0',
+      '',
+    ].join('\n');
+  }
+
+  test('Status becomes "<version> milestone complete"', () => {
+    const result = transitionCore(preCloseBody(), intent, deps);
+    assert.strictEqual(stateExtractField(result.content, 'Status'), 'v1.0 milestone complete');
+    assert.ok(result.updated.includes('Status'));
+  });
+
+  test('Last Activity is refreshed to clock.today()', () => {
+    const result = transitionCore(preCloseBody(), intent, deps);
+    assert.strictEqual(stateExtractField(result.content, 'Last Activity'), '2026-06-27');
+  });
+
+  test('Last Activity Description carries the archived narrative', () => {
+    const result = transitionCore(preCloseBody(), intent, deps);
+    assert.strictEqual(
+      stateExtractField(result.content, 'Last Activity Description'),
+      'v1.0 milestone completed and archived',
+    );
+  });
+
+  test('Current Position resets to "Awaiting next milestone" with archived narrative', () => {
+    const result = transitionCore(preCloseBody(), intent, deps);
+    assert.ok(/Phase: Milestone v1\.0 complete/.test(result.content));
+    assert.ok(/Status: Awaiting next milestone/.test(result.content));
+    assert.ok(/Last activity: 2026-06-27 — Milestone v1\.0 completed and archived/.test(result.content));
+    assert.ok(result.updated.includes('Current Position'));
+  });
+
+  test('Operator Next Steps is rewritten to point at the next-milestone command', () => {
+    const result = transitionCore(preCloseBody(), intent, deps);
+    assert.ok(/## Operator Next Steps/.test(result.content));
+    assert.ok(/- Start the next milestone with \/gsd:new-milestone/.test(result.content));
+    // The stale prior instruction must be gone.
+    assert.ok(!/Re-run \/gsd:complete-milestone/.test(result.content),
+      'stale Operator Next Steps tail must be replaced');
+  });
+
+  test('Operator Next Steps section is inserted when absent', () => {
+    const input = [
+      '# Project State',
+      '',
+      '**Status:** Executing Phase 5',
+      '**Last Activity:** 2026-06-20',
+      '**Last Activity Description:** mid',
+      '',
+      '## Current Position',
+      '',
+      'Phase: 5 — EXECUTING',
+      'Status: Executing Phase 5',
+      '',
+    ].join('\n');
+    const result = transitionCore(input, intent, deps);
+    assert.ok(/## Operator Next Steps/.test(result.content));
+    assert.ok(/- Start the next milestone with \/gsd:new-milestone/.test(result.content));
+  });
+
+  test('Current Position section is inserted when absent', () => {
+    const input = '# Project State\n\n**Status:** Executing\n**Last Activity:** 2026-06-20\n';
+    const result = transitionCore(input, intent, deps);
+    assert.ok(/## Current Position/.test(result.content));
+    assert.ok(/Status: Awaiting next milestone/.test(result.content));
+  });
+
+  test('frontmatter is preserved across the closure write (#1255)', () => {
+    const input = [
+      '---',
+      'status: executing',
+      'milestone: v1.0',
+      '---',
+      '',
+      '# Project State',
+      '',
+      '**Status:** Executing Phase 5',
+      '**Last Activity:** 2026-06-20',
+      '**Last Activity Description:** mid',
+      '',
+      '## Current Position',
+      '',
+      'Phase: 5 — EXECUTING',
+      'Status: Executing Phase 5',
+      '',
+    ].join('\n');
+    const result = transitionCore(input, intent, deps);
+    // Body Status must be the closure value, not the YAML status key.
+    assert.strictEqual(stateExtractField(result.content, 'Status'), 'v1.0 milestone complete');
+    assert.ok(/^---\r?\n[\s\S]*?\r?\n---/.test(result.content), 'frontmatter block preserved');
+    assert.ok(/^milestone: v1\.0/m.test(result.content), 'frontmatter milestone preserved');
+  });
+});