diff --git a/repository/filepicker.js b/repository/filepicker.js
index 5c5f0fa2fb471..e989e4304d53b 100644
--- a/repository/filepicker.js
+++ b/repository/filepicker.js
@@ -1224,6 +1224,7 @@ M.core_filepicker.init = function(Y, options) {
             var client_id = this.options.client_id;
             var selectnode = this.selectnode;
             var getfile = selectnode.one('.fp-select-confirm');
+            var filePickerHelper = this;
             // bind labels with corresponding inputs
             selectnode.all('.fp-saveas,.fp-linktype-2,.fp-linktype-1,.fp-linktype-4,fp-linktype-8,.fp-setauthor,.fp-setlicense').each(function (node) {
                 node.all('label').set('for', node.one('input,select').generateID());
@@ -1239,6 +1240,28 @@ M.core_filepicker.init = function(Y, options) {
                         node.addClassIf('uneditable', !allowinputs);
                         node.all('input,select').set('disabled', allowinputs?'':'disabled');
                     });
+
+                    // If the link to the file is selected, only then.
+                    // Remember: this is not to be done for all repos.
+                    // Only for those repos where the filereferencewarning is set.
+                    // The value 4 represents FILE_REFERENCE here.
+                    if (e.currentTarget.get('value') === '4') {
+                        var filereferencewarning = filePickerHelper.active_repo.filereferencewarning;
+                        if (filereferencewarning) {
+                            var fileReferenceNode = e.currentTarget.ancestor('.fp-linktype-4');
+                            var fileReferenceWarningNode = Y.Node.create('<div/>').
+                                addClass('alert alert-warning px-3 py-1 my-1 small').
+                                setAttrs({role: 'alert'}).
+                                setContent(filereferencewarning);
+                            fileReferenceNode.append(fileReferenceWarningNode);
+                        }
+                    } else {
+                        var fileReferenceInput = selectnode.one('.fp-linktype-4 input');
+                        var fileReferenceWarningNode = fileReferenceInput.ancestor('.fp-linktype-4').one('.alert-warning');
+                        if (fileReferenceWarningNode) {
+                            fileReferenceWarningNode.remove();
+                        }
+                    }
                 }
             };
             selectnode.all('.fp-linktype-2,.fp-linktype-1,.fp-linktype-4,.fp-linktype-8').each(function (node) {
@@ -1574,6 +1597,8 @@ M.core_filepicker.init = function(Y, options) {
             this.active_repo.message = (data.message || '');
             this.active_repo.help = data.help?data.help:null;
             this.active_repo.manage = data.manage?data.manage:null;
+            // Warning message related to the file reference option, if applicable to the given repository.
+            this.active_repo.filereferencewarning = data.filereferencewarning ? data.filereferencewarning : null;
             this.print_header();
         },
         print_login: function(data) {
diff --git a/repository/nextcloud/lang/en/repository_nextcloud.php b/repository/nextcloud/lang/en/repository_nextcloud.php
index cca3992afca14..3375095c448e3 100644
--- a/repository/nextcloud/lang/en/repository_nextcloud.php
+++ b/repository/nextcloud/lang/en/repository_nextcloud.php
@@ -62,3 +62,6 @@
 $string['noclientconnection'] = 'The OAuth clients could not be connected.';
 $string['pathnotcreated'] = 'Folder path {$a} could not be created in the system account.';
 $string['endpointnotdefined'] = 'Endpoint {$a} not defined.';
+
+// Warnings.
+$string['externalpubliclinkwarning'] = '<b>Warning:</b> This file will become public.';
diff --git a/repository/nextcloud/lib.php b/repository/nextcloud/lib.php
index 62f38c0a1e440..5e4dce0418d09 100644
--- a/repository/nextcloud/lib.php
+++ b/repository/nextcloud/lib.php
@@ -92,6 +92,12 @@ class repository_nextcloud extends repository {
      */
     private $controlledlinkfoldername;
 
+    /**
+     * Curl instance that can be used to fetch file from nextcloud instance.
+     * @var curl
+     */
+    private $curl;
+
     /**
      * repository_nextcloud constructor.
      *
@@ -143,6 +149,7 @@ public function __construct($repositoryid, $context = SYSCONTEXTID, $options = a
         }
 
         $this->ocsclient = new ocs_client($this->get_user_oauth_client());
+        $this->curl = new curl();
     }
 
     /**
@@ -291,6 +298,7 @@ public function get_listing($path='', $page = '') {
      *
      */
     public function get_link($url) {
+        // Create a read only public link, remember no update possible in this file/folder.
         $ocsparams = [
             'path' => $url,
             'shareType' => ocs_client::SHARE_TYPE_PUBLIC,
@@ -319,9 +327,16 @@ public function get_link($url) {
      * This method does not do any translation of the file source.
      *
      * @param string $source source of the file, returned by repository as 'source' and received back from user (not cleaned)
-     * @return string file reference, ready to be stored
+     * @return string file reference, ready to be stored or json encoded string for public link reference
      */
     public function get_file_reference($source) {
+        $usefilereference = optional_param('usefilereference', false, PARAM_BOOL);
+        if ($usefilereference) {
+            return json_encode([
+                'type' => 'FILE_REFERENCE',
+                'link' => $this->get_link($source),
+            ]);
+        }
         // The simple relative path to the file is enough.
         return $source;
     }
@@ -420,6 +435,12 @@ public function send_file($storedfile, $lifetime=null , $filter=0, $forcedownloa
         $repositoryname = $this->get_name();
         $reference = json_decode($storedfile->get_reference());
 
+        // If the file is a reference which means its a public link in nextcloud.
+        if ($reference->type === 'FILE_REFERENCE') {
+            // This file points to the public link just fetch the latest one from nextcloud repo.
+            redirect($reference->link);
+        }
+
         // 1. assure the client and user is logged in.
         if (empty($this->client) || $this->get_system_oauth_client() === false || $this->get_system_ocs_client() === null) {
             $details = get_string('contactadminwith', 'repository_nextcloud',
@@ -751,10 +772,10 @@ public function supported_returntypes() {
             } else if ($setting === 'external') {
                 return FILE_CONTROLLED_LINK;
             } else {
-                return FILE_CONTROLLED_LINK | FILE_INTERNAL;
+                return FILE_CONTROLLED_LINK | FILE_INTERNAL | FILE_REFERENCE;
             }
         } else {
-            return FILE_INTERNAL;
+            return FILE_INTERNAL | FILE_REFERENCE;
         }
     }
 
@@ -866,6 +887,7 @@ private function get_listing_prepare_response($path) {
             'defaultreturntype' => $this->default_returntype(),
             'manage' => $this->issuer->get('baseurl'), // Provide button to go into file management interface quickly.
             'list' => array(), // Contains all file/folder information and is required to build the file/folder tree.
+            'filereferencewarning' => get_string('externalpubliclinkwarning', 'repository_nextcloud'),
         ];
 
         // If relative path is a non-top-level path, calculate all its parents' paths.
@@ -909,4 +931,65 @@ public function get_reference_details($reference, $filestatus = 0) {
 
         return $path;
     }
+
+    /**
+     * Synchronize the external file if there is an update happened to it.
+     *
+     * If the file has been updated in the nextcloud instance, this method
+     * would take care of the file we copy into the moodle file pool.
+     *
+     * The call to this method reaches from stored_file::sync_external_file()
+     *
+     * @param stored_file $file
+     * @return bool true if synced successfully else false if not ready to sync or reference link not set
+     */
+    public function sync_reference(stored_file $file):bool {
+        global $CFG;
+
+        if ($file->get_referencelastsync() + DAYSECS > time()) {
+            // Synchronize once per day.
+            return false;
+        }
+
+        $reference = json_decode($file->get_reference());
+
+        if (!isset($reference->link)) {
+            return false;
+        }
+
+        $url = $reference->link;
+        if (file_extension_in_typegroup($file->get_filepath() . $file->get_filename(), 'web_image')) {
+            $saveas = $this->prepare_file(uniqid());
+            try {
+                $result = $this->curl->download_one($url, [], [
+                    'filepath' => $saveas,
+                    'timeout' => $CFG->repositorysyncimagetimeout,
+                    'followlocation' => true,
+                ]);
+
+                $info = $this->curl->get_info();
+
+                if ($result === true && isset($info['http_code']) && $info['http_code'] === 200) {
+                    $file->set_synchronised_content_from_file($saveas);
+                    return true;
+                }
+            } catch (Exception $e) {
+                // If the download fails lets download with get().
+                $this->curl->get($url, null, ['timeout' => $CFG->repositorysyncimagetimeout, 'followlocation' => true, 'nobody' => true]);
+                $info = $this->curl->get_info();
+
+                if (isset($info['http_code']) && $info['http_code'] === 200 &&
+                    array_key_exists('download_content_length', $info) &&
+                    $info['download_content_length'] >= 0) {
+                        $filesize = (int)$info['download_content_length'];
+                        $file->set_synchronized(null, $filesize);
+                        return true;
+                }
+
+                $file->set_missingsource();
+                return true;
+            }
+        }
+        return false;
+    }
 }
diff --git a/repository/nextcloud/tests/lib_test.php b/repository/nextcloud/tests/lib_test.php
index cf6fe64f5a16f..0554fecaf55ba 100644
--- a/repository/nextcloud/tests/lib_test.php
+++ b/repository/nextcloud/tests/lib_test.php
@@ -623,12 +623,12 @@ public function test_initiate_webdavclient() {
 
     /**
      * Test supported_returntypes.
-     * FILE_INTERNAL when no system account is connected.
-     * FILE_INTERNAL | FILE_CONTROLLED_LINK when a system account is connected.
+     * FILE_INTERNAL | FILE_REFERENCE when no system account is connected.
+     * FILE_INTERNAL | FILE_CONTROLLED_LINK | FILE_REFERENCE when a system account is connected.
      */
     public function test_supported_returntypes() {
         global $DB;
-        $this->assertEquals(FILE_INTERNAL, $this->repo->supported_returntypes());
+        $this->assertEquals(FILE_INTERNAL | FILE_REFERENCE, $this->repo->supported_returntypes());
         $dataobject = new stdClass();
         $dataobject->timecreated = time();
         $dataobject->timemodified = time();
@@ -641,12 +641,12 @@ public function test_supported_returntypes() {
 
         $DB->insert_record('oauth2_system_account', $dataobject);
         // When a system account is registered the file_type FILE_CONTROLLED_LINK is supported.
-        $this->assertEquals(FILE_INTERNAL | FILE_CONTROLLED_LINK,
+        $this->assertEquals(FILE_INTERNAL | FILE_CONTROLLED_LINK | FILE_REFERENCE,
             $this->repo->supported_returntypes());
     }
 
     /**
-     * The reference_file_selected() methode is called every time a FILE_CONTROLLED_LINK is chosen for upload.
+     * The reference_file_selected() method is called every time a FILE_CONTROLLED_LINK is chosen for upload.
      * Since the function is very long the private function are tested separately, and merely the abortion of the
      * function are tested.
      *
@@ -844,6 +844,150 @@ public function test_send_file_errors() {
         $this->repo->send_file('', '', '', '');
     }
 
+    /**
+     * This function provides the data for test_sync_reference
+     *
+     * @return array[]
+     */
+    public function sync_reference_provider():array {
+        return [
+            'referecncelastsync done recently' => [
+                [
+                    'storedfile_record' => [
+                            'contextid' => context_system::instance()->id,
+                            'component' => 'core',
+                            'filearea'  => 'unittest',
+                            'itemid'    => 0,
+                            'filepath'  => '/',
+                            'filename'  => 'testfile.txt',
+                    ],
+                    'storedfile_reference' => json_encode(
+                        [
+                            'type' => 'FILE_REFERENCE',
+                            'link' => 'https://test.local/fakelink/',
+                            'usesystem' => true,
+                            'referencelastsync' => DAYSECS + time()
+                        ]
+                    ),
+                ],
+                'mockfunctions' => ['get_referencelastsync'],
+                'expectedresult' => false
+            ],
+            'file without link' => [
+                [
+                    'storedfile_record' => [
+                        'contextid' => context_system::instance()->id,
+                        'component' => 'core',
+                        'filearea'  => 'unittest',
+                        'itemid'    => 0,
+                        'filepath'  => '/',
+                        'filename'  => 'testfile.txt',
+                    ],
+                    'storedfile_reference' => json_encode(
+                        [
+                            'type' => 'FILE_REFERENCE',
+                            'usesystem' => true,
+                        ]
+                    ),
+                ],
+                'mockfunctions' => [],
+                'expectedresult' => false
+            ],
+            'file extenstion to exclude' => [
+                [
+                    'storedfile_record' => [
+                        'contextid' => context_system::instance()->id,
+                        'component' => 'core',
+                        'filearea'  => 'unittest',
+                        'itemid'    => 0,
+                        'filepath'  => '/',
+                        'filename'  => 'testfile.txt',
+                    ],
+                    'storedfile_reference' => json_encode(
+                        [
+                            'link' => 'https://test.local/fakelink/',
+                            'type' => 'FILE_REFERENCE',
+                            'usesystem' => true,
+                        ]
+                    ),
+                ],
+                'mockfunctions' => [],
+                'expectedresult' => false
+            ],
+            'file extenstion for image' => [
+                [
+                    'storedfile_record' => [
+                        'contextid' => context_system::instance()->id,
+                        'component' => 'core',
+                        'filearea'  => 'unittest',
+                        'itemid'    => 0,
+                        'filepath'  => '/',
+                        'filename'  => 'testfile.png',
+                    ],
+                    'storedfile_reference' => json_encode(
+                        [
+                            'link' => 'https://test.local/fakelink/',
+                            'type' => 'FILE_REFERENCE',
+                            'usesystem' => true,
+                        ]
+                    ),
+                    'mock_curl' => true,
+                ],
+                'mockfunctions' => [''],
+                'expectedresult' => true
+            ],
+        ];
+    }
+
+    /**
+     * Testing sync_reference
+     *
+     * @dataProvider sync_reference_provider
+     * @param array $storedfileargs
+     * @param array $storedfilemethodsmock
+     * @param bool $expectedresult
+     * @return void
+     */
+    public function test_sync_reference(array $storedfileargs, $storedfilemethodsmock, bool $expectedresult):void {
+        $this->resetAfterTest(true);
+
+        if (isset($storedfilemethodsmock[0])) {
+            $storedfile = $this->createMock(stored_file::class);
+
+            if ($storedfilemethodsmock[0] === 'get_referencelastsync') {
+                if (!$expectedresult) {
+                    $storedfile->method('get_referencelastsync')->willReturn(DAYSECS + time());
+                }
+            } else {
+                $storedfile->method('get_referencelastsync')->willReturn(null);
+            }
+
+            $storedfile->method('get_reference')->willReturn($storedfileargs['storedfile_reference']);
+            $storedfile->method('get_filepath')->willReturn($storedfileargs['storedfile_record']['filepath']);
+            $storedfile->method('get_filename')->willReturn($storedfileargs['storedfile_record']['filename']);
+
+            if ((isset($storedfileargs['mock_curl']) && $storedfileargs)) {
+                // Lets mock curl, else it would not serve the purpose here.
+                $curl = $this->createMock(curl::class);
+                $curl->method('download_one')->willReturn(true);
+                $curl->method('get_info')->willReturn(['http_code' => 200]);
+
+                $reflectionproperty = new \ReflectionProperty($this->repo, 'curl');
+                $reflectionproperty->setAccessible(true);
+                $reflectionproperty->setValue($this->repo, $curl);
+            }
+        } else {
+            $fs = get_file_storage();
+            $storedfile = $fs->create_file_from_reference(
+                $storedfileargs['storedfile_record'],
+                $this->repo->id,
+                $storedfileargs['storedfile_reference']);
+        }
+
+        $actualresult = $this->repo->sync_reference($storedfile);
+        $this->assertEquals($expectedresult, $actualresult);
+    }
+
     /**
      * Helper method, which inserts a given mock value into the repository_nextcloud object.
      *
@@ -879,6 +1023,8 @@ protected function get_initialised_return_array() {
         $ret['defaultreturntype'] = FILE_INTERNAL;
         $ret['list'] = array();
 
+        $ret['filereferencewarning'] = get_string('externalpubliclinkwarning', 'repository_nextcloud');
+
         return $ret;
     }
 }