diff --git a/eng/common/tools.ps1 b/eng/common/tools.ps1
index 5636b5ff9b7..eb134b15753 100644
--- a/eng/common/tools.ps1
+++ b/eng/common/tools.ps1
@@ -719,7 +719,17 @@ function InitializeToolset() {
     $downloadArgs += "--configfile"
     $downloadArgs += $nugetConfig
   }
-  DotNet @downloadArgs
+
+  # 'dotnet package download' fails outright if any source in the repo's NuGet.config is
+  # unavailable (for example a transport feed that was decommissioned after a release). The
+  # Arcade SDK is always published to the public dotnet-eng feed, so if the config-driven
+  # download fails, retry once against that feed directly (which ignores the other sources)
+  # before giving up, so a single dead source doesn't block the build.
+  $downloadExitCode = DotNet -ignoreFailure @downloadArgs
+  if ($downloadExitCode) {
+    Write-Host "Restoring the Arcade SDK from the configured sources failed; retrying from the public dotnet-eng feed."
+    DotNet @downloadArgs --source "https://pkgs.dev.azure.com/dnceng/public/_packaging/dotnet-eng/nuget/v3/index.json"
+  }
 
   $packageDir = Join-Path $nugetPackageCachePath (Join-Path 'microsoft.dotnet.arcade.sdk' $toolsetVersion)
   $packageToolsetDir = Join-Path $packageDir 'toolset'
@@ -848,7 +858,7 @@ function MSBuild() {
 # Executes a dotnet command with arguments passed to the function.
 # Terminates the script if the command fails.
 #
-function DotNet() {
+function DotNet([switch]$ignoreFailure) {
   $dotnetRoot = InitializeDotNetCli -install:$restore
   $dotnetPath = Join-Path $dotnetRoot (GetExecutableFileName 'dotnet')
 
@@ -867,6 +877,12 @@ function DotNet() {
   $exitCode = Exec-Process $dotnetPath $cmdArgs
 
   if ($exitCode -ne 0) {
+    # When -ignoreFailure is set, return the exit code to the caller so it can implement
+    # its own fallback logic instead of terminating the script.
+    if ($ignoreFailure) {
+      return $exitCode
+    }
+
     Write-Host "dotnet command failed with exit code $exitCode. Check errors above." -ForegroundColor Red
 
     if ($ci -and $env:SYSTEM_TEAMPROJECT -ne $null -and !$fromVMR) {
diff --git a/eng/common/tools.sh b/eng/common/tools.sh
index 3d09adab28b..502589a61ee 100755
--- a/eng/common/tools.sh
+++ b/eng/common/tools.sh
@@ -452,7 +452,16 @@ function InitializeToolset {
   if [[ -n "$nuget_config" ]]; then
     download_args+=("--configfile" "$nuget_config")
   fi
-  DotNet "${download_args[@]}"
+
+  # 'dotnet package download' fails outright if any source in the repo's NuGet.config is
+  # unavailable (for example a transport feed that was decommissioned after a release). The
+  # Arcade SDK is always published to the public dotnet-eng feed, so if the config-driven
+  # download fails, retry once against that feed directly (which ignores the other sources)
+  # before giving up, so a single dead source doesn't block the build.
+  if ! DotNet true "${download_args[@]}"; then
+    echo "Restoring the Arcade SDK from the configured sources failed; retrying from the public dotnet-eng feed."
+    DotNet "${download_args[@]}" --source "https://pkgs.dev.azure.com/dnceng/public/_packaging/dotnet-eng/nuget/v3/index.json"
+  fi
 
   local package_dir="$_InitializeNuGetPackageCachePath/microsoft.dotnet.arcade.sdk/$toolset_version"
 
@@ -491,6 +500,15 @@ function StopProcesses {
 }
 
 function DotNet {
+  # When the first argument is 'true' or 'false' it controls the exit behavior on failure:
+  # 'true' returns the dotnet exit code to the caller (so it can implement its own fallback),
+  # while the default terminates the script. Any other first argument is treated as a dotnet argument.
+  local ignore_failure=false
+  if [[ "$1" == 'true' || "$1" == 'false' ]]; then
+    ignore_failure="$1"
+    shift
+  fi
+
   InitializeDotNetCli $restore
 
   local dotnet_path="$_InitializeDotNetCli/dotnet"
@@ -499,6 +517,11 @@ function DotNet {
 
   "$dotnet_path" "$@" || {
     local exit_code=$?
+
+    if [[ "$ignore_failure" == true ]]; then
+      return $exit_code
+    fi
+
     echo "dotnet command failed with exit code $exit_code. Check errors above."
 
     if [[ "$ci" == true && -n ${SYSTEM_TEAMPROJECT:-} && "$from_vmr" != true ]]; then
diff --git a/src/Microsoft.DotNet.Arcade.Sdk/tools/ProjectDefaults.props b/src/Microsoft.DotNet.Arcade.Sdk/tools/ProjectDefaults.props
index 11de5f8aabe..1d06487c851 100644
--- a/src/Microsoft.DotNet.Arcade.Sdk/tools/ProjectDefaults.props
+++ b/src/Microsoft.DotNet.Arcade.Sdk/tools/ProjectDefaults.props
@@ -71,6 +71,14 @@
       {TargetFrameworkDirectory};
       {RawFileName};
     </AssemblySearchPaths>
+
+    <!--
+      Tolerate package sources that are unavailable (e.g. transport feeds that have been
+      decommissioned after a release). Restore falls back to the remaining sources instead
+      of failing outright. Can be overridden by setting RestoreIgnoreFailedSources explicitly.
+      See https://github.com/dotnet/runtime/issues/129694.
+    -->
+    <RestoreIgnoreFailedSources Condition="'$(RestoreIgnoreFailedSources)' == ''">true</RestoreIgnoreFailedSources>
   </PropertyGroup>
 
   <PropertyGroup>