diff --git a/docs/resources/log.config b/docs/resources/log.config
index 5c263efe22..f36fcb1914 100644
--- a/docs/resources/log.config
+++ b/docs/resources/log.config
@@ -1,21 +1,15 @@
 [loggers]
-keys=root,modelLogger
+keys=root
 
 [handlers]
-keys=consoleHandler
+keys=consoleHandler,errorFileHandler
 
 [formatters]
 keys=fullFormatter
 
 [logger_root]
 level=INFO
-handlers=consoleHandler
-
-[logger_modelLogger]
-level=DEBUG
-handlers=consoleHandler
-qualname=modelLogger
-propagate=0
+handlers=consoleHandler,errorFileHandler
 
 [handler_consoleHandler]
 class=StreamHandler
@@ -23,5 +17,11 @@ level=DEBUG
 formatter=fullFormatter
 args=(sys.stdout,)
 
+[handler_errorFileHandler]
+class=FileHandler
+level=ERROR
+formatter=fullFormatter
+args=('error.log', 'a')
+
 [formatter_fullFormatter]
 format=%(asctime)s - %(name)s - %(levelname)s - %(message)s
\ No newline at end of file
diff --git a/nvflare/lighter/impl/master_template.yml b/nvflare/lighter/impl/master_template.yml
index e4c4e72fdd..1265d1206e 100644
--- a/nvflare/lighter/impl/master_template.yml
+++ b/nvflare/lighter/impl/master_template.yml
@@ -302,14 +302,14 @@ log_config: |
   keys=root
 
   [handlers]
-  keys=consoleHandler
+  keys=consoleHandler,errorFileHandler
 
   [formatters]
   keys=fullFormatter
 
   [logger_root]
   level=INFO
-  handlers=consoleHandler
+  handlers=consoleHandler,errorFileHandler
 
   [handler_consoleHandler]
   class=StreamHandler
@@ -317,6 +317,12 @@ log_config: |
   formatter=fullFormatter
   args=(sys.stdout,)
 
+  [handler_errorFileHandler]
+  class=FileHandler
+  level=ERROR
+  formatter=fullFormatter
+  args=('error.log', 'a')
+
   [formatter_fullFormatter]
   format=%(asctime)s - %(name)s - %(levelname)s - %(message)s
 
diff --git a/nvflare/private/fed/app/simulator/log.config b/nvflare/private/fed/app/simulator/log.config
index ceadd4c93e..3b85259cfd 100644
--- a/nvflare/private/fed/app/simulator/log.config
+++ b/nvflare/private/fed/app/simulator/log.config
@@ -2,14 +2,14 @@
 keys=root
 
 [handlers]
-keys=consoleHandler
+keys=consoleHandler,errorFileHandler
 
 [formatters]
 keys=fullFormatter
 
 [logger_root]
 level=INFO
-handlers=consoleHandler
+handlers=consoleHandler,errorFileHandler
 
 [handler_consoleHandler]
 class=StreamHandler
@@ -17,5 +17,11 @@ level=DEBUG
 formatter=fullFormatter
 args=(sys.stdout,)
 
+[handler_errorFileHandler]
+class=FileHandler
+level=ERROR
+formatter=fullFormatter
+args=('error.log', 'a')
+
 [formatter_fullFormatter]
 format=%(asctime)s - %(name)s - %(levelname)s - %(message)s
diff --git a/nvflare/private/fed/utils/fed_utils.py b/nvflare/private/fed/utils/fed_utils.py
index 8e807e5fe9..2b3052ee3d 100644
--- a/nvflare/private/fed/utils/fed_utils.py
+++ b/nvflare/private/fed/utils/fed_utils.py
@@ -59,14 +59,45 @@
 from .app_authz import AppAuthzService
 
 
-def add_logfile_handler(log_file):
+def add_logfile_handler(log_file: str):
+    """Adds a log file handler to the root logger.
+
+    The purpose for this is to handle dynamic log file locations.
+
+    If a handler named errorFileHandler is found, it will be used as a template to
+    create a new handler for writing to the error.log file at the same directory as log_file.
+    The original errorFileHandler will be removed and replaced by the new handler.
+
+    Each log file will be rotated when it reaches 20MB.
+
+    Args:
+        log_file (str): log file path
+    """
     root_logger = logging.getLogger()
+    configured_handlers = root_logger.handlers
     main_handler = root_logger.handlers[0]
     file_handler = RotatingFileHandler(log_file, maxBytes=20 * 1024 * 1024, backupCount=10)
     file_handler.setLevel(main_handler.level)
     file_handler.setFormatter(main_handler.formatter)
     root_logger.addHandler(file_handler)
 
+    configured_error_handler = None
+    for handler in configured_handlers:
+        if handler.get_name() == "errorFileHandler":
+            configured_error_handler = handler
+            break
+
+    if not configured_error_handler:
+        return
+
+    error_log_file = os.path.join(os.path.dirname(log_file), "error.log")
+    error_file_handler = RotatingFileHandler(error_log_file, maxBytes=20 * 1024 * 1024, backupCount=10)
+    error_file_handler.setLevel(configured_error_handler.level)
+    error_file_handler.setFormatter(configured_error_handler.formatter)
+
+    root_logger.addHandler(error_file_handler)
+    root_logger.removeHandler(configured_error_handler)
+
 
 def _check_secure_content(site_type: str) -> List[str]:
     """To check the security contents.