diff --git a/packages/context/src/llm/index.ts b/packages/context/src/llm/index.ts
index 6acec733..4326762e 100644
--- a/packages/context/src/llm/index.ts
+++ b/packages/context/src/llm/index.ts
@@ -37,7 +37,6 @@ export {
   summarizeKtxLlmDebugRequest,
 } from './debug-request-recorder.js';
 export {
-  MANAGED_SENTENCE_TRANSFORMERS_BASE_URL,
   createLocalKtxEmbeddingProviderFromConfig,
   createLocalKtxLlmProviderFromConfig,
   createLocalKtxLlmRuntimeFromConfig,
diff --git a/packages/context/src/llm/local-config.test.ts b/packages/context/src/llm/local-config.test.ts
index 2d3475bc..cfa2e826 100644
--- a/packages/context/src/llm/local-config.test.ts
+++ b/packages/context/src/llm/local-config.test.ts
@@ -5,7 +5,6 @@ import {
   type KtxProjectLlmConfig,
 } from '../project/config.js';
 import {
-  MANAGED_SENTENCE_TRANSFORMERS_BASE_URL,
   createLocalKtxEmbeddingProviderFromConfig,
   createLocalKtxLlmProviderFromConfig,
   resolveLocalKtxEmbeddingConfig,
@@ -151,13 +150,13 @@ describe('local KTX embedding config', () => {
     });
   });
 
-  it('returns null when sentence-transformers base_url is still the unresolved managed sentinel', () => {
+  it('returns null when sentence-transformers has no base_url (managed daemon delegation)', () => {
     const config: KtxProjectEmbeddingConfig = {
       backend: 'sentence-transformers',
       model: 'all-MiniLM-L6-v2',
       dimensions: 384,
       sentenceTransformers: {
-        base_url: MANAGED_SENTENCE_TRANSFORMERS_BASE_URL,
+        base_url: '',
         pathPrefix: '',
       },
     };
diff --git a/packages/context/src/llm/local-config.ts b/packages/context/src/llm/local-config.ts
index b4a41753..56997356 100644
--- a/packages/context/src/llm/local-config.ts
+++ b/packages/context/src/llm/local-config.ts
@@ -22,8 +22,6 @@ interface LocalConfigDeps {
   createAiSdkRuntime?: (deps: { llmProvider: KtxLlmProvider }) => KtxLlmRuntimePort;
 }
 
-export const MANAGED_SENTENCE_TRANSFORMERS_BASE_URL = 'managed:local-embeddings';
-
 function resolveOptional(value: string | undefined, env: NodeJS.ProcessEnv): string | undefined {
   return resolveKtxConfigReference(value, env) || undefined;
 }
@@ -149,7 +147,7 @@ export function resolveLocalKtxEmbeddingConfig(
   }
   if (config.backend === 'sentence-transformers') {
     const baseURL = config.sentenceTransformers?.base_url;
-    if (!baseURL || baseURL === MANAGED_SENTENCE_TRANSFORMERS_BASE_URL) {
+    if (!baseURL) {
       return null;
     }
     return {
diff --git a/packages/context/src/package-exports.test.ts b/packages/context/src/package-exports.test.ts
index ce009cf3..d344dd0b 100644
--- a/packages/context/src/package-exports.test.ts
+++ b/packages/context/src/package-exports.test.ts
@@ -143,7 +143,6 @@ describe('@ktx/context package exports', () => {
     expect(root.assertSearchBackendConformanceCase).toBeTypeOf('function');
     expect(root.assertSearchBackendCapabilities).toBeTypeOf('function');
     expect(root.createLocalKtxEmbeddingProviderFromConfig).toBeTypeOf('function');
-    expect(root.MANAGED_SENTENCE_TRANSFORMERS_BASE_URL).toBe('managed:local-embeddings');
     expect(agent).toBeDefined();
     expect(agent.AgentRunnerService).toBeTypeOf('function');
     expect(root.AgentRunnerService).toBeTypeOf('function');
diff --git a/packages/context/src/project/config.ts b/packages/context/src/project/config.ts
index b639c922..b95f0ce0 100644
--- a/packages/context/src/project/config.ts
+++ b/packages/context/src/project/config.ts
@@ -36,7 +36,7 @@ const vertexProviderSchema = z
 
 const sentenceTransformersSchema = z
   .strictObject({
-    base_url: z.string().default('').describe('Base URL of the sentence-transformers HTTP server. Empty string uses the managed local runtime.'),
+    base_url: z.string().default('').describe('Base URL of the sentence-transformers HTTP server. Leave empty (or omit) to use the project-managed local daemon.'),
     pathPrefix: z.string().optional().describe('Optional URL path prefix prepended to embedding requests.'),
   })
   .describe('Sentence-transformers embedding server configuration.');