diff --git a/.generator/cli.py b/.generator/cli.py
index 0fd97d11c6fe..adc3cc4c242c 100644
--- a/.generator/cli.py
+++ b/.generator/cli.py
@@ -24,6 +24,7 @@
 LIBRARIAN_DIR = "librarian"
 GENERATE_REQUEST_FILE = "generate-request.json"
 SOURCE_DIR = "source"
+OUTPUT_DIR = "output"
 
 
 def _read_json_file(path):
@@ -97,7 +98,6 @@ def _build_bazel_target(bazel_rule):
         subprocess.run(
             command,
             cwd=f"{SOURCE_DIR}/googleapis",
-            capture_output=True,
             text=True,
             check=True,
         )
@@ -106,6 +106,53 @@ def _build_bazel_target(bazel_rule):
         raise ValueError(f"Bazel build for {bazel_rule} rule failed.") from e
 
 
+def _locate_and_extract_artifact(bazel_rule: str, library_id: str):
+    """Finds and extracts the tarball artifact from a Bazel build.
+
+    Args:
+        bazel_rule (str): The Bazel rule that was built.
+        library_id (str): The ID of the library being generated.
+
+    Raises:
+        ValueError: If failed to locate or extract artifact.
+    """
+    try:
+        # 1. Find the bazel-bin output directory.
+        logger.info("Locating Bazel output directory...")
+        info_command = ["bazelisk", "info", "bazel-bin"]
+        result = subprocess.run(
+            info_command,
+            cwd=f"{SOURCE_DIR}/googleapis",
+            text=True,
+            check=True,
+            capture_output=True,
+        )
+        bazel_bin_path = result.stdout.strip()
+
+        # 2. Construct the path to the generated tarball.
+        rule_path, rule_name = bazel_rule.split(":")
+        tarball_name = f"{rule_name}.tar.gz"
+        tarball_path = os.path.join(bazel_bin_path, rule_path.strip("/"), tarball_name)
+        logger.info(f"Found artifact at: {tarball_path}")
+
+        # 3. Create a staging directory.
+        staging_dir = os.path.join(OUTPUT_DIR, "owl-bot-staging", library_id)
+        os.makedirs(staging_dir, exist_ok=True)
+        logger.info(f"Preparing staging directory: {staging_dir}")
+
+        # 4. Extract the artifact.
+        extract_command = ["tar", "-xvf", tarball_path, "--strip-components=1"]
+        subprocess.run(
+            extract_command, cwd=staging_dir, capture_output=True, text=True, check=True
+        )
+        logger.info(f"Artifact {tarball_path} extracted successfully.")
+
+    except Exception as e:
+        raise ValueError(
+            f"Failed to locate or extract artifact for {bazel_rule} rule"
+        ) from e
+
+
 def handle_generate():
     """The main coordinator for the code generation process.
 
@@ -129,6 +176,7 @@ def handle_generate():
             if api_path:
                 bazel_rule = _determine_bazel_rule(api_path)
                 _build_bazel_target(bazel_rule)
+                _locate_and_extract_artifact(bazel_rule, library_id)
 
             logger.info(json.dumps(request_data, indent=2))
     except Exception as e:
diff --git a/.generator/test_cli.py b/.generator/test_cli.py
index a5cd14604c04..f2c4ebe4e706 100644
--- a/.generator/test_cli.py
+++ b/.generator/test_cli.py
@@ -24,6 +24,7 @@
     _read_json_file,
     _determine_bazel_rule,
     _build_bazel_target,
+    _locate_and_extract_artifact,
     handle_generate,
     handle_build,
     handle_configure,
@@ -118,6 +119,52 @@ def test_determine_bazel_rule_command_fails(mocker, caplog):
     assert "Found Bazel rule" not in caplog.text
 
 
+def test_locate_and_extract_artifact_success(mocker, caplog):
+    """
+    Tests that the artifact helper calls the correct sequence of commands.
+    """
+    caplog.set_level(logging.INFO)
+    mock_info_result = MagicMock(stdout="/path/to/bazel-bin\n")
+    mock_tar_result = MagicMock(returncode=0)
+    mocker.patch("cli.subprocess.run", side_effect=[mock_info_result, mock_tar_result])
+    mock_makedirs = mocker.patch("cli.os.makedirs")
+    _locate_and_extract_artifact(
+        "//google/cloud/language/v1:rule-py",
+        "google-cloud-language",
+    )
+
+    assert (
+        "Found artifact at: /path/to/bazel-bin/google/cloud/language/v1/rule-py.tar.gz"
+        in caplog.text
+    )
+    assert (
+        "Preparing staging directory: output/owl-bot-staging/google-cloud-language"
+        in caplog.text
+    )
+    assert (
+        "Artifact /path/to/bazel-bin/google/cloud/language/v1/rule-py.tar.gz extracted successfully"
+        in caplog.text
+    )
+    mock_makedirs.assert_called_once()
+
+
+def test_locate_and_extract_artifact_fails(mocker, caplog):
+    """
+    Tests that an exception is raised if the subprocess command fails.
+    """
+    caplog.set_level(logging.INFO)
+    mocker.patch(
+        "cli.subprocess.run",
+        side_effect=subprocess.CalledProcessError(1, "cmd", stderr="Bazel error"),
+    )
+
+    with pytest.raises(ValueError):
+        _locate_and_extract_artifact(
+            "//google/cloud/language/v1:rule-py",
+            "google-cloud-language",
+        )
+
+
 def test_handle_generate_success(caplog, mock_generate_request_file, mocker):
     """
     Tests the successful execution path of handle_generate.
@@ -129,6 +176,8 @@ def test_handle_generate_success(caplog, mock_generate_request_file, mocker):
     )
     mock_build_target = mocker.patch("cli._build_bazel_target")
 
+    mock_locate_and_extract_artifact = mocker.patch("cli._locate_and_extract_artifact")
+
     handle_generate()
 
     mock_determine_rule.assert_called_once_with("google/cloud/language/v1")