diff --git a/datasets/flwr_datasets/partitioner/__init__.py b/datasets/flwr_datasets/partitioner/__init__.py
index 73d048ddf3f..0d1edbfcb04 100644
--- a/datasets/flwr_datasets/partitioner/__init__.py
+++ b/datasets/flwr_datasets/partitioner/__init__.py
@@ -18,6 +18,7 @@
 from .dirichlet_partitioner import DirichletPartitioner
 from .exponential_partitioner import ExponentialPartitioner
 from .iid_partitioner import IidPartitioner
+from .inner_dirichlet_partitioner import InnerDirichletPartitioner
 from .linear_partitioner import LinearPartitioner
 from .natural_id_partitioner import NaturalIdPartitioner
 from .partitioner import Partitioner
@@ -32,6 +33,7 @@
     "DirichletPartitioner",
     "SizePartitioner",
     "LinearPartitioner",
+    "InnerDirichletPartitioner",
     "SquarePartitioner",
     "ShardPartitioner",
     "ExponentialPartitioner",
diff --git a/datasets/flwr_datasets/partitioner/inner_dirichlet_partitioner.py b/datasets/flwr_datasets/partitioner/inner_dirichlet_partitioner.py
new file mode 100644
index 00000000000..c25a9b059d1
--- /dev/null
+++ b/datasets/flwr_datasets/partitioner/inner_dirichlet_partitioner.py
@@ -0,0 +1,308 @@
+# Copyright 2023 Flower Labs GmbH. All Rights Reserved.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+# ==============================================================================
+"""InnerDirichlet partitioner."""
+import warnings
+from typing import Dict, List, Optional, Union
+
+import numpy as np
+
+import datasets
+from flwr_datasets.common.typing import NDArrayFloat, NDArrayInt
+from flwr_datasets.partitioner.partitioner import Partitioner
+
+
+class InnerDirichletPartitioner(Partitioner):  # pylint: disable=R0902
+    """Partitioner based on Dirichlet distribution.
+
+    Each partition is created based on the Dirichlet distribution, where the
+    probability corresponds to the fractions of samples of specific classes.
+    This process is iterative (sample by sample assignment), where first, the
+    partition ID to which the class will be assigned is chosen (at random, uniformly),
+    and then the class is decided based on the Dirichlet probabilities (note that when
+    a class gets exhausted - no more samples exists to sample from - the probability of
+    sampling this class is set as zero and the remaining probabilities renormalized).
+
+    Implementation based on: Federated Learning Based on Dynamic Regularization
+    (https://arxiv.org/abs/2111.04263).
+
+    Parameters
+    ----------
+    partition_sizes : Union[List[int], NDArrayInt]
+        The sizes of all partitions.
+    partition_by : str
+        Column name of the labels (targets) based on which Dirichlet sampling works.
+    alpha : Union[int, float, List[float], NDArrayFloat]
+        Concentration parameter to the Dirichlet distribution (a single value for
+        symmetric Dirichlet distribution, or a list/NDArray of length equal to the
+        number of unique classes)
+    shuffle: bool
+        Whether to randomize the order of samples. Shuffling applied after the
+        samples assignment to nodes.
+    seed: int
+        Seed used for dataset shuffling. It has no effect if `shuffle` is False.
+
+    Examples
+    --------
+    >>> from flwr_datasets import FederatedDataset
+    >>> from flwr_datasets.partitioner import InnerDirichletPartitioner
+    >>>
+    >>> partitioner = InnerDirichletPartitioner(
+    >>>     partition_sizes=[6_000] * 10, partition_by="label", alpha=0.5
+    >>> )
+    >>> fds = FederatedDataset(dataset="mnist", partitioners={"train": partitioner})
+    >>> partition = fds.load_partition(0)
+    >>> print(partition[0])  # Print the first example
+    """
+
+    def __init__(  # pylint: disable=R0913
+        self,
+        partition_sizes: Union[List[int], NDArrayInt],
+        partition_by: str,
+        alpha: Union[int, float, List[float], NDArrayFloat],
+        shuffle: bool = True,
+        seed: Optional[int] = 42,
+    ) -> None:
+        super().__init__()
+        # Attributes based on the constructor
+        self._partition_sizes = _instantiate_partition_sizes(partition_sizes)
+        self._initial_alpha = alpha
+        self._alpha: Optional[NDArrayFloat] = None
+        self._partition_by = partition_by
+        self._shuffle = shuffle
+        self._seed = seed
+
+        # Utility attributes
+        self._initialized_alpha = False
+        self._rng = np.random.default_rng(seed=self._seed)  # NumPy random generator
+        # The attributes below are determined during the first call to load_partition
+        self._unique_classes: Optional[Union[List[int], List[str]]] = None
+        self._num_unique_classes: Optional[int] = None
+        self._num_partitions = len(self._partition_sizes)
+
+        # self._avg_num_of_samples_per_node: Optional[float] = None
+        self._node_id_to_indices: Dict[int, List[int]] = {}
+        self._node_id_to_indices_determined = False
+
+    def load_partition(self, node_id: int) -> datasets.Dataset:
+        """Load a partition based on the partition index.
+
+        Parameters
+        ----------
+        node_id : int
+            the index that corresponds to the requested partition
+
+        Returns
+        -------
+        dataset_partition : Dataset
+            single partition of a dataset
+        """
+        # The partitioning is done lazily - only when the first partition is
+        # requested. Only the first call creates the indices assignments for all the
+        # partition indices.
+        self._check_num_partitions_correctness_if_needed()
+        self._check_partition_sizes_correctness_if_needed()
+        self._check_the_sum_of_partition_sizes()
+        self._determine_num_unique_classes_if_needed()
+        self._alpha = self._initialize_alpha_if_needed(self._initial_alpha)
+        self._determine_node_id_to_indices_if_needed()
+        return self.dataset.select(self._node_id_to_indices[node_id])
+
+    def _initialize_alpha_if_needed(
+        self, alpha: Union[int, float, List[float], NDArrayFloat]
+    ) -> NDArrayFloat:
+        """Convert alpha to the used format in the code a NDArrayFloat.
+
+        The alpha can be provided in constructor can be in different format for user
+        convenience. The format into which it's transformed here is used throughout the
+        code for computation.
+
+        Parameters
+        ----------
+        alpha : Union[int, float, List[float], NDArrayFloat]
+            Concentration parameter to the Dirichlet distribution
+
+        Returns
+        -------
+        alpha : NDArrayFloat
+            Concentration parameter in a format ready to used in computation.
+        """
+        if self._initialized_alpha:
+            assert self._alpha is not None
+            return self._alpha
+        if isinstance(alpha, int):
+            assert self._num_unique_classes is not None
+            alpha = np.array([float(alpha)], dtype=float).repeat(
+                self._num_unique_classes
+            )
+        elif isinstance(alpha, float):
+            assert self._num_unique_classes is not None
+            alpha = np.array([alpha], dtype=float).repeat(self._num_unique_classes)
+        elif isinstance(alpha, List):
+            if len(alpha) != self._num_unique_classes:
+                raise ValueError(
+                    "When passing alpha as a List, its length needs needs to be "
+                    "of length equal to the number of unique classes."
+                )
+            alpha = np.asarray(alpha)
+        elif isinstance(alpha, np.ndarray):
+            # pylint: disable=R1720
+            if alpha.ndim == 1 and alpha.shape[0] != self._num_unique_classes:
+                raise ValueError(
+                    "When passing alpha as an NDArray, its length needs needs to be "
+                    "of length equal to the number of unique classes."
+                )
+            elif alpha.ndim == 2:
+                alpha = alpha.flatten()
+                if alpha.shape[0] != self._num_unique_classes:
+                    raise ValueError(
+                        "When passing alpha as an NDArray, its length needs needs to be"
+                        " of length equal to the number of unique classes."
+                    )
+        else:
+            raise ValueError("The given alpha format is not supported.")
+        if not (alpha > 0).all():
+            raise ValueError(
+                f"Alpha values should be strictly greater than zero. "
+                f"Instead it'd be converted to {alpha}"
+            )
+        return alpha
+
+    def _determine_node_id_to_indices_if_needed(self) -> None:  # pylint: disable=R0914
+        """Create an assignment of indices to the partition indices."""
+        if self._node_id_to_indices_determined:
+            return
+
+        # Create class priors for the whole partitioning process
+        assert self._alpha is not None
+        class_priors = self._rng.dirichlet(alpha=self._alpha, size=self._num_partitions)
+        targets = np.asarray(self.dataset[self._partition_by])
+        # List representing indices of each class
+        assert self._num_unique_classes is not None
+        idx_list = [np.where(targets == i)[0] for i in range(self._num_unique_classes)]
+        class_sizes = [len(idx_list[i]) for i in range(self._num_unique_classes)]
+
+        client_indices = [
+            np.zeros(self._partition_sizes[cid]).astype(np.int64)
+            for cid in range(self._num_partitions)
+        ]
+
+        # Node id to number of sample left for allocation for that node id
+        node_id_to_left_to_allocate = dict(
+            zip(range(self._num_partitions), self._partition_sizes)
+        )
+
+        not_full_node_ids = list(range(self._num_partitions))
+        while np.sum(list(node_id_to_left_to_allocate.values())) != 0:
+            # Choose a node
+            current_node_id = self._rng.choice(not_full_node_ids)
+            # If current node is full resample a client
+            if node_id_to_left_to_allocate[current_node_id] == 0:
+                # When the node is full, exclude it from the sampling nodes list
+                not_full_node_ids.pop(not_full_node_ids.index(current_node_id))
+                continue
+            node_id_to_left_to_allocate[current_node_id] -= 1
+            # Access the label distribution of the chosen client
+            current_probabilities = class_priors[current_node_id]
+            while True:
+                # curr_class = np.argmax(np.random.uniform() <= curr_prior)
+                curr_class = self._rng.choice(
+                    list(range(self._num_unique_classes)), p=current_probabilities
+                )
+                # Redraw class label if there are no samples left to be allocated from
+                # that class
+                if class_sizes[curr_class] == 0:
+                    # Class got exhausted, set probabilities to 0
+                    class_priors[:, curr_class] = 0
+                    # Renormalize such that the probability sums to 1
+                    row_sums = class_priors.sum(axis=1, keepdims=True)
+                    class_priors = class_priors / row_sums
+                    # Adjust the current_probabilities (it won't sum up to 1 otherwise)
+                    current_probabilities = class_priors[current_node_id]
+                    continue
+                class_sizes[curr_class] -= 1
+                # Store sample index at the empty array cell
+                index = node_id_to_left_to_allocate[current_node_id]
+                client_indices[current_node_id][index] = idx_list[curr_class][
+                    class_sizes[curr_class]
+                ]
+                break
+
+        node_id_to_indices = {
+            cid: client_indices[cid].tolist() for cid in range(self._num_partitions)
+        }
+        # Shuffle the indices if the shuffle is True.
+        # Note that the samples from this partitioning do not necessarily require
+        # shuffling, the order should exhibit consecutive samples.
+        if self._shuffle:
+            for indices in node_id_to_indices.values():
+                # In place shuffling
+                self._rng.shuffle(indices)
+        self._node_id_to_indices = node_id_to_indices
+        self._node_id_to_indices_determined = True
+
+    def _check_num_partitions_correctness_if_needed(self) -> None:
+        """Test num_partitions when the dataset is given (in load_partition)."""
+        if not self._node_id_to_indices_determined:
+            if self._num_partitions > self.dataset.num_rows:
+                raise ValueError(
+                    "The number of partitions needs to be smaller or equal to "
+                    " the number of samples in the dataset."
+                )
+
+    def _check_partition_sizes_correctness_if_needed(self) -> None:
+        """Test partition_sizes when the dataset is given (in load_partition)."""
+        if not self._node_id_to_indices_determined:
+            if sum(self._partition_sizes) > self.dataset.num_rows:
+                raise ValueError(
+                    "The sum of the `partition_sizes` needs to be smaller or equal to "
+                    "the number of samples in the dataset."
+                )
+
+    def _check_num_partitions_greater_than_zero(self) -> None:
+        """Test num_partition left sides correctness."""
+        if not self._num_partitions > 0:
+            raise ValueError("The number of partitions needs to be greater than zero.")
+
+    def _determine_num_unique_classes_if_needed(self) -> None:
+        self._unique_classes = self.dataset.unique(self._partition_by)
+        assert self._unique_classes is not None
+        self._num_unique_classes = len(self._unique_classes)
+
+    def _check_the_sum_of_partition_sizes(self) -> None:
+        if np.sum(self._partition_sizes) != len(self.dataset):
+            warnings.warn(
+                "The sum of the partition_sizes does not sum to the whole "
+                "dataset size. Make sure that is the desired behavior.",
+                stacklevel=1,
+            )
+
+
+def _instantiate_partition_sizes(
+    partition_sizes: Union[List[int], NDArrayInt]
+) -> NDArrayInt:
+    """Transform list to the ndarray of ints if needed."""
+    if isinstance(partition_sizes, List):
+        partition_sizes = np.asarray(partition_sizes)
+    elif isinstance(partition_sizes, np.ndarray):
+        pass
+    else:
+        raise ValueError(
+            f"The type of partition_sizes is incorrect. Given: "
+            f"{type(partition_sizes)}"
+        )
+
+    if not all(partition_sizes >= 0):
+        raise ValueError("The samples numbers must be greater or equal to zero.")
+    return partition_sizes
diff --git a/datasets/flwr_datasets/partitioner/inner_dirichlet_partitioner_test.py b/datasets/flwr_datasets/partitioner/inner_dirichlet_partitioner_test.py
new file mode 100644
index 00000000000..0c5fb502870
--- /dev/null
+++ b/datasets/flwr_datasets/partitioner/inner_dirichlet_partitioner_test.py
@@ -0,0 +1,106 @@
+# Copyright 2023 Flower Labs GmbH. All Rights Reserved.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+# ==============================================================================
+"""Test DirichletPartitioner."""
+# pylint: disable=W0212
+import unittest
+from typing import List, Tuple, Union
+
+from datasets import Dataset
+from flwr_datasets.common.typing import NDArrayFloat, NDArrayInt
+from flwr_datasets.partitioner.inner_dirichlet_partitioner import (
+    InnerDirichletPartitioner,
+)
+
+
+def _dummy_setup(
+    num_rows: int,
+    partition_by: str,
+    partition_sizes: Union[List[int], NDArrayInt],
+    alpha: Union[float, List[float], NDArrayFloat],
+) -> Tuple[Dataset, InnerDirichletPartitioner]:
+    """Create a dummy dataset and partitioner for testing."""
+    data = {
+        partition_by: [i % 3 for i in range(num_rows)],
+        "features": list(range(num_rows)),
+    }
+    dataset = Dataset.from_dict(data)
+    partitioner = InnerDirichletPartitioner(
+        partition_sizes=partition_sizes,
+        alpha=alpha,
+        partition_by=partition_by,
+    )
+    partitioner.dataset = dataset
+    return dataset, partitioner
+
+
+class TestInnerDirichletPartitionerSuccess(unittest.TestCase):
+    """Test InnerDirichletPartitioner used with no exceptions."""
+
+    def test_correct_num_of_partitions(self) -> None:
+        """Test correct number of partitions."""
+        num_rows = 113
+        partition_by = "labels"
+        alpha = 1.0
+        partition_sizes = [20, 20, 30, 43]
+
+        _, partitioner = _dummy_setup(num_rows, partition_by, partition_sizes, alpha)
+        _ = partitioner.load_partition(0)
+        self.assertEqual(
+            len(partitioner._node_id_to_indices.keys()), len(partition_sizes)
+        )
+
+    def test_correct_partition_sizes(self) -> None:
+        """Test correct partition sizes."""
+        num_rows = 113
+        partition_by = "labels"
+        alpha = 1.0
+        partition_sizes = [20, 20, 30, 43]
+
+        _, partitioner = _dummy_setup(num_rows, partition_by, partition_sizes, alpha)
+        _ = partitioner.load_partition(0)
+        sizes_created = [
+            len(indices) for indices in partitioner._node_id_to_indices.values()
+        ]
+        self.assertEqual(sorted(sizes_created), partition_sizes)
+
+
+class TestInnerDirichletPartitionerFailure(unittest.TestCase):
+    """Test InnerDirichletPartitioner failures (exceptions) by incorrect usage."""
+
+    def test_incorrect_shape_of_alpha(self) -> None:
+        """Test the alpha shape not equal to the number of unique classes."""
+        num_rows = 113
+        partition_by = "labels"
+        alpha = [1.0, 1.0]
+        partition_sizes = [20, 20, 30, 43]
+
+        _, partitioner = _dummy_setup(num_rows, partition_by, partition_sizes, alpha)
+        with self.assertRaises(ValueError):
+            _ = partitioner.load_partition(0)
+
+    def test_too_big_sum_of_partition_sizes(self) -> None:
+        """Test sum of partition_sizes greater than the size of the dataset."""
+        num_rows = 113
+        partition_by = "labels"
+        alpha = 1.0
+        partition_sizes = [60, 60, 30, 43]
+
+        _, partitioner = _dummy_setup(num_rows, partition_by, partition_sizes, alpha)
+        with self.assertRaises(ValueError):
+            _ = partitioner.load_partition(0)
+
+
+if __name__ == "__main__":
+    unittest.main()