A linear regulator with indirect leakage compensation is presented. The regulator has a pass device coupled between an input voltage and an output node, a feedback loop for controlling the pass device based on a reference voltage and a feedback voltage that depends on an output voltage, an off-state device that is kept in the off-state, and a leakage compensation circuit for sinking a leakage compensation current from the output node, in dependence on a leakage current of the off-state device. The off-state device is coupled between the leakage compensation circuit and an intermediate voltage level of the linear regulator. The intermediate voltage level is a voltage level between the input voltage level and ground, with a magnitude of the intermediate voltage level being smaller than a magnitude of the input voltage level. A corresponding method of operating a linear regulator with leakage compensation is presented.