diff --git a/.upgradenotes/MDL-83904-2025032008552774.yml b/.upgradenotes/MDL-83904-2025032008552774.yml
new file mode 100644
index 00000000000..61f9a676d57
--- /dev/null
+++ b/.upgradenotes/MDL-83904-2025032008552774.yml
@@ -0,0 +1,10 @@
+issueNumber: MDL-83904
+notes:
+  core_badges:
+    - message: >-
+        The class core_badges_observer in badges/classes/observer.php has been moved to 
+        core_badges\event\observer in badges/classes/event/observer.php. A compatibility 
+        layer has been added to maintain backward compatibility, but direct use of the old 
+        class name is now deprecated. If you've extended or directly used the old class, 
+        you should update your code to use the new namespaced class.
+      type: improved
diff --git a/badges/classes/event/observer.php b/badges/classes/event/observer.php
new file mode 100644
index 00000000000..46fd04b1616
--- /dev/null
+++ b/badges/classes/event/observer.php
@@ -0,0 +1,268 @@
+<?php
+// This file is part of Moodle - http://moodle.org/
+//
+// Moodle is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+//
+// Moodle is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+//
+// You should have received a copy of the GNU General Public License
+// along with Moodle.  If not, see <http://www.gnu.org/licenses/>.
+
+namespace core_badges\event;
+
+use core\event\badge_awarded;
+use core\event\cohort_member_added;
+use core\event\competency_evidence_created;
+use core\event\course_completed;
+use core\event\course_module_completion_updated;
+use core\event\user_updated;
+use core_badges\badge;
+
+/**
+ * Event observer for badges.
+ *
+ * @package    core_badges
+ * @copyright  2013 Rajesh Taneja <rajesh@moodle.com>
+ * @author     Rajesh Taneja <rajesh@moodle.com>
+ * @author     Dai Nguyen Trong <ngtrdai@hotmail.com>
+ * @license    http://www.gnu.org/copyleft/gpl.html GNU GPL v3 or later
+ */
+class observer {
+    /**
+     * Determines if badge processing is enabled.
+     *
+     * @return bool True if badges are enabled, false otherwise.
+     */
+    private static function badges_enabled(): bool {
+        global $CFG;
+        return !empty($CFG->enablebadges);
+    }
+
+    /**
+     * Common method to process badge issue after criteria is met.
+     *
+     * @param badge $badge The badge instance
+     * @param int $criteriatype The type of criteria being checked
+     * @param int $userid The user ID to check criteria against
+     */
+    private static function process_criteria_completion(badge $badge, int $criteriatype, int $userid): void {
+        if (!$badge->is_active() || $badge->is_issued($userid)) {
+            return;
+        }
+
+        if ($badge->criteria[$criteriatype]->review($userid)) {
+            $badge->criteria[$criteriatype]->mark_complete($userid);
+
+            if ($badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->review($userid)) {
+                $badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->mark_complete($userid);
+                $badge->issue($userid);
+            }
+        }
+    }
+
+    /**
+     * Triggered when 'course_module_completion_updated' event is triggered.
+     *
+     * @param course_module_completion_updated $event
+     */
+    public static function course_module_criteria_review(course_module_completion_updated $event): void {
+        global $DB, $CFG;
+
+        if (!self::badges_enabled()) {
+            return;
+        }
+
+        require_once($CFG->dirroot.'/lib/badgeslib.php');
+
+        $eventdata = $event->get_record_snapshot('course_modules_completion', $event->objectid);
+        $userid = $event->relateduserid;
+        $mod = $event->contextinstanceid;
+
+        // Only process completion states that indicate the module has been completed.
+        if (!in_array($eventdata->completionstate, [
+            COMPLETION_COMPLETE,
+            COMPLETION_COMPLETE_PASS,
+            COMPLETION_COMPLETE_FAIL,
+        ])) {
+            return;
+        }
+
+        // Find all badges that have this module in their criteria.
+        $params = [
+            'name' => 'module_' . $mod,
+            'value' => $mod,
+        ];
+
+        if ($rs = $DB->get_records('badge_criteria_param', $params)) {
+            foreach ($rs as $r) {
+                $bid = $DB->get_field('badge_criteria', 'badgeid', ['id' => $r->critid], MUST_EXIST);
+                $badge = new badge($bid);
+
+                self::process_criteria_completion($badge, BADGE_CRITERIA_TYPE_ACTIVITY, $userid);
+            }
+        }
+    }
+
+    /**
+     * Triggered when '\core\event\competency_evidence_created' event is triggered.
+     *
+     * @param competency_evidence_created $event
+     */
+    public static function competency_criteria_review(competency_evidence_created $event): void {
+        global $DB, $CFG;
+
+        if (!self::badges_enabled()) {
+            return;
+        }
+
+        require_once($CFG->dirroot.'/lib/badgeslib.php');
+
+        if (!get_config('core_competency', 'enabled')) {
+            return;
+        }
+
+        $cid = $event->other['competencyid'];
+        $userid = $event->relateduserid;
+        $params = [
+            'name' => 'competency_' . $cid,
+            'value' => $cid,
+        ];
+
+        if ($rs = $DB->get_records('badge_criteria_param', $params)) {
+            foreach ($rs as $r) {
+                $crit = $DB->get_record('badge_criteria', ['id' => $r->critid], 'badgeid, criteriatype', MUST_EXIST);
+                $badge = new badge($crit->badgeid);
+
+                self::process_criteria_completion($badge, $crit->criteriatype, $userid);
+            }
+        }
+    }
+
+    /**
+     * Triggered when 'course_completed' event is triggered.
+     *
+     * @param course_completed $event
+     */
+    public static function course_criteria_review(course_completed $event): void {
+        global $DB, $CFG;
+
+        if (!self::badges_enabled()) {
+            return;
+        }
+
+        require_once($CFG->dirroot.'/lib/badgeslib.php');
+
+        $userid = $event->relateduserid;
+        $courseid = $event->courseid;
+        $params = [
+            'name' => 'course_' . $courseid,
+            'value' => $courseid,
+        ];
+
+        if ($rs = $DB->get_records('badge_criteria_param', $params)) {
+            foreach ($rs as $r) {
+                $crit = $DB->get_record(
+                    'badge_criteria',
+                    ['id' => $r->critid],
+                    'badgeid, criteriatype',
+                    MUST_EXIST
+                );
+                $badge = new badge($crit->badgeid);
+
+                self::process_criteria_completion($badge, $crit->criteriatype, $userid);
+            }
+        }
+    }
+
+    /**
+     * Triggered when 'badge_awarded' event happens.
+     *
+     * @param badge_awarded $event event generated when a badge is awarded.
+     */
+    public static function badge_criteria_review(badge_awarded $event): void {
+        global $DB, $CFG;
+
+        if (!self::badges_enabled()) {
+            return;
+        }
+
+        require_once($CFG->dirroot.'/lib/badgeslib.php');
+
+        $userid = $event->relateduserid;
+
+        if ($rs = $DB->get_records('badge_criteria', ['criteriatype' => BADGE_CRITERIA_TYPE_BADGE])) {
+            foreach ($rs as $r) {
+                $badge = new badge($r->badgeid);
+                self::process_criteria_completion($badge, BADGE_CRITERIA_TYPE_BADGE, $userid);
+            }
+        }
+    }
+
+    /**
+     * Triggered when 'user_updated' event happens.
+     *
+     * @param user_updated $event event generated when user profile is updated.
+     */
+    public static function profile_criteria_review(user_updated $event): void {
+        global $DB, $CFG;
+
+        if (!self::badges_enabled()) {
+            return;
+        }
+
+        require_once($CFG->dirroot . '/lib/badgeslib.php');
+        $userid = $event->objectid;
+
+        if ($rs = $DB->get_records('badge_criteria', ['criteriatype' => BADGE_CRITERIA_TYPE_PROFILE])) {
+            foreach ($rs as $r) {
+                $badge = new badge($r->badgeid);
+                self::process_criteria_completion($badge, BADGE_CRITERIA_TYPE_PROFILE, $userid);
+            }
+        }
+    }
+
+    /**
+     * Triggered when the 'cohort_member_added' event happens.
+     *
+     * @param cohort_member_added $event generated when a user is added to a cohort
+     */
+    public static function cohort_criteria_review(cohort_member_added $event): void {
+        global $DB, $CFG;
+
+        if (!self::badges_enabled()) {
+            return;
+        }
+
+        require_once($CFG->dirroot . '/lib/badgeslib.php');
+
+        $cohortid = $event->objectid;
+        $userid = $event->relateduserid;
+
+        // Get relevant badges.
+        $badgesql = "SELECT badgeid
+                       FROM {badge_criteria_param} cp
+                       JOIN {badge_criteria} c ON cp.critid = c.id
+                      WHERE c.criteriatype = ?
+                            AND cp.name = ?";
+
+        $badges = $DB->get_records_sql(
+            $badgesql,
+            [BADGE_CRITERIA_TYPE_COHORT, "cohort_{$cohortid}"],
+        );
+
+        if (empty($badges)) {
+            return;
+        }
+
+        foreach ($badges as $b) {
+            $badge = new badge($b->badgeid);
+            self::process_criteria_completion($badge, BADGE_CRITERIA_TYPE_COHORT, $userid);
+        }
+    }
+}
diff --git a/badges/classes/observer.php b/badges/classes/observer.php
deleted file mode 100644
index 9817a65131f..00000000000
--- a/badges/classes/observer.php
+++ /dev/null
@@ -1,254 +0,0 @@
-<?php
-// This file is part of Moodle - http://moodle.org/
-//
-// Moodle is free software: you can redistribute it and/or modify
-// it under the terms of the GNU General Public License as published by
-// the Free Software Foundation, either version 3 of the License, or
-// (at your option) any later version.
-//
-// Moodle is distributed in the hope that it will be useful,
-// but WITHOUT ANY WARRANTY; without even the implied warranty of
-// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
-// GNU General Public License for more details.
-//
-// You should have received a copy of the GNU General Public License
-// along with Moodle.  If not, see <http://www.gnu.org/licenses/>.
-
-defined('MOODLE_INTERNAL') || die();
-
-use \core_badges\badge;
-
-/**
- * Event observer for badges.
- *
- * @package    core_badges
- * @copyright  2013 Rajesh Taneja <rajesh@moodle.com>
- * @license    http://www.gnu.org/copyleft/gpl.html GNU GPL v3 or later
- */
-class core_badges_observer {
-    /**
-     * Triggered when 'course_module_completion_updated' event is triggered.
-     *
-     * @param \core\event\course_module_completion_updated $event
-     */
-    public static function course_module_criteria_review(\core\event\course_module_completion_updated $event) {
-        global $DB, $CFG;
-
-        if (!empty($CFG->enablebadges)) {
-            require_once($CFG->dirroot.'/lib/badgeslib.php');
-
-            $eventdata = $event->get_record_snapshot('course_modules_completion', $event->objectid);
-            $userid = $event->relateduserid;
-            $mod = $event->contextinstanceid;
-
-            if ($eventdata->completionstate == COMPLETION_COMPLETE
-                || $eventdata->completionstate == COMPLETION_COMPLETE_PASS
-                || $eventdata->completionstate == COMPLETION_COMPLETE_FAIL) {
-                // Need to take into account that there can be more than one badge with the same activity in its criteria.
-                if ($rs = $DB->get_records('badge_criteria_param', array('name' => 'module_' . $mod, 'value' => $mod))) {
-                    foreach ($rs as $r) {
-                        $bid = $DB->get_field('badge_criteria', 'badgeid', array('id' => $r->critid), MUST_EXIST);
-                        $badge = new badge($bid);
-                        if (!$badge->is_active() || $badge->is_issued($userid)) {
-                            continue;
-                        }
-
-                        if ($badge->criteria[BADGE_CRITERIA_TYPE_ACTIVITY]->review($userid)) {
-                            $badge->criteria[BADGE_CRITERIA_TYPE_ACTIVITY]->mark_complete($userid);
-
-                            if ($badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->review($userid)) {
-                                $badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->mark_complete($userid);
-                                $badge->issue($userid);
-                            }
-                        }
-                    }
-                }
-            }
-        }
-    }
-
-    /**
-     * Triggered when '\core\event\competency_evidence_created' event is triggered.
-     *
-     * @param \core\event\competency_evidence_created $event
-     */
-    public static function competency_criteria_review(\core\event\competency_evidence_created $event) {
-        global $DB, $CFG;
-
-        if (!empty($CFG->enablebadges)) {
-            require_once($CFG->dirroot.'/lib/badgeslib.php');
-
-            if (!get_config('core_competency', 'enabled')) {
-                return;
-            }
-
-            $ucid = $event->other['usercompetencyid'];
-            $cid = $event->other['competencyid'];
-            $userid = $event->relateduserid;
-
-            if ($rs = $DB->get_records('badge_criteria_param', array('name' => 'competency_' . $cid, 'value' => $cid))) {
-                foreach ($rs as $r) {
-                    $crit = $DB->get_record('badge_criteria', array('id' => $r->critid), 'badgeid, criteriatype', MUST_EXIST);
-                    $badge = new badge($crit->badgeid);
-                    // Only site badges are updated from site competencies.
-                    if (!$badge->is_active() || $badge->is_issued($userid)) {
-                        continue;
-                    }
-
-                    if ($badge->criteria[$crit->criteriatype]->review($userid)) {
-                        $badge->criteria[$crit->criteriatype]->mark_complete($userid);
-
-                        if ($badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->review($userid)) {
-                            $badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->mark_complete($userid);
-                            $badge->issue($userid);
-                        }
-                    }
-                }
-            }
-        }
-    }
-
-    /**
-     * Triggered when 'course_completed' event is triggered.
-     *
-     * @param \core\event\course_completed $event
-     */
-    public static function course_criteria_review(\core\event\course_completed $event) {
-        global $DB, $CFG;
-
-        if (!empty($CFG->enablebadges)) {
-            require_once($CFG->dirroot.'/lib/badgeslib.php');
-
-            $userid = $event->relateduserid;
-            $courseid = $event->courseid;
-
-            // Need to take into account that course can be a part of course_completion and courseset_completion criteria.
-            if ($rs = $DB->get_records('badge_criteria_param', array('name' => 'course_' . $courseid, 'value' => $courseid))) {
-                foreach ($rs as $r) {
-                    $crit = $DB->get_record('badge_criteria', array('id' => $r->critid), 'badgeid, criteriatype', MUST_EXIST);
-                    $badge = new badge($crit->badgeid);
-                    if (!$badge->is_active() || $badge->is_issued($userid)) {
-                        continue;
-                    }
-
-                    if ($badge->criteria[$crit->criteriatype]->review($userid)) {
-                        $badge->criteria[$crit->criteriatype]->mark_complete($userid);
-
-                        if ($badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->review($userid)) {
-                            $badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->mark_complete($userid);
-                            $badge->issue($userid);
-                        }
-                    }
-                }
-            }
-        }
-    }
-
-    /**
-     * Triggered when 'badge_awarded' event happens.
-     *
-     * @param \core\event\badge_awarded $event event generated when a badge is awarded.
-     */
-    public static function badge_criteria_review(\core\event\badge_awarded $event) {
-        global $DB, $CFG;
-
-        if (!empty($CFG->enablebadges)) {
-            require_once($CFG->dirroot.'/lib/badgeslib.php');
-            $userid = $event->relateduserid;
-
-            if ($rs = $DB->get_records('badge_criteria', array('criteriatype' => BADGE_CRITERIA_TYPE_BADGE))) {
-                foreach ($rs as $r) {
-                    $badge = new badge($r->badgeid);
-                    if (!$badge->is_active() || $badge->is_issued($userid)) {
-                        continue;
-                    }
-
-                    if ($badge->criteria[BADGE_CRITERIA_TYPE_BADGE]->review($userid)) {
-                        $badge->criteria[BADGE_CRITERIA_TYPE_BADGE]->mark_complete($userid);
-
-                        if ($badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->review($userid)) {
-                            $badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->mark_complete($userid);
-                            $badge->issue($userid);
-                        }
-                    }
-                }
-            }
-        }
-    }
-    /**
-     * Triggered when 'user_updated' event happens.
-     *
-     * @param \core\event\user_updated $event event generated when user profile is updated.
-     */
-    public static function profile_criteria_review(\core\event\user_updated $event) {
-        global $DB, $CFG;
-
-        if (!empty($CFG->enablebadges)) {
-            require_once($CFG->dirroot.'/lib/badgeslib.php');
-            $userid = $event->objectid;
-
-            if ($rs = $DB->get_records('badge_criteria', array('criteriatype' => BADGE_CRITERIA_TYPE_PROFILE))) {
-                foreach ($rs as $r) {
-                    $badge = new badge($r->badgeid);
-                    if (!$badge->is_active() || $badge->is_issued($userid)) {
-                        continue;
-                    }
-
-                    if ($badge->criteria[BADGE_CRITERIA_TYPE_PROFILE]->review($userid)) {
-                        $badge->criteria[BADGE_CRITERIA_TYPE_PROFILE]->mark_complete($userid);
-
-                        if ($badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->review($userid)) {
-                            $badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->mark_complete($userid);
-                            $badge->issue($userid);
-                        }
-                    }
-                }
-            }
-        }
-    }
-
-    /**
-     * Triggered when the 'cohort_member_added' event happens.
-     *
-     * @param \core\event\cohort_member_added $event generated when a user is added to a cohort
-     */
-    public static function cohort_criteria_review(\core\event\cohort_member_added $event) {
-        global $DB, $CFG;
-
-        if (!empty($CFG->enablebadges)) {
-            require_once($CFG->dirroot.'/lib/badgeslib.php');
-            $cohortid = $event->objectid;
-            $userid = $event->relateduserid;
-
-            // Get relevant badges.
-            $badgesql = "SELECT badgeid
-                FROM {badge_criteria_param} cp
-                JOIN {badge_criteria} c ON cp.critid = c.id
-                WHERE c.criteriatype = ?
-                AND cp.name = ?";
-            $badges = $DB->get_records_sql($badgesql, array(BADGE_CRITERIA_TYPE_COHORT, "cohort_{$cohortid}"));
-            if (empty($badges)) {
-                return;
-            }
-
-            foreach ($badges as $b) {
-                $badge = new badge($b->badgeid);
-                if (!$badge->is_active()) {
-                    continue;
-                }
-                if ($badge->is_issued($userid)) {
-                    continue;
-                }
-
-                if ($badge->criteria[BADGE_CRITERIA_TYPE_COHORT]->review($userid)) {
-                    $badge->criteria[BADGE_CRITERIA_TYPE_COHORT]->mark_complete($userid);
-
-                    if ($badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->review($userid)) {
-                        $badge->criteria[BADGE_CRITERIA_TYPE_OVERALL]->mark_complete($userid);
-                        $badge->issue($userid);
-                    }
-                }
-            }
-        }
-    }
-}
diff --git a/badges/db/renamedclasses.php b/badges/db/renamedclasses.php
new file mode 100644
index 00000000000..42333b9df27
--- /dev/null
+++ b/badges/db/renamedclasses.php
@@ -0,0 +1,37 @@
+<?php
+// This file is part of Moodle - http://moodle.org/
+//
+// Moodle is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+//
+// Moodle is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+//
+// You should have received a copy of the GNU General Public License
+// along with Moodle.  If not, see <http://www.gnu.org/licenses/>.
+
+/**
+ * This file contains mappings for classes that have been renamed so that they meet the requirements of the autoloader.
+ *
+ * Renaming isn't always the recommended approach, but can provide benefit in situations where we've already got a
+ * close structure, OR where lots of classes get included and not necessarily used, or checked for often.
+ *
+ * When renaming a class delete the original class and add an entry to the db/renamedclasses.php directory for that
+ * component.
+ * This way we don't need to keep around old classes, instead creating aliases only when required.
+ * One big advantage to this method is that we provide consistent debugging for renamed classes when they are used.
+ *
+ * @package    core_badges
+ * @copyright  Dai Nguyen Trong <ngtrdai@hotmail.com>
+ * @license    http://www.gnu.org/copyleft/gpl.html GNU GPL v3 or later
+ */
+
+defined('MOODLE_INTERNAL') || die();
+
+$renamedclasses = [
+    'core_badges_observer' => 'core_badges\\event\\observer',
+];
diff --git a/lib/db/events.php b/lib/db/events.php
index 3f9b021ff9a..6cadc90b4f0 100644
--- a/lib/db/events.php
+++ b/lib/db/events.php
@@ -34,47 +34,46 @@ defined('MOODLE_INTERNAL') || die();
 
 // List of legacy event handlers.
 
-$handlers = array(
+$handlers = [
     // No more old events!
-);
+];
 
 // List of events_2 observers.
 
-$observers = array(
-
-    array(
+$observers = [
+    [
         'eventname'   => '\core\event\course_module_completion_updated',
-        'callback'    => 'core_badges_observer::course_module_criteria_review',
-    ),
-    array(
+        'callback'    => '\core_badges\event\observer::course_module_criteria_review',
+    ],
+    [
         'eventname'   => '\core\event\badge_awarded',
-        'callback'    => 'core_badges_observer::badge_criteria_review',
-    ),
-    array(
+        'callback'    => '\core_badges\event\observer::badge_criteria_review',
+    ],
+    [
         'eventname'   => '\core\event\course_completed',
-        'callback'    => 'core_badges_observer::course_criteria_review',
-    ),
-    array(
+        'callback'    => '\core_badges\event\observer::course_criteria_review',
+    ],
+    [
         'eventname'   => '\core\event\user_updated',
-        'callback'    => 'core_badges_observer::profile_criteria_review',
-    ),
-    array(
+        'callback'    => '\core_badges\event\observer::profile_criteria_review',
+    ],
+    [
         'eventname'   => '\core\event\cohort_member_added',
-        'callback'    => 'core_badges_observer::cohort_criteria_review',
-    ),
-    array(
+        'callback'    => '\core_badges\event\observer::cohort_criteria_review',
+    ],
+    [
         'eventname'   => '\core\event\competency_evidence_created',
-        'callback'    => 'core_badges_observer::competency_criteria_review',
-    ),
+        'callback'    => '\core_badges\event\observer::competency_criteria_review',
+    ],
     // Competencies.
-    array(
+    [
         'eventname'   => '\core\event\course_completed',
         'callback'    => 'core_competency\api::observe_course_completed',
-    ),
-    array(
+    ],
+    [
         'eventname'   => '\core\event\course_module_completion_updated',
         'callback'    => 'core_competency\api::observe_course_module_completion_updated',
-    ),
-);
+    ],
+];
 
 // List of all events triggered by Moodle can be found using Events list report.