Nonlocal integral and/or gradient enhancements are widely used to resolve the mesh dependency issue with standard continuum damage models. However, it is reported that whereas the structural response is mesh independent, a spurious damage growth is observed. Accordingly, a class of modified nonlocal enhancements is developed in literature, where the interaction domain increases with damage. In this contribution, we adopt a contrary view that the interaction domain decreases with damage. This is motivated by the fact that the fracture of quasi-brittle materials typically starts as a diffuse network of microcracks, before localizing into a macroscopic crack. To ensure thermodynamics consistency, the micromorphic theory is adopted in the model development. The ensuing microforce balance resembles closely the Helmholtz expression in a conventional gradient damage model. The superior performance of the localizing gradient damage model is demonstrated through a one-dimensional problem, as well as mode I and II failure in plane deformation. For all three cases, a localized deformation band at material failure is obtained. Copyright (c) 2016 John Wiley & Sons, Ltd.