Display omitted •Mg-Gd PVD coatings have been deposited onto Mg5Gd magnesium alloy pins.•The coating is effective in corrosion protection of Mg5Gd magnesium pins.•The protection mechanism involved sacrificial anodic dissolution of the PVD coating.•Galvanic current, OCP and SVET measurements supported galvanic protection mechanism.•The polished pin and PVD coating displayed similar VPD levels measured by SKPFM. In this work metallic pins made of Mg5Gd alloy were coated with magnetron sputtered PVD Mg5Gd layers. Immersion tests in Hank’s balanced salt solution (HBSS) were performed. The PVD coating drastically reduced the corrosion rate of the Mg5Gd pin. The corrosion mechanism of the coating was studied in model electrochemical measurements by Scanning Vibrating Electrode Technique and galvanic current measurements. The tests revealed the preferential anodic dissolution of the Mg5Gd coating galvanically coupled with the bulk Mg5Gd pin. Local measurements of Volta potential difference revealed the VPD contrast between the pin and the coating surfaces only after immersion in HBSS.