That would work. May I suggest a little more complexity? I had a similar situation on one of my machines and I added a control station with two switches and an indicating stack light to let people know the conveyor was in "manual mode."
Is the VFD for the discharge conveyor conveniently located at the conveyor, or is it in a remote location? If it is remote, I would suggest doing what I did, as "Local" requires you to access the face of the drive.
I attached a sketch I made for you with suggestions (pardon the ghetto editing). I would actually recommend reprogramming the drive so that instead of "Local" on the input, you would choose "Comm Port" (6) for parameter A053 and set P036 to 2 (2-Wire control via VFD terminals) and P038 to 0 (speed reference is the pot on the drive).
The goal would be to have a control station at the conveyor with one key switch (2-position, maintained), one selector switch (2-position, maintained), and a clearly visible yellow stack light.
The key switch would be used to select AUTO and MANUAL modes of operation. The key switch will allow the key to be removed only in the AUTO position. When in AUTO, the VFD will receive 24VDC at terminal 7, putting it in "Comm Port" mode, allowing the PC to control it. When in MANUAL mode, the key switch will feed 24VDC to a selector switch and a separate source of 24VDC to the yellow stack light to warn people that MANUAL mode is enabled. Use a separate 24VDC source for the light to ensure that you do not overload the VFD power supply.
The selector switch will be used to selected MANUAL STOP and MANUAL RUN modes of operation. The selector switch will energize terminal 2 of the VFD when in the MANUAL RUN position and de-energize that terminal when in MANUAL STOP position.