  The radioactive power generated by materials within the ejecta of a
binary-neutron-star (BNS) merger powers an optical transient known as a
kilonova. When the central remnant of a BNS merger is a long-lived magnetar, it
continuously produces a highly magnetized wind, altering both the dynamics and
temperature of the ejecta, leading to the expected emergence of an engine-fed
kilonova. In the first paper of this series, we conducted a detailed study of
the dynamics of wind-ejecta interaction and the efficiency of energy injection
through shocks. In this work, we combine this dynamical evolution with both
shock-heating and additional X-ray irradiation to model photon diffusion within
a constant-opacity ejecta. By calculating the radiation, we obtain the light
curve and spectral energy distribution (SED). Our findings reveal that, with
energy injection, a blue bump typically appears in the early stages ($\lesssim
1$ day). Furthermore, if the magnetar has not spun down by that time, a
brightening in the later stages occurs. Despite this, in a large parameter
space, the expected luminosity of the engine-fed kilonova is not significantly
higher than the typical r-process kilonova due to limited heating efficiency.
The SED of engine-fed kilonovae peaks in the relatively blue band in the early
stages and evolves towards the red, but at a slower rate compared to the
typical r-process kilonova.
