diff --git a/cli/azd/cmd/container.go b/cli/azd/cmd/container.go
index 157119278b0..fc8fe02cd8a 100644
--- a/cli/azd/cmd/container.go
+++ b/cli/azd/cmd/container.go
@@ -177,10 +177,19 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 		// semantics to follow.
 		envValue, err := cmd.Flags().GetString(internal.EnvironmentNameFlagName)
 		if err != nil {
-			log.Printf("'%s'command asked for envFlag, but envFlag was not included in cmd.Flags().", cmd.CommandPath())
+			log.Printf("'%s' command asked for envFlag, but envFlag was not included in cmd.Flags().", cmd.CommandPath())
 			envValue = ""
 		}
 
+		envTypeValue, err := cmd.Flags().GetString(internal.EnvironmentTypeFlagName)
+		if err != nil {
+			log.Printf(
+				"'%s' command asked for envTypeFlag, but envTypeFlag was not included in cmd.Flags().",
+				cmd.CommandPath(),
+			)
+			envTypeValue = ""
+		}
+
 		if envValue == "" {
 			// If no explicit environment flag was set, but one was provided
 			// in the context, use that instead.
@@ -190,7 +199,10 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 			}
 		}
 
-		return internal.EnvFlag{EnvironmentName: envValue}
+		return internal.EnvFlag{
+			EnvironmentName: envValue,
+			EnvironmentType: envTypeValue,
+		}
 	})
 
 	container.MustRegisterSingleton(func(cmd *cobra.Command) CmdAnnotations {
@@ -229,9 +241,10 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 			}
 
 			environmentName := envFlags.EnvironmentName
+			environmentType := envFlags.EnvironmentType
 			var err error
 
-			env, err := envManager.LoadOrInitInteractive(ctx, environmentName)
+			env, err := envManager.LoadOrInitInteractiveWithType(ctx, environmentName, environmentType)
 			if err != nil {
 				return nil, fmt.Errorf("loading environment: %w", err)
 			}
@@ -382,6 +395,7 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 		func(
 			ctx context.Context,
 			lazyAzdContext *lazy.Lazy[*azdcontext.AzdContext],
+			envFlags internal.EnvFlag,
 		) *lazy.Lazy[*project.ProjectConfig] {
 			return lazy.NewLazy(func() (*project.ProjectConfig, error) {
 				azdCtx, err := lazyAzdContext.GetValue()
@@ -389,7 +403,15 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 					return nil, err
 				}
 
-				projectConfig, err := project.Load(ctx, azdCtx.ProjectPath())
+				// Use environment-specific project path when an environment is specified
+				var projectPath string
+				if envFlags.EnvironmentName != "" {
+					projectPath = azdCtx.ProjectPathForEnvironment(envFlags.EnvironmentName)
+				} else {
+					projectPath = azdCtx.ProjectPath()
+				}
+
+				projectConfig, err := project.Load(ctx, projectPath)
 				if err != nil {
 					return nil, err
 				}
@@ -405,6 +427,7 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 		lazyProjectConfig *lazy.Lazy[*project.ProjectConfig],
 		lazyAzdContext *lazy.Lazy[*azdcontext.AzdContext],
 		lazyLocalEnvStore *lazy.Lazy[environment.LocalDataStore],
+		envFlags internal.EnvFlag,
 	) (*cloud.Cloud, error) {
 
 		// Precedence for cloud configuration:
@@ -424,8 +447,15 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 		localEnvStore, _ := lazyLocalEnvStore.GetValue()
 		if azdCtx, err := lazyAzdContext.GetValue(); err == nil {
 			if azdCtx != nil && localEnvStore != nil {
-				if defaultEnvName, err := azdCtx.GetDefaultEnvironmentName(); err == nil {
-					if env, err := localEnvStore.Get(ctx, defaultEnvName); err == nil {
+				var envName string
+				if envFlags.EnvironmentName != "" {
+					envName = envFlags.EnvironmentName
+				} else if defaultEnvName, err := azdCtx.GetDefaultEnvironmentName(); err == nil {
+					envName = defaultEnvName
+				}
+
+				if envName != "" {
+					if env, err := localEnvStore.Get(ctx, envName); err == nil {
 						if cloudConfigurationNode, exists := env.Config.Get(cloud.ConfigPath); exists {
 							if value, err := cloud.ParseCloudConfig(cloudConfigurationNode); err == nil {
 								cloudConfig, err := cloud.NewCloud(value)
@@ -438,7 +468,7 @@ func registerCommonDependencies(container *ioc.NestedContainer) {
 									Suggestion: fmt.Sprintf(
 										"Set the cloud configuration by editing the 'cloud' node in the config.json "+
 											"file for the %s environment\n%s",
-										defaultEnvName,
+										envName,
 										validClouds,
 									),
 								}
diff --git a/cli/azd/cmd/container_test.go b/cli/azd/cmd/container_test.go
index 1958b94e765..76a9cca4ff7 100644
--- a/cli/azd/cmd/container_test.go
+++ b/cli/azd/cmd/container_test.go
@@ -11,6 +11,7 @@ import (
 	"github.com/azure/azure-dev/cli/azd/pkg/ioc"
 	"github.com/azure/azure-dev/cli/azd/pkg/lazy"
 	"github.com/azure/azure-dev/cli/azd/pkg/project"
+	"github.com/spf13/cobra"
 	"github.com/stretchr/testify/require"
 )
 
@@ -19,6 +20,13 @@ func Test_Lazy_Project_Config_Resolution(t *testing.T) {
 	container := ioc.NewNestedContainer(nil)
 	ioc.RegisterInstance(container, ctx)
 
+	// Register a mock cobra command for testing
+	mockCmd := &cobra.Command{}
+	mockCmd.SetContext(ctx)
+	// Add the environment flag to avoid the "envFlag was not included in cmd.Flags()" error
+	mockCmd.Flags().StringP("environment", "e", "", "Environment name")
+	ioc.RegisterInstance(container, mockCmd)
+
 	registerCommonDependencies(container)
 
 	// Register the testing lazy component
@@ -88,6 +96,13 @@ func Test_Lazy_AzdContext_Resolution(t *testing.T) {
 	container := ioc.NewNestedContainer(nil)
 	ioc.RegisterInstance(container, ctx)
 
+	// Register a mock cobra command for testing
+	mockCmd := &cobra.Command{}
+	mockCmd.SetContext(ctx)
+	// Add the environment flag to avoid the "envFlag was not included in cmd.Flags()" error
+	mockCmd.Flags().StringP("environment", "e", "", "Environment name")
+	ioc.RegisterInstance(container, mockCmd)
+
 	registerCommonDependencies(container)
 
 	// Register the testing lazy component
diff --git a/cli/azd/cmd/env.go b/cli/azd/cmd/env.go
index e61d6f2c760..a1314c6853f 100644
--- a/cli/azd/cmd/env.go
+++ b/cli/azd/cmd/env.go
@@ -9,6 +9,7 @@ import (
 	"fmt"
 	"io"
 	"os"
+	"path/filepath"
 	"slices"
 	"strings"
 	"time"
@@ -27,6 +28,7 @@ import (
 	"github.com/azure/azure-dev/cli/azd/pkg/infra/provisioning/bicep"
 	"github.com/azure/azure-dev/cli/azd/pkg/input"
 	"github.com/azure/azure-dev/cli/azd/pkg/keyvault"
+	"github.com/azure/azure-dev/cli/azd/pkg/osutil"
 	"github.com/azure/azure-dev/cli/azd/pkg/output"
 	"github.com/azure/azure-dev/cli/azd/pkg/output/ux"
 	"github.com/azure/azure-dev/cli/azd/pkg/project"
@@ -808,6 +810,7 @@ func (e *envListAction) Run(ctx context.Context) (*actions.ActionResult, error)
 type envNewFlags struct {
 	subscription string
 	location     string
+	envType      string
 	global       *internal.GlobalCommandOptions
 }
 
@@ -819,6 +822,7 @@ func (f *envNewFlags) Bind(local *pflag.FlagSet, global *internal.GlobalCommandO
 		"Name or ID of an Azure subscription to use for the new environment",
 	)
 	local.StringVarP(&f.location, "location", "l", "", "Azure location for the new environment")
+	local.StringVarP(&f.envType, "type", "t", "", "The type of the environment (e.g., dev, test, prod). (Experimental)")
 
 	f.global = global
 }
@@ -870,10 +874,12 @@ func (en *envNewAction) Run(ctx context.Context) (*actions.ActionResult, error)
 		environmentName = en.args[0]
 	}
 
+	envType := en.flags.envType
 	envSpec := environment.Spec{
 		Name:         environmentName,
 		Subscription: en.flags.subscription,
 		Location:     en.flags.location,
+		Type:         envType,
 	}
 
 	env, err := en.envManager.Create(ctx, envSpec)
@@ -881,6 +887,56 @@ func (en *envNewAction) Run(ctx context.Context) (*actions.ActionResult, error)
 		return nil, fmt.Errorf("creating new environment: %w", err)
 	}
 
+	// Create environment-specific project file if environment type is specified
+	if envType != "" {
+		envProjectFileName := azdcontext.ProjectFileNameForEnvironmentType(envType)
+		envProjectPath := filepath.Join(en.azdCtx.ProjectDirectory(), envProjectFileName)
+
+		if _, err := os.Stat(envProjectPath); os.IsNotExist(err) {
+			// Check for current project file to copy from
+			currentProjectFileName := en.azdCtx.ProjectFileName()
+			currentProjectPath := en.azdCtx.ProjectPath()
+			shouldCopy := false
+
+			if _, err := os.Stat(currentProjectPath); err == nil {
+				// Prompt user if they want to copy content from azure.yaml
+				shouldCopy, err = en.console.Confirm(ctx, input.ConsoleOptions{
+					Message:      fmt.Sprintf("Copy contents of %s to %s?", currentProjectFileName, envProjectFileName),
+					DefaultValue: true,
+				})
+				if err != nil {
+					return nil, fmt.Errorf("prompting to copy azure.yaml content: %w", err)
+				}
+			} else if !os.IsNotExist(err) {
+				return nil, fmt.Errorf("checking for %s: %w", currentProjectFileName, err)
+			}
+
+			if shouldCopy {
+				content, err := os.ReadFile(currentProjectPath)
+				if err != nil {
+					return nil, fmt.Errorf("reading main project file: %w", err)
+				}
+
+				if err := os.WriteFile(envProjectPath, content, osutil.PermissionFile); err != nil {
+					return nil, fmt.Errorf("creating environment project file: %w", err)
+				}
+
+				en.console.MessageUxItem(ctx, &ux.DoneMessage{
+					Message: fmt.Sprintf("Created %s", envProjectFileName),
+				})
+			} else {
+				_, err = project.New(ctx, envProjectPath, azdcontext.ProjectName(en.azdCtx.ProjectDirectory()))
+				if err != nil {
+					return nil, fmt.Errorf("creating empty project file: %w", err)
+				}
+
+				en.console.MessageUxItem(ctx, &ux.DoneMessage{
+					Message: fmt.Sprintf("Created empty %s", envProjectFileName),
+				})
+			}
+		}
+	}
+
 	envs, err := en.envManager.List(ctx)
 	if err != nil {
 		return nil, fmt.Errorf("listing environments: %w", err)
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-deploy.snap b/cli/azd/cmd/testdata/TestUsage-azd-deploy.snap
index f56dde06875..bd0dcefae8f 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-deploy.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-deploy.snap
@@ -10,6 +10,7 @@ Usage
 
 Flags
         --all                 	: Deploys all services that are listed in azure.yaml
+        --env-type string     	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string  	: The name of the environment to use.
         --from-package string 	: Deploys the packaged service located at the provided path. Supports zipped file packages (file path) or container images (image tag).
 
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-down.snap b/cli/azd/cmd/testdata/TestUsage-azd-down.snap
index f29b692ce83..0c675b7b8a2 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-down.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-down.snap
@@ -5,6 +5,7 @@ Usage
   azd down [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --force              	: Does not require confirmation before it deletes resources.
         --purge              	: Does not require confirmation before it permanently deletes resources that are soft-deleted by default (for example, key vaults).
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env-get-value.snap b/cli/azd/cmd/testdata/TestUsage-azd-env-get-value.snap
index fc6d79d8ef2..36e8f1617ab 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env-get-value.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env-get-value.snap
@@ -5,6 +5,7 @@ Usage
   azd env get-value <keyName> [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
 
 Global Flags
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env-get-values.snap b/cli/azd/cmd/testdata/TestUsage-azd-env-get-values.snap
index 7c8296ba56d..39e018afe91 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env-get-values.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env-get-values.snap
@@ -5,6 +5,7 @@ Usage
   azd env get-values [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
 
 Global Flags
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap b/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap
index 91ae8cdbbd8..1aa5b8cd94d 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap
@@ -7,6 +7,7 @@ Usage
 Flags
     -l, --location string     	: Azure location for the new environment
         --subscription string 	: Name or ID of an Azure subscription to use for the new environment
+    -t, --type string         	: The type of the environment (e.g., dev, test, prod). (Experimental)
 
 Global Flags
     -C, --cwd string 	: Sets the current working directory.
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env-refresh.snap b/cli/azd/cmd/testdata/TestUsage-azd-env-refresh.snap
index dcf4cebe0a8..df3c9793852 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env-refresh.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env-refresh.snap
@@ -5,6 +5,7 @@ Usage
   azd env refresh <environment> [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --hint string        	: Hint to help identify the environment to refresh
 
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env-set-secret.snap b/cli/azd/cmd/testdata/TestUsage-azd-env-set-secret.snap
index fafa1584dd2..fe1e7073388 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env-set-secret.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env-set-secret.snap
@@ -5,6 +5,7 @@ Usage
   azd env set-secret <name> [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
 
 Global Flags
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env-set.snap b/cli/azd/cmd/testdata/TestUsage-azd-env-set.snap
index 038d32ce199..023242cbac0 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env-set.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env-set.snap
@@ -5,6 +5,7 @@ Usage
   azd env set [<key> <value>] | [<key>=<value> ...] | [--file <filepath>] [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --file string        	: Path to .env formatted file to load environment values from.
 
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-hooks-run.snap b/cli/azd/cmd/testdata/TestUsage-azd-hooks-run.snap
index 323709bfe38..e013a1a9466 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-hooks-run.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-hooks-run.snap
@@ -5,6 +5,7 @@ Usage
   azd hooks run <name> [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --platform string    	: Forces hooks to run for the specified platform.
         --service string     	: Only runs hooks for the specified service.
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-infra-generate.snap b/cli/azd/cmd/testdata/TestUsage-azd-infra-generate.snap
index 8316acc388b..946cafa8fd3 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-infra-generate.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-infra-generate.snap
@@ -5,6 +5,7 @@ Usage
   azd infra generate [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --force              	: Overwrite any existing files without prompting
 
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-init.snap b/cli/azd/cmd/testdata/TestUsage-azd-init.snap
index 2b7e020c7b5..9992c4eee97 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-init.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-init.snap
@@ -9,6 +9,7 @@ Usage
 
 Flags
     -b, --branch string       	: The template branch to initialize from. Must be used with a template argument (--template or -t).
+        --env-type string     	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string  	: The name of the environment to use.
     -f, --filter strings      	: The tag(s) used to filter template results. Supports comma-separated values.
         --from-code           	: Initializes a new application from your existing code.
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-monitor.snap b/cli/azd/cmd/testdata/TestUsage-azd-monitor.snap
index b3a61421a00..b7862595913 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-monitor.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-monitor.snap
@@ -5,6 +5,7 @@ Usage
   azd monitor [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --live               	: Open a browser to Application Insights Live Metrics. Live Metrics is currently not supported for Python apps.
         --logs               	: Open a browser to Application Insights Logs.
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-package.snap b/cli/azd/cmd/testdata/TestUsage-azd-package.snap
index 46e5ed27b47..aed269c15a3 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-package.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-package.snap
@@ -10,6 +10,7 @@ Usage
 
 Flags
         --all                	: Packages all services that are listed in azure.yaml
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --output-path string 	: File or folder path where the generated packages will be saved.
 
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-pipeline-config.snap b/cli/azd/cmd/testdata/TestUsage-azd-pipeline-config.snap
index 00371f49934..5f21e5f237e 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-pipeline-config.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-pipeline-config.snap
@@ -11,6 +11,7 @@ Usage
 Flags
     -m, --applicationServiceManagementReference string 	: Service Management Reference. References application or service contact information from a Service or Asset Management database. This value must be a Universally Unique Identifier (UUID). You can set this value globally by running azd config set pipeline.config.applicationServiceManagementReference <UUID>.
         --auth-type string                             	: The authentication type used between the pipeline provider and Azure for deployment (Only valid for GitHub provider). Valid values: federated, client-credentials.
+        --env-type string                              	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string                           	: The name of the environment to use.
         --principal-id string                          	: The client id of the service principal to use to grant access to Azure resources as part of the pipeline.
         --principal-name string                        	: The name of the service principal to use to grant access to Azure resources as part of the pipeline.
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-provision.snap b/cli/azd/cmd/testdata/TestUsage-azd-provision.snap
index 33c4f5a05b2..477cb59b5e1 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-provision.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-provision.snap
@@ -10,6 +10,7 @@ Usage
   azd provision [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --no-state           	: (Bicep only) Forces a fresh deployment based on current Bicep template files, ignoring any stored deployment state.
         --preview            	: Preview changes to Azure resources.
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-restore.snap b/cli/azd/cmd/testdata/TestUsage-azd-restore.snap
index 7c571438a97..dd340ab1d4f 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-restore.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-restore.snap
@@ -9,6 +9,7 @@ Usage
 
 Flags
         --all                	: Restores all services that are listed in azure.yaml
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
 
 Global Flags
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-show.snap b/cli/azd/cmd/testdata/TestUsage-azd-show.snap
index 4fc0230dab4..d473fb1d1f9 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-show.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-show.snap
@@ -5,6 +5,7 @@ Usage
   azd show [resource name or ID] [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
         --show-secrets       	: Unmask secrets in output.
 
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-up.snap b/cli/azd/cmd/testdata/TestUsage-azd-up.snap
index dfccf2941ab..b74126a44b9 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-up.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-up.snap
@@ -20,6 +20,7 @@ Usage
   azd up [flags]
 
 Flags
+        --env-type string    	: The type of the environment (e.g., dev, test, prod). (Experimental)
     -e, --environment string 	: The name of the environment to use.
 
 Global Flags
diff --git a/cli/azd/internal/env_flag.go b/cli/azd/internal/env_flag.go
index 2b4ee92482e..72f2510c9cc 100644
--- a/cli/azd/internal/env_flag.go
+++ b/cli/azd/internal/env_flag.go
@@ -9,21 +9,31 @@ import (
 	"github.com/spf13/pflag"
 )
 
-// EnvFlag is a flag that represents the environment name. Actions which inject an environment should also use this flag
-// so the user can control what environment is loaded in a uniform way across all our commands.
+// EnvFlag is a flag that represents the environment name and type. Actions which inject an environment
+// should also use this flag so the user can control what environment is loaded in a uniform way across all our commands.
 type EnvFlag struct {
-	EnvironmentName string
-	fromEnvVarValue string
+	EnvironmentName     string
+	EnvironmentType     string
+	fromEnvVarValue     string
+	fromEnvTypeVarValue string
 }
 
 // EnvironmentNameFlagName is the full name of the flag as it appears on the command line.
 const EnvironmentNameFlagName string = "environment"
 
+// EnvironmentTypeFlagName is the full name of the environment type flag as it appears on the command line.
+const EnvironmentTypeFlagName string = "env-type"
+
 // envNameEnvVarName is the same as environment.EnvNameEnvVarName, but duplicated here to prevent an import cycle.
 const envNameEnvVarName = "AZURE_ENV_NAME"
 
+// envTypeEnvVarName is the environment variable name for environment type.
+const envTypeEnvVarName = "AZURE_ENV_TYPE"
+
 func (e *EnvFlag) Bind(local *pflag.FlagSet, global *GlobalCommandOptions) {
 	e.fromEnvVarValue = os.Getenv(envNameEnvVarName)
+	e.fromEnvTypeVarValue = os.Getenv(envTypeEnvVarName)
+
 	local.StringVarP(
 		&e.EnvironmentName,
 		EnvironmentNameFlagName,
@@ -31,9 +41,21 @@ func (e *EnvFlag) Bind(local *pflag.FlagSet, global *GlobalCommandOptions) {
 		// Set the default value to AZURE_ENV_NAME value if available
 		e.fromEnvVarValue,
 		"The name of the environment to use.")
+
+	local.StringVar(
+		&e.EnvironmentType,
+		EnvironmentTypeFlagName,
+		// Set the default value to AZURE_ENV_TYPE value if available
+		e.fromEnvTypeVarValue,
+		"The type of the environment (e.g., dev, test, prod). (Experimental)")
 }
 
 // checks if the environment name was set from the command line
 func (e *EnvFlag) FromArg() bool {
 	return e.EnvironmentName != "" && e.EnvironmentName != e.fromEnvVarValue
 }
+
+// checks if the environment type was set from the command line or environment variable
+func (e *EnvFlag) TypeFromArg() bool {
+	return e.EnvironmentType != "" && e.EnvironmentType != e.fromEnvTypeVarValue
+}
diff --git a/cli/azd/pkg/azdo/pipeline.go b/cli/azd/pkg/azdo/pipeline.go
index 6273f7d814e..22e00532aa0 100644
--- a/cli/azd/pkg/azdo/pipeline.go
+++ b/cli/azd/pkg/azdo/pipeline.go
@@ -161,6 +161,10 @@ func getDefinitionVariables(
 		"AZURE_SUBSCRIPTION_ID":    createBuildDefinitionVariable(credentials.SubscriptionId, false, false),
 	}
 
+	if env.GetEnvironmentType() != "" {
+		variables[environment.EnvTypeEnvVarName] = createBuildDefinitionVariable(env.GetEnvironmentType(), false, false)
+	}
+
 	if provisioningProvider.Provider == provisioning.Bicep {
 		if rgName, has := env.LookupEnv(environment.ResourceGroupEnvVarName); has {
 			variables[environment.ResourceGroupEnvVarName] = createBuildDefinitionVariable(rgName, false, false)
diff --git a/cli/azd/pkg/environment/azdcontext/azdcontext.go b/cli/azd/pkg/environment/azdcontext/azdcontext.go
index 1b8f46a8e97..00653142873 100644
--- a/cli/azd/pkg/environment/azdcontext/azdcontext.go
+++ b/cli/azd/pkg/environment/azdcontext/azdcontext.go
@@ -7,11 +7,15 @@ import (
 	"encoding/json"
 	"errors"
 	"fmt"
+	"log"
 	"os"
 	"path/filepath"
+	"regexp"
+	"strings"
 
 	"github.com/azure/azure-dev/cli/azd/internal/names"
 	"github.com/azure/azure-dev/cli/azd/pkg/osutil"
+	"github.com/joho/godotenv"
 )
 
 const ProjectFileName = "azure.yaml"
@@ -20,10 +24,41 @@ const DotEnvFileName = ".env"
 const ConfigFileName = "config.json"
 const ConfigFileVersion = 1
 
+// Environment types should only contain alphanumeric characters
+var environmentTypeRegexp = regexp.MustCompile(`^[a-zA-Z0-9]{1,32}$`)
+
 type AzdContext struct {
 	projectDirectory string
 }
 
+func (c *AzdContext) ProjectFileName() string {
+	return c.ProjectFileNameForEnvironment("")
+}
+
+// ProjectFileNameForEnvironment returns the project file name for a specific environment.
+// If environmentName is empty, uses the default environment.
+func (c *AzdContext) ProjectFileNameForEnvironment(environmentName string) string {
+	// Get environment type for the specified environment (or default if empty)
+	envType, err := c.GetEnvironmentType(environmentName)
+	if err != nil {
+		log.Printf("getting env type: %v", err)
+		envType = ""
+	}
+
+	return ProjectFileNameForEnvironmentType(envType)
+}
+
+// ProjectFileNameForEnvironmentType returns the project file name for a specific environment type.
+// If environmentType is empty, returns the default project file name.
+func ProjectFileNameForEnvironmentType(environmentType string) string {
+	if environmentType == "" {
+		return "azure.yaml"
+	}
+
+	projectFileName := fmt.Sprintf("azure.%s.yaml", environmentType)
+	return projectFileName
+}
+
 func (c *AzdContext) ProjectDirectory() string {
 	return c.projectDirectory
 }
@@ -33,7 +68,17 @@ func (c *AzdContext) SetProjectDirectory(dir string) {
 }
 
 func (c *AzdContext) ProjectPath() string {
-	return filepath.Join(c.ProjectDirectory(), ProjectFileName)
+	fileName := c.ProjectFileName()
+	projectPath := filepath.Join(c.ProjectDirectory(), fileName)
+	return projectPath
+}
+
+// ProjectPathForEnvironment returns the project path for a specific environment.
+// If environmentName is empty, uses the default environment.
+func (c *AzdContext) ProjectPathForEnvironment(environmentName string) string {
+	fileName := c.ProjectFileNameForEnvironment(environmentName)
+	projectPath := filepath.Join(c.ProjectDirectory(), fileName)
+	return projectPath
 }
 
 func (c *AzdContext) EnvironmentDirectory() string {
@@ -49,10 +94,6 @@ func (c *AzdContext) EnvironmentRoot(name string) string {
 	return filepath.Join(c.EnvironmentDirectory(), name)
 }
 
-func (c *AzdContext) GetEnvironmentWorkDirectory(name string) string {
-	return filepath.Join(c.EnvironmentRoot(name), "wd")
-}
-
 // GetDefaultEnvironmentName returns the name of the default environment. Returns
 // an empty string if a default environment has not been set.
 func (c *AzdContext) GetDefaultEnvironmentName() (string, error) {
@@ -73,6 +114,42 @@ func (c *AzdContext) GetDefaultEnvironmentName() (string, error) {
 	return config.DefaultEnvironment, nil
 }
 
+// GetEnvironmentType returns the environment type for a specific environment.
+// If environmentName is empty, returns the type for the default environment.
+func (c *AzdContext) GetEnvironmentType(environmentName string) (string, error) {
+	targetEnvName := environmentName
+
+	if environmentName == "" {
+		defaultEnvName, err := c.GetDefaultEnvironmentName()
+		if err != nil {
+			return "", fmt.Errorf("getting default environment name: %w", err)
+		}
+
+		if defaultEnvName == "" {
+			return "", nil
+		}
+
+		targetEnvName = defaultEnvName
+	}
+
+	// Read the environment's .env file
+	envFilePath := filepath.Join(c.EnvironmentRoot(targetEnvName), DotEnvFileName)
+	envVars, err := godotenv.Read(envFilePath)
+
+	switch {
+	case errors.Is(err, os.ErrNotExist):
+		return "", nil
+	case err != nil:
+		return "", fmt.Errorf("reading environment .env file: %w", err)
+	}
+
+	if envType, exists := envVars["AZURE_ENV_TYPE"]; exists {
+		return envType, nil
+	}
+
+	return "", nil
+}
+
 // ProjectState represents the state of the project.
 type ProjectState struct {
 	DefaultEnvironment string
@@ -81,6 +158,7 @@ type ProjectState struct {
 // SetProjectState persists the state of the project to the file system, like the default environment.
 func (c *AzdContext) SetProjectState(state ProjectState) error {
 	path := filepath.Join(c.EnvironmentDirectory(), ConfigFileName)
+
 	config := configFile{
 		Version:            ConfigFileVersion,
 		DefaultEnvironment: state.DefaultEnvironment,
@@ -117,10 +195,52 @@ func NewAzdContext() (*AzdContext, error) {
 	return NewAzdContextFromWd(wd)
 }
 
+// hasValidProjectFile checks if a valid project file exists in the given directory.
+// It looks for azure.yaml first, then checks for azure.{envType}.yaml files where envType is valid.
+// Returns true if a valid project file is found, false otherwise.
+func hasValidProjectFile(searchDir string) bool {
+	// First check for the default azure.yaml (matching original logic exactly)
+	defaultProjectPath := filepath.Join(searchDir, ProjectFileName)
+	stat, err := os.Stat(defaultProjectPath)
+	if err == nil && !stat.IsDir() {
+		// Found azure.yaml and it's a file
+		return true
+	}
+	if err != nil && !os.IsNotExist(err) {
+		return false
+	}
+
+	// Then check for azure.{envType}.yaml files
+	entries, err := os.ReadDir(searchDir)
+	if err != nil {
+		return false
+	}
+
+	for _, entry := range entries {
+		if entry.IsDir() {
+			continue
+		}
+
+		filename := entry.Name()
+		// Check if filename matches azure.{envType}.yaml pattern
+		if strings.HasPrefix(filename, "azure.") && strings.HasSuffix(filename, ".yaml") {
+			envType := strings.TrimPrefix(filename, "azure.")
+			envType = strings.TrimSuffix(envType, ".yaml")
+
+			if envType != "" && environmentTypeRegexp.MatchString(envType) {
+				return true
+			}
+		}
+	}
+
+	return false
+}
+
 // Creates context with project directory set to the nearest project file found.
 //
 // The project file is first searched for in the working directory, if not found, the parent directory is searched
-// recursively up to root. If no project file is found, errNoProject is returned.
+// recursively up to root. The search looks for azure.yaml first, then for azure.{envType}.yaml files where envType
+// is a valid environment type. If no project file is found, errNoProject is returned.
 func NewAzdContextFromWd(wd string) (*AzdContext, error) {
 	// Walk up from the wd to the root, looking for a project file. If we find one, that's
 	// the root project directory.
@@ -130,26 +250,18 @@ func NewAzdContextFromWd(wd string) (*AzdContext, error) {
 	}
 
 	for {
-		projectFilePath := filepath.Join(searchDir, ProjectFileName)
-		stat, err := os.Stat(projectFilePath)
-		if os.IsNotExist(err) || (err == nil && stat.IsDir()) {
-			parent := filepath.Dir(searchDir)
-			if parent == searchDir {
-				return nil, ErrNoProject
-			}
-			searchDir = parent
-		} else if err == nil {
-			// We found our azure.yaml file, and searchDir is the directory
-			// that contains it.
-			break
-		} else {
-			return nil, fmt.Errorf("searching for project file: %w", err)
+		if hasValidProjectFile(searchDir) {
+			return &AzdContext{
+				projectDirectory: searchDir,
+			}, nil
 		}
-	}
 
-	return &AzdContext{
-		projectDirectory: searchDir,
-	}, nil
+		parent := filepath.Dir(searchDir)
+		if parent == searchDir {
+			return nil, ErrNoProject
+		}
+		searchDir = parent
+	}
 }
 
 type configFile struct {
diff --git a/cli/azd/pkg/environment/azdcontext/azdcontext_test.go b/cli/azd/pkg/environment/azdcontext/azdcontext_test.go
new file mode 100644
index 00000000000..bdeebde39b3
--- /dev/null
+++ b/cli/azd/pkg/environment/azdcontext/azdcontext_test.go
@@ -0,0 +1,222 @@
+// Copyright (c) Microsoft Corporation. All rights reserved.
+// Licensed under the MIT License.
+
+package azdcontext
+
+import (
+	"os"
+	"path/filepath"
+	"testing"
+
+	"github.com/azure/azure-dev/cli/azd/pkg/osutil"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+// setupTestEnv creates a test environment with the given name and environment type
+func setupTestEnv(t *testing.T, azdDir, envName, envType string) {
+	t.Helper()
+
+	envDir := filepath.Join(azdDir, envName)
+	require.NoError(t, os.MkdirAll(envDir, osutil.PermissionDirectory))
+
+	envPath := filepath.Join(envDir, DotEnvFileName)
+	content := "AZURE_ENV_NAME=" + envName + "\n"
+	if envType != "" {
+		content += "AZURE_ENV_TYPE=" + envType + "\n"
+	}
+	require.NoError(t, os.WriteFile(envPath, []byte(content), osutil.PermissionFileOwnerOnly))
+}
+
+// setupDefaultEnv sets up the default environment configuration
+func setupDefaultEnv(t *testing.T, azdDir, defaultEnvName string) {
+	t.Helper()
+
+	configPath := filepath.Join(azdDir, ConfigFileName)
+	config := `{"version": 1, "defaultEnvironment": "` + defaultEnvName + `"}`
+	require.NoError(t, os.WriteFile(configPath, []byte(config), osutil.PermissionFileOwnerOnly))
+}
+
+func TestProjectFileNameForEnvironment(t *testing.T) {
+	tests := []struct {
+		name       string
+		envName    string
+		envType    string
+		defaultEnv string
+		expected   string
+	}{
+		{
+			name:     "no default environment",
+			envName:  "",
+			expected: "azure.yaml",
+		},
+		{
+			name:     "dev type",
+			envName:  "TESTENV",
+			envType:  "dev",
+			expected: "azure.dev.yaml",
+		},
+		{
+			name:     "prod type",
+			envName:  "TESTENV",
+			envType:  "prod",
+			expected: "azure.prod.yaml",
+		},
+		{
+			name:     "non-existent environment",
+			envName:  "nonexistent",
+			expected: "azure.yaml",
+		},
+		{
+			name:     "existing environment without type",
+			envName:  "TESTENV",
+			envType:  "", // explicitly no type
+			expected: "azure.yaml",
+		},
+		{
+			name:       "default environment set",
+			envName:    "",
+			envType:    "dev",
+			defaultEnv: "TESTENV1",
+			expected:   "azure.dev.yaml",
+		},
+		{
+			name:       "default environment without type",
+			envName:    "",
+			envType:    "", // default env has no type
+			defaultEnv: "TESTENV",
+			expected:   "azure.yaml",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			azdCtx := NewAzdContextWithDirectory(t.TempDir())
+			azdDir := filepath.Join(azdCtx.ProjectDirectory(), EnvironmentDirectoryName)
+			require.NoError(t, os.MkdirAll(azdDir, osutil.PermissionDirectory))
+
+			// Setup test environment if specified
+			if tt.envName != "" {
+				setupTestEnv(t, azdDir, tt.envName, tt.envType)
+			}
+			if tt.defaultEnv != "" && tt.envName == "" {
+				setupTestEnv(t, azdDir, tt.defaultEnv, tt.envType)
+				setupDefaultEnv(t, azdDir, tt.defaultEnv)
+			}
+
+			fileName := azdCtx.ProjectFileNameForEnvironment(tt.envName)
+			assert.Equal(t, tt.expected, fileName)
+		})
+	}
+}
+
+func TestProjectPathForEnvironment(t *testing.T) {
+	tests := []struct {
+		name     string
+		envName  string
+		envType  string
+		expected string
+	}{
+		{
+			name:     "environment with type",
+			envName:  "TESTENV1",
+			envType:  "prod",
+			expected: "azure.prod.yaml",
+		},
+		{
+			name:     "default project path",
+			envName:  "",
+			expected: "azure.yaml",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			azdCtx := NewAzdContextWithDirectory(t.TempDir())
+			azdDir := filepath.Join(azdCtx.ProjectDirectory(), EnvironmentDirectoryName)
+			require.NoError(t, os.MkdirAll(azdDir, osutil.PermissionDirectory))
+
+			if tt.envType != "" {
+				setupTestEnv(t, azdDir, tt.envName, tt.envType)
+			}
+
+			var projectPath string
+			if tt.envName == "" {
+				projectPath = azdCtx.ProjectPath()
+			} else {
+				projectPath = azdCtx.ProjectPathForEnvironment(tt.envName)
+			}
+
+			expectedPath := filepath.Join(azdCtx.ProjectDirectory(), tt.expected)
+			assert.Equal(t, expectedPath, projectPath)
+		})
+	}
+}
+
+func TestGetEnvironmentType(t *testing.T) {
+	tests := []struct {
+		name           string
+		envName        string
+		envType        string
+		setupDefault   bool
+		defaultEnvName string
+		expected       string
+	}{
+		{
+			name:     "non-existent environment",
+			envName:  "nonexistent",
+			expected: "",
+		},
+		{
+			name:     "existing environment with type",
+			envName:  "TESTENV",
+			envType:  "dev",
+			expected: "dev",
+		},
+		{
+			name:     "existing environment without type",
+			envName:  "TESTENV",
+			envType:  "",
+			expected: "",
+		},
+		{
+			name:           "default environment with type",
+			envName:        "",
+			envType:        "dev",
+			setupDefault:   true,
+			defaultEnvName: "TESTENV",
+			expected:       "dev",
+		},
+		{
+			name:     "no default environment",
+			envName:  "",
+			expected: "",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			azdCtx := NewAzdContextWithDirectory(t.TempDir())
+			azdDir := filepath.Join(azdCtx.ProjectDirectory(), EnvironmentDirectoryName)
+			require.NoError(t, os.MkdirAll(azdDir, osutil.PermissionDirectory))
+
+			// Setup environment if needed
+			if tt.envName != "" || tt.defaultEnvName != "" {
+				envName := tt.envName
+				if envName == "" {
+					envName = tt.defaultEnvName
+				}
+				setupTestEnv(t, azdDir, envName, tt.envType)
+			}
+
+			// Setup default environment if needed
+			if tt.setupDefault {
+				setupDefaultEnv(t, azdDir, tt.defaultEnvName)
+			}
+
+			envType, err := azdCtx.GetEnvironmentType(tt.envName)
+			require.NoError(t, err)
+			assert.Equal(t, tt.expected, envType)
+		})
+	}
+}
diff --git a/cli/azd/pkg/environment/environment.go b/cli/azd/pkg/environment/environment.go
index dfa3f7dbd73..5f47e245337 100644
--- a/cli/azd/pkg/environment/environment.go
+++ b/cli/azd/pkg/environment/environment.go
@@ -21,6 +21,9 @@ import (
 // EnvNameEnvVarName is the name of the key used to store the envname property in the environment.
 const EnvNameEnvVarName = "AZURE_ENV_NAME"
 
+// EnvTypeEnvVarName is the name of the key used to store the environment type (e.g., dev, prod) in the .env file
+const EnvTypeEnvVarName = "AZURE_ENV_TYPE"
+
 // LocationEnvVarName is the name of the key used to store the location property in the environment.
 const LocationEnvVarName = "AZURE_LOCATION"
 
@@ -129,6 +132,9 @@ type EnvironmentResolver func(ctx context.Context) (*Environment, error)
 // https://docs.microsoft.com/azure/azure-resource-manager/management/resource-name-rules#microsoftresources)
 var EnvironmentNameRegexp = regexp.MustCompile(`^[a-zA-Z0-9-\(\)_\.]{1,64}$`)
 
+// Environment types should only contain alphanumeric characters
+var EnvironmentTypeRegexp = regexp.MustCompile(`^[a-zA-Z0-9]{1,32}$`)
+
 // The maximum length of an environment name.
 var EnvironmentNameMaxLength = 64
 
@@ -136,6 +142,10 @@ func IsValidEnvironmentName(name string) bool {
 	return EnvironmentNameRegexp.MatchString(name)
 }
 
+func IsValidEnvironmentType(envType string) bool {
+	return EnvironmentTypeRegexp.MatchString(envType)
+}
+
 // CleanName returns a version of [name] where all characters not allowed in an environment name have been replaced
 // with hyphens
 func CleanName(name string) string {
@@ -233,6 +243,17 @@ func (e *Environment) SetLocation(location string) {
 	e.DotenvSet(LocationEnvVarName, location)
 }
 
+// GetEnvironmentType returns the environment type (e.g., dev, prod) from the
+// .env file, or an empty string if not set.
+func (e *Environment) GetEnvironmentType() string {
+	return e.Getenv(EnvTypeEnvVarName)
+}
+
+// SetEnvironmentType sets the environment type (e.g., dev, prod) in the .env file.
+func (e *Environment) SetEnvironmentType(envType string) {
+	e.DotenvSet(EnvTypeEnvVarName, envType)
+}
+
 // Key returns the environment key name for the given name.
 func Key(name string) string {
 	return strings.ReplaceAll(strings.ToUpper(name), "-", "_")
diff --git a/cli/azd/pkg/environment/environment_test.go b/cli/azd/pkg/environment/environment_test.go
index fc1f90df283..7a27193f65f 100644
--- a/cli/azd/pkg/environment/environment_test.go
+++ b/cli/azd/pkg/environment/environment_test.go
@@ -273,3 +273,67 @@ func createEnvManager(mockContext *mocks.MockContext, root string) (Manager, *az
 
 	return newManagerForTest(azdCtx, mockContext.Console, localDataStore, nil), azdCtx
 }
+
+func TestEnvironmentType(t *testing.T) {
+	t.Parallel()
+
+	t.Run("GetEnvironmentType_FromDotEnv", func(t *testing.T) {
+		env := NewWithValues("test", map[string]string{
+			"AZURE_ENV_NAME": "test",
+			"AZURE_ENV_TYPE": "development",
+		})
+
+		envType := env.GetEnvironmentType()
+		assert.Equal(t, "development", envType)
+	})
+
+	t.Run("GetEnvironmentType_Empty", func(t *testing.T) {
+		env := New("test")
+
+		envType := env.GetEnvironmentType()
+		assert.Equal(t, "", envType)
+	})
+
+	t.Run("SetEnvironmentType", func(t *testing.T) {
+		env := New("test")
+
+		env.SetEnvironmentType("production")
+		envType := env.GetEnvironmentType()
+		assert.Equal(t, "production", envType)
+
+		// Verify it's also in the dotenv map
+		dotenv := env.Dotenv()
+		assert.Equal(t, "production", dotenv["AZURE_ENV_TYPE"])
+	})
+
+	t.Run("SetEnvironmentType_Override", func(t *testing.T) {
+		env := NewWithValues("test", map[string]string{
+			"AZURE_ENV_NAME": "test",
+			"AZURE_ENV_TYPE": "development",
+		})
+
+		// Change the environment type
+		env.SetEnvironmentType("staging")
+		envType := env.GetEnvironmentType()
+		assert.Equal(t, "staging", envType)
+	})
+}
+
+func TestIsValidEnvironmentType(t *testing.T) {
+	t.Parallel()
+
+	assert.True(t, IsValidEnvironmentType("dev"))
+	assert.True(t, IsValidEnvironmentType("development"))
+	assert.True(t, IsValidEnvironmentType("prod"))
+	assert.True(t, IsValidEnvironmentType("production"))
+	assert.True(t, IsValidEnvironmentType("staging"))
+	assert.True(t, IsValidEnvironmentType("test123"))
+	assert.True(t, IsValidEnvironmentType("TEST"))
+
+	assert.False(t, IsValidEnvironmentType(""))
+	assert.False(t, IsValidEnvironmentType("dev-env"))                           // hyphen not allowed
+	assert.False(t, IsValidEnvironmentType("dev_env"))                           // underscore not allowed
+	assert.False(t, IsValidEnvironmentType("dev env"))                           // space not allowed
+	assert.False(t, IsValidEnvironmentType("dev.env"))                           // dot not allowed
+	assert.False(t, IsValidEnvironmentType("123456789012345678901234567890123")) // too long
+}
diff --git a/cli/azd/pkg/environment/manager.go b/cli/azd/pkg/environment/manager.go
index 3f0413adb06..b25100d60e6 100644
--- a/cli/azd/pkg/environment/manager.go
+++ b/cli/azd/pkg/environment/manager.go
@@ -37,6 +37,7 @@ type Spec struct {
 	Name         string
 	Subscription string
 	Location     string
+	Type         string
 	// suggest is the name that is offered as a suggestion if we need to prompt the user for an environment name.
 	Examples []string
 }
@@ -66,6 +67,11 @@ type Manager interface {
 	// If the name is empty, the user is prompted to select or create an environment.
 	// If the environment does not exist, the user is prompted to create it.
 	LoadOrInitInteractive(ctx context.Context, name string) (*Environment, error)
+
+	// Loads the environment with the given name, with optional environment type for creation.
+	// If the name is empty, the user is prompted to select or create an environment.
+	// If the environment does not exist, the user is prompted to create it with the specified type.
+	LoadOrInitInteractiveWithType(ctx context.Context, name, envType string) (*Environment, error)
 	List(ctx context.Context) ([]*Description, error)
 
 	// Get returns the existing environment with the given name.
@@ -137,6 +143,10 @@ func (m *manager) Create(ctx context.Context, spec Spec) (*Environment, error) {
 		return nil, err
 	}
 
+	if err := m.ensureValidEnvironmentType(ctx, spec.Type); err != nil {
+		return nil, err
+	}
+
 	// Ensure the environment does not already exist:
 	_, err := m.Get(ctx, spec.Name)
 	switch {
@@ -157,6 +167,10 @@ func (m *manager) Create(ctx context.Context, spec Spec) (*Environment, error) {
 		env.SetLocation(spec.Location)
 	}
 
+	if spec.Type != "" {
+		env.SetEnvironmentType(spec.Type)
+	}
+
 	if err := m.SaveWithOptions(ctx, env, &SaveOptions{IsNew: true}); err != nil {
 		return nil, err
 	}
@@ -165,7 +179,11 @@ func (m *manager) Create(ctx context.Context, spec Spec) (*Environment, error) {
 }
 
 func (m *manager) LoadOrInitInteractive(ctx context.Context, environmentName string) (*Environment, error) {
-	env, isNew, err := m.loadOrInitEnvironment(ctx, environmentName)
+	return m.LoadOrInitInteractiveWithType(ctx, environmentName, "")
+}
+
+func (m *manager) LoadOrInitInteractiveWithType(ctx context.Context, environmentName, envType string) (*Environment, error) {
+	env, isNew, err := m.loadOrInitEnvironmentWithType(ctx, environmentName, envType)
 	switch {
 	case errors.Is(err, ErrNotFound):
 		return nil, fmt.Errorf("environment %s does not exist", environmentName)
@@ -224,7 +242,11 @@ func (m *manager) LoadOrInitInteractive(ctx context.Context, environmentName str
 	return env, nil
 }
 
-func (m *manager) loadOrInitEnvironment(ctx context.Context, environmentName string) (*Environment, bool, error) {
+func (m *manager) loadOrInitEnvironmentWithType(
+	ctx context.Context,
+	environmentName,
+	envType string,
+) (*Environment, bool, error) {
 	// If there's a default environment, use that
 	if environmentName == "" {
 		var err error
@@ -313,13 +335,23 @@ func (m *manager) loadOrInitEnvironment(ctx context.Context, environmentName str
 	// Create the environment
 	spec := &Spec{
 		Name: environmentName,
+		Type: envType,
 	}
 
 	if err := m.ensureValidEnvironmentName(ctx, spec); err != nil {
 		return nil, false, err
 	}
 
-	return New(spec.Name), true, nil
+	if err := m.ensureValidEnvironmentType(ctx, envType); err != nil {
+		return nil, false, err
+	}
+
+	env := New(spec.Name)
+	if envType != "" {
+		env.SetEnvironmentType(envType)
+	}
+
+	return env, true, nil
 }
 
 // ConfigPath returns the path to the environment config file
@@ -519,7 +551,29 @@ func (m *manager) ensureValidEnvironmentName(ctx context.Context, spec *Spec) er
 
 func invalidEnvironmentNameMsg(environmentName string) string {
 	return fmt.Sprintf(
-		"environment name '%s' is invalid (it should contain only alphanumeric characters and hyphens)\n",
+		"environment name '%s' is invalid (it should contain only alphanumeric characters and hyphens)",
 		environmentName,
 	)
 }
+
+func invalidEnvironmentTypeMsg(environmentType string) string {
+	return fmt.Sprintf(
+		"environment type '%s' is invalid (it should contain only alphanumeric characters)",
+		environmentType,
+	)
+}
+
+// ensureValidEnvironmentType validates environment type and outputs error message to console if invalid
+func (m *manager) ensureValidEnvironmentType(ctx context.Context, envType string) error {
+	if envType == "" {
+		return nil // Empty environment type is allowed
+	}
+
+	if !IsValidEnvironmentType(envType) {
+		errMsg := invalidEnvironmentTypeMsg(envType)
+		m.console.Message(ctx, errMsg)
+		return errors.New(errMsg)
+	}
+
+	return nil
+}
diff --git a/cli/azd/pkg/environment/manager_test.go b/cli/azd/pkg/environment/manager_test.go
index 624652d5a26..8acd0e5007f 100644
--- a/cli/azd/pkg/environment/manager_test.go
+++ b/cli/azd/pkg/environment/manager_test.go
@@ -364,6 +364,143 @@ func Test_EnvManager_CreateFromContainer(t *testing.T) {
 	})
 }
 
+func Test_EnvManager_CreateWithType(t *testing.T) {
+	t.Run("success", func(t *testing.T) {
+		mockContext := mocks.NewMockContext(context.Background())
+		envManager := createEnvManagerForManagerTest(t, mockContext)
+
+		spec := Spec{
+			Name:         "test-env",
+			Subscription: "test-subscription",
+			Location:     "eastus",
+			Type:         "development",
+		}
+
+		env, err := envManager.Create(*mockContext.Context, spec)
+		require.NoError(t, err)
+		require.NotNil(t, env)
+		require.Equal(t, "test-env", env.Name())
+		require.Equal(t, "test-subscription", env.GetSubscriptionId())
+		require.Equal(t, "eastus", env.GetLocation())
+		require.Equal(t, "development", env.GetEnvironmentType())
+
+		// Verify it's in the dotenv
+		dotenv := env.Dotenv()
+		require.Equal(t, "development", dotenv["AZURE_ENV_TYPE"])
+	})
+}
+
+func Test_EnvManager_LoadOrInitInteractiveWithType(t *testing.T) {
+	t.Run("creates new environment with type when not exists", func(t *testing.T) {
+		mockContext := mocks.NewMockContext(context.Background())
+		mockContext.Console.WhenConfirm(func(options input.ConsoleOptions) bool {
+			return strings.Contains(options.Message, "would you like to create it?")
+		}).Respond(true)
+
+		envManager := createEnvManagerForManagerTest(t, mockContext)
+
+		// Test creating new environment with type
+		envName := "new-test-env"
+		envType := "production"
+
+		env, err := envManager.LoadOrInitInteractiveWithType(*mockContext.Context, envName, envType)
+		require.NoError(t, err)
+		require.NotNil(t, env)
+		require.Equal(t, envName, env.Name())
+		require.Equal(t, envType, env.GetEnvironmentType())
+
+		// Verify it's in the dotenv
+		dotenv := env.Dotenv()
+		require.Equal(t, envType, dotenv["AZURE_ENV_TYPE"])
+	})
+
+	t.Run("loads existing environment ignoring type parameter", func(t *testing.T) {
+		mockContext := mocks.NewMockContext(context.Background())
+		envManager := createEnvManagerForManagerTest(t, mockContext)
+
+		// First create an environment with one type
+		originalType := "development"
+		envName := "existing-env"
+
+		mockContext.Console.WhenConfirm(func(options input.ConsoleOptions) bool {
+			return strings.Contains(options.Message, "would you like to create it?")
+		}).Respond(true)
+
+		env1, err := envManager.LoadOrInitInteractiveWithType(*mockContext.Context, envName, originalType)
+		require.NoError(t, err)
+		require.Equal(t, originalType, env1.GetEnvironmentType())
+
+		// Now try to load the same environment with a different type - should ignore the new type
+		differentType := "production"
+		env2, err := envManager.LoadOrInitInteractiveWithType(*mockContext.Context, envName, differentType)
+		require.NoError(t, err)
+		require.Equal(t, envName, env2.Name())
+		// Should still have the original type, not the new one
+		require.Equal(t, originalType, env2.GetEnvironmentType())
+	})
+
+	t.Run("creates new environment without type when empty type provided", func(t *testing.T) {
+		mockContext := mocks.NewMockContext(context.Background())
+		mockContext.Console.WhenConfirm(func(options input.ConsoleOptions) bool {
+			return strings.Contains(options.Message, "would you like to create it?")
+		}).Respond(true)
+
+		envManager := createEnvManagerForManagerTest(t, mockContext)
+
+		envName := "no-type-env"
+
+		env, err := envManager.LoadOrInitInteractiveWithType(*mockContext.Context, envName, "")
+		require.NoError(t, err)
+		require.NotNil(t, env)
+		require.Equal(t, envName, env.Name())
+		require.Equal(t, "", env.GetEnvironmentType())
+
+		// Verify AZURE_ENV_TYPE is not set in dotenv when no type specified
+		dotenv := env.Dotenv()
+		require.NotContains(t, dotenv, "AZURE_ENV_TYPE")
+	})
+
+	t.Run("delegates to LoadOrInitInteractive when no type specified", func(t *testing.T) {
+		mockContext := mocks.NewMockContext(context.Background())
+		mockContext.Console.WhenConfirm(func(options input.ConsoleOptions) bool {
+			return strings.Contains(options.Message, "would you like to create it?")
+		}).Respond(true)
+
+		envManager := createEnvManagerForManagerTest(t, mockContext)
+
+		envName := "delegate-test-env"
+
+		// Both methods should produce the same result when no type is specified
+		env1, err1 := envManager.LoadOrInitInteractive(*mockContext.Context, envName)
+		require.NoError(t, err1)
+
+		// Create another environment with the new method but empty type
+		envName2 := "delegate-test-env-2"
+		env2, err2 := envManager.LoadOrInitInteractiveWithType(*mockContext.Context, envName2, "")
+		require.NoError(t, err2)
+
+		// Both should have empty environment type
+		require.Equal(t, "", env1.GetEnvironmentType())
+		require.Equal(t, "", env2.GetEnvironmentType())
+	})
+
+	t.Run("validates environment type and returns error for invalid type", func(t *testing.T) {
+		mockContext := mocks.NewMockContext(context.Background())
+		mockContext.Console.WhenConfirm(func(options input.ConsoleOptions) bool {
+			return strings.Contains(options.Message, "would you like to create it?")
+		}).Respond(true)
+
+		envManager := createEnvManagerForManagerTest(t, mockContext)
+
+		envName := "test-env"
+		invalidEnvType := "invalid-type-with-hyphens" // hyphens not allowed in environment type
+
+		_, err := envManager.LoadOrInitInteractiveWithType(*mockContext.Context, envName, invalidEnvType)
+		require.Error(t, err)
+		require.Contains(t, err.Error(), "environment type 'invalid-type-with-hyphens' is invalid")
+	})
+}
+
 func registerContainerComponents(t *testing.T, mockContext *mocks.MockContext) {
 	mockContext.Container.MustRegisterSingleton(func() context.Context {
 		return *mockContext.Context
diff --git a/cli/azd/pkg/pipeline/github_provider.go b/cli/azd/pkg/pipeline/github_provider.go
index 7a156471659..4c2a9086b6c 100644
--- a/cli/azd/pkg/pipeline/github_provider.go
+++ b/cli/azd/pkg/pipeline/github_provider.go
@@ -458,13 +458,22 @@ func (p *GitHubCiProvider) setPipelineVariables(
 	infraOptions provisioning.Options,
 	tenantId, clientId string,
 ) error {
-	for name, value := range map[string]string{
+	vars := map[string]string{
 		environment.EnvNameEnvVarName:        p.env.Name(),
 		environment.LocationEnvVarName:       p.env.GetLocation(),
 		environment.SubscriptionIdEnvVarName: p.env.GetSubscriptionId(),
 		environment.TenantIdEnvVarName:       tenantId,
 		"AZURE_CLIENT_ID":                    clientId,
-	} {
+	}
+
+	if envType := p.env.GetEnvironmentType(); envType != "" {
+		vars[environment.EnvTypeEnvVarName] = envType
+	}
+
+	for name, value := range vars {
+		if value == "" {
+			continue
+		}
 		if err := p.ghCli.SetVariable(ctx, repoSlug, name, value); err != nil {
 			return fmt.Errorf("failed setting %s variable: %w", name, err)
 		}
diff --git a/cli/azd/pkg/pipeline/pipeline.go b/cli/azd/pkg/pipeline/pipeline.go
index fd6cd8fb23b..8b3265e93c5 100644
--- a/cli/azd/pkg/pipeline/pipeline.go
+++ b/cli/azd/pkg/pipeline/pipeline.go
@@ -330,6 +330,7 @@ type projectProperties struct {
 	Secrets               []string
 	RequiredAlphaFeatures []string
 	providerParameters    []provisioning.Parameter
+	EnvType               string
 }
 
 type authConfiguration struct {
diff --git a/cli/azd/pkg/pipeline/pipeline_manager.go b/cli/azd/pkg/pipeline/pipeline_manager.go
index 471efa2dd90..7b8a6664d64 100644
--- a/cli/azd/pkg/pipeline/pipeline_manager.go
+++ b/cli/azd/pkg/pipeline/pipeline_manager.go
@@ -1276,6 +1276,11 @@ func generatePipelineDefinition(path string, props projectProperties) error {
 		}
 	}
 
+	// Determines which azure.<type>.yaml file azd uses to provision in pipeline
+	if props.EnvType != "" && !slices.Contains(tmplContext.Variables, "AZURE_ENV_TYPE") {
+		tmplContext.Variables = append(tmplContext.Variables, "AZURE_ENV_TYPE")
+	}
+
 	if props.InfraProvider == infraProviderTerraform {
 		// terraform provider does not resolve this variables automatically, AZD needs to define them
 		tmplContext.Variables = append(tmplContext.Variables, "AZURE_LOCATION")
@@ -1449,6 +1454,7 @@ func (pm *PipelineManager) ensurePipelineDefinition(ctx context.Context) error {
 			Secrets:               pm.prjConfig.Pipeline.Secrets,
 			RequiredAlphaFeatures: requiredAlphaFeatures,
 			providerParameters:    pm.configOptions.providerParameters,
+			EnvType:               pm.env.GetEnvironmentType(),
 		})
 	if err != nil {
 		return err
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_App_host_-_fed_Cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_App_host_-_fed_Cred.snap
index b026ef1049d..d6e6e7cb15a 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_App_host_-_fed_Cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_App_host_-_fed_Cred.snap
@@ -9,16 +9,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_branch_name.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_branch_name.snap
index 931f10f8d02..3f7c6797c85 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_branch_name.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_branch_name.snap
@@ -9,16 +9,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_client_cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_client_cred.snap
index 5b9b227c950..b6f956baa82 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_client_cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_client_cred.snap
@@ -9,16 +9,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_fed_Cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_fed_Cred.snap
index 5b9b227c950..b6f956baa82 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_fed_Cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_fed_Cred.snap
@@ -9,16 +9,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_variables_and_secrets.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_variables_and_secrets.snap
index 7912264554c..91ee8f6b969 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_variables_and_secrets.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_azdo_selected_-_no_app_host_-_variables_and_secrets.snap
@@ -9,16 +9,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_App_host_-_fed_Cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_App_host_-_fed_Cred.snap
index 40bfa7c920b..b87dad4556e 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_App_host_-_fed_Cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_App_host_-_fed_Cred.snap
@@ -24,8 +24,10 @@ jobs:
     steps:
       - name: Checkout
         uses: actions/checkout@v4
+      # - name: Install azd
+      #   uses: Azure/setup-azd@v2
       - name: Install azd
-        uses: Azure/setup-azd@v2
+        run: curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
       - name: Setup .NET
         uses: actions/setup-dotnet@v4
         with:
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_Variables_and_Secrets.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_Variables_and_Secrets.snap
index 2e57caaf9fe..9c1402d3596 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_Variables_and_Secrets.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_Variables_and_Secrets.snap
@@ -26,8 +26,10 @@ jobs:
     steps:
       - name: Checkout
         uses: actions/checkout@v4
+      # - name: Install azd
+      #   uses: Azure/setup-azd@v2
       - name: Install azd
-        uses: Azure/setup-azd@v2
+        run: curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
       - name: Setup .NET
         uses: actions/setup-dotnet@v4
         with:
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_branch_name.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_branch_name.snap
index 5f299008abf..1a03f934292 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_branch_name.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_branch_name.snap
@@ -24,8 +24,10 @@ jobs:
     steps:
       - name: Checkout
         uses: actions/checkout@v4
+      # - name: Install azd
+      #   uses: Azure/setup-azd@v2
       - name: Install azd
-        uses: Azure/setup-azd@v2
+        run: curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
       - name: Log in with Azure (Federated Credentials)
         run: |
           azd auth login `
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_client_cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_client_cred.snap
index 63eac357512..44273280d70 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_client_cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_client_cred.snap
@@ -19,8 +19,10 @@ jobs:
     steps:
       - name: Checkout
         uses: actions/checkout@v4
+      # - name: Install azd
+      #   uses: Azure/setup-azd@v2
       - name: Install azd
-        uses: Azure/setup-azd@v2
+        run: curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
       - name: Log in with Azure (Client Credentials)
         run: |
           $info = $Env:AZURE_CREDENTIALS | ConvertFrom-Json -AsHashtable;
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_fed_Cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_fed_Cred.snap
index 25732faa1be..4eb93bff6dd 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_fed_Cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles-no_files_-_github_selected_-_no_app_host_-_fed_Cred.snap
@@ -24,8 +24,10 @@ jobs:
     steps:
       - name: Checkout
         uses: actions/checkout@v4
+      # - name: Install azd
+      #   uses: Azure/setup-azd@v2
       - name: Install azd
-        uses: Azure/setup-azd@v2
+        run: curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
       - name: Log in with Azure (Federated Credentials)
         run: |
           azd auth login `
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_client_cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_client_cred.snap
index 5b9b227c950..b6f956baa82 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_client_cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_client_cred.snap
@@ -9,16 +9,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_fed_Cred.snap b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_fed_Cred.snap
index 5b9b227c950..b6f956baa82 100644
--- a/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_fed_Cred.snap
+++ b/cli/azd/pkg/pipeline/testdata/Test_promptForCiFiles_azureDevOpsDirectory-no_files_-_azdo_selected_-_azuredevops_dir_-_fed_Cred.snap
@@ -9,16 +9,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/resources/pipeline/.azdo/azure-dev.ymlt b/cli/azd/resources/pipeline/.azdo/azure-dev.ymlt
index be177aadf92..3df56d8a68a 100644
--- a/cli/azd/resources/pipeline/.azdo/azure-dev.ymlt
+++ b/cli/azd/resources/pipeline/.azdo/azure-dev.ymlt
@@ -10,16 +10,16 @@ steps:
   # setup-azd@1 needs to be manually installed in your organization
   # if you can't install it, you can use the below bash script to install azd
   # and remove this step
-  - task: setup-azd@1
-    displayName: Install azd
+  # - task: setup-azd@1
+  #   displayName: Install azd
 
   # If you can't install above task in your organization, you can comment it and uncomment below task to install azd
-  # - task: Bash@3
-  #   displayName: Install azd
-  #   inputs:
-  #     targetType: 'inline'
-  #     script: |
-  #       curl -fsSL https://aka.ms/install-azd.sh | bash
+  - task: Bash@3
+    displayName: Install azd
+    inputs:
+      targetType: 'inline'
+      script: |
+        curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 
   # azd delegate auth to az to use service connection with AzureCLI@2
   - pwsh: |
diff --git a/cli/azd/resources/pipeline/.github/azure-dev.ymlt b/cli/azd/resources/pipeline/.github/azure-dev.ymlt
index a79661e3c64..cdb072134c2 100644
--- a/cli/azd/resources/pipeline/.github/azure-dev.ymlt
+++ b/cli/azd/resources/pipeline/.github/azure-dev.ymlt
@@ -40,8 +40,10 @@ jobs:
     steps:
       - name: Checkout
         uses: actions/checkout@v4
+      # - name: Install azd
+      #   uses: Azure/setup-azd@v2
       - name: Install azd
-        uses: Azure/setup-azd@v2
+        run: curl -fsSL https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412/install-azd.sh | bash -s -- --base-url https://azuresdkartifacts.z5.web.core.windows.net/azd/standalone/pr/5412 --version '' --verbose --skip-verify
 {{- if .IsTerraform}}
       - name: Install Terraform
         uses: hashicorp/setup-terraform@v3
diff --git a/cli/azd/test/mocks/mockenv/mock_manager.go b/cli/azd/test/mocks/mockenv/mock_manager.go
index b3db301cfc7..f9948eb1d41 100644
--- a/cli/azd/test/mocks/mockenv/mock_manager.go
+++ b/cli/azd/test/mocks/mockenv/mock_manager.go
@@ -24,6 +24,15 @@ func (m *MockEnvManager) LoadOrInitInteractive(ctx context.Context, name string)
 	return args.Get(0).(*environment.Environment), args.Error(1)
 }
 
+func (m *MockEnvManager) LoadOrInitInteractiveWithType(
+	ctx context.Context,
+	name,
+	envType string,
+) (*environment.Environment, error) {
+	args := m.Called(ctx, name, envType)
+	return args.Get(0).(*environment.Environment), args.Error(1)
+}
+
 func (m *MockEnvManager) List(ctx context.Context) ([]*environment.Description, error) {
 	args := m.Called(ctx)
 	return args.Get(0).([]*environment.Description), args.Error(1)