diff --git a/CMakeLists.txt b/CMakeLists.txt
index 00f6b66..2dc4555 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -1,12 +1,17 @@
 cmake_minimum_required(VERSION 3.15)
 
 project(aare 
-    VERSION 1.0.0
     DESCRIPTION "Data processing library for PSI detectors"
     HOMEPAGE_URL "https://github.com/slsdetectorgroup/aare"
     LANGUAGES C CXX 
 )
 
+# Read VERSION file into project version
+set(VERSION_FILE "${CMAKE_CURRENT_SOURCE_DIR}/VERSION")
+file(READ "${VERSION_FILE}" VERSION_CONTENT)
+string(STRIP "${VERSION_CONTENT}" PROJECT_VERSION_STRING)
+set(PROJECT_VERSION ${PROJECT_VERSION_STRING})
+
 set(CMAKE_CXX_STANDARD 17) 
 set(CMAKE_CXX_STANDARD_REQUIRED ON)
 set(CMAKE_CXX_EXTENSIONS OFF)
diff --git a/VERSION b/VERSION
new file mode 100644
index 0000000..bd52db8
--- /dev/null
+++ b/VERSION
@@ -0,0 +1 @@
+0.0.0
\ No newline at end of file
diff --git a/conda-recipe/meta.yaml b/conda-recipe/meta.yaml
index bfa6323..8fea745 100644
--- a/conda-recipe/meta.yaml
+++ b/conda-recipe/meta.yaml
@@ -1,6 +1,10 @@
+source:
+  path: ../
+
+{% set version = load_file_regex(load_file = 'VERSION', regex_pattern = '(\d+(?:\.\d+)*(?:[\+\w\.]+))').group(1) %}
 package:
   name: aare
-  version: 2025.4.22 #TODO! how to not duplicate this?
+  version: {{version}}
 
 source:
   path: ..
diff --git a/pyproject.toml b/pyproject.toml
index 7415062..db3cb3c 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,10 +1,16 @@
+[tool.scikit-build.metadata.version]
+provider = "scikit_build_core.metadata.regex"
+input = "VERSION"
+regex = '^(?P<version>\d+(?:\.\d+)*(?:[\.\+\w]+)?)$'
+result = "{version}" 
+
 [build-system]
 requires = ["scikit-build-core>=0.10", "pybind11", "numpy"]
 build-backend = "scikit_build_core.build"
 
 [project]
 name = "aare"
-version = "2025.4.22"
+dynamic = ["version"]
 requires-python = ">=3.11"
 dependencies = [
     "numpy",
diff --git a/update_version.py b/update_version.py
new file mode 100644
index 0000000..476895a
--- /dev/null
+++ b/update_version.py
@@ -0,0 +1,57 @@
+# SPDX-License-Identifier: LGPL-3.0-or-other
+# Copyright (C) 2021 Contributors to the Aare Package
+"""
+Script to update VERSION file with semantic versioning if provided as an argument, or with 0.0.0 if no argument is provided.
+"""
+
+import sys
+import os
+import re
+
+from packaging.version import Version, InvalidVersion
+
+
+SCRIPT_DIR = os.path.dirname(os.path.abspath(__file__))
+
+def is_integer(value): 
+    try:
+        int(value)
+    except ValueError:
+        return False
+    else:
+        return True
+
+
+def get_version():
+
+    # Check at least one argument is passed
+    if len(sys.argv) < 2:
+        return "0.0.0"
+
+    version = sys.argv[1]
+
+    try:
+        v = Version(version)  # normalize check if version follows PEP 440 specification
+        
+        version_normalized = version.replace("-", ".")
+
+        version_normalized =  re.sub(r'0*(\d+)', lambda m : str(int(m.group(0))), version_normalized) #remove leading zeros 
+
+        return version_normalized 
+
+    except InvalidVersion as e:
+        print(f"Invalid version {version}. Version format must follow semantic versioning format of python PEP 440 version identification specification.")
+        sys.exit(1)
+    
+
+def write_version_to_file(version):
+    version_file_path = os.path.join(SCRIPT_DIR, "VERSION")
+    with open(version_file_path, "w") as version_file:
+        version_file.write(version)
+    print(f"Version {version} written to VERSION file.")
+
+# Main script
+if __name__ == "__main__":
+
+    version = get_version()
+    write_version_to_file(version)
\ No newline at end of file