diff --git a/libs/jsonschema/extension.go b/libs/jsonschema/extension.go
index ffb77bd834..9127a0d61b 100644
--- a/libs/jsonschema/extension.go
+++ b/libs/jsonschema/extension.go
@@ -26,4 +26,8 @@ type Extension struct {
 	// If the CLI version is less than this value, then validation for this
 	// schema will fail.
 	MinDatabricksCliVersion string `json:"min_databricks_cli_version,omitempty"`
+
+	// Version of the schema. This is used to determine if the schema is
+	// compatible with the current CLI version.
+	Version *int `json:"version,omitempty"`
 }
diff --git a/libs/template/config.go b/libs/template/config.go
index 51283e035f..508e773678 100644
--- a/libs/template/config.go
+++ b/libs/template/config.go
@@ -9,6 +9,9 @@ import (
 	"golang.org/x/exp/maps"
 )
 
+// The latest template schema version supported by the CLI
+const latestSchemaVersion = 1
+
 type config struct {
 	ctx    context.Context
 	values map[string]any
@@ -49,6 +52,9 @@ func validateSchema(schema *jsonschema.Schema) error {
 			return fmt.Errorf("property type %s is not supported by bundle templates", v.Type)
 		}
 	}
+	if schema.Version != nil && *schema.Version > latestSchemaVersion {
+		return fmt.Errorf("template schema version %d is not supported by this version of the CLI. Please upgrade your CLI to the latest version", *schema.Version)
+	}
 	return nil
 }
 
diff --git a/libs/template/config_test.go b/libs/template/config_test.go
index 69e7054fec..d76952dc84 100644
--- a/libs/template/config_test.go
+++ b/libs/template/config_test.go
@@ -2,6 +2,7 @@ package template
 
 import (
 	"context"
+	"fmt"
 	"testing"
 
 	"github.com/databricks/cli/cmd/root"
@@ -150,6 +151,40 @@ func TestTemplateValidateSchema(t *testing.T) {
 	assert.EqualError(t, err, "property type array is not supported by bundle templates")
 }
 
+func TestTemplateValidateSchemaVersion(t *testing.T) {
+	version := latestSchemaVersion
+	schema := jsonschema.Schema{
+		Extension: jsonschema.Extension{
+			Version: &version,
+		},
+	}
+	assert.NoError(t, validateSchema(&schema))
+
+	version = latestSchemaVersion + 1
+	schema = jsonschema.Schema{
+		Extension: jsonschema.Extension{
+			Version: &version,
+		},
+	}
+	assert.EqualError(t, validateSchema(&schema), fmt.Sprintf("template schema version %d is not supported by this version of the CLI. Please upgrade your CLI to the latest version", version))
+
+	version = 5000
+	schema = jsonschema.Schema{
+		Extension: jsonschema.Extension{
+			Version: &version,
+		},
+	}
+	assert.EqualError(t, validateSchema(&schema), "template schema version 5000 is not supported by this version of the CLI. Please upgrade your CLI to the latest version")
+
+	version = 0
+	schema = jsonschema.Schema{
+		Extension: jsonschema.Extension{
+			Version: &version,
+		},
+	}
+	assert.NoError(t, validateSchema(&schema))
+}
+
 func TestTemplateEnumValidation(t *testing.T) {
 	schema := jsonschema.Schema{
 		Properties: map[string]*jsonschema.Schema{