diff --git a/pkg/plugin/external/types.go b/pkg/plugin/external/types.go
index 35200eb10f9..0e708aec0fe 100644
--- a/pkg/plugin/external/types.go
+++ b/pkg/plugin/external/types.go
@@ -17,7 +17,7 @@ limitations under the License.
 package external
 
 import (
-	v3cfg "sigs.k8s.io/kubebuilder/v3/pkg/config/v3"
+	"sigs.k8s.io/kubebuilder/v3/pkg/config"
 	"sigs.k8s.io/kubebuilder/v3/pkg/plugin"
 )
 
@@ -40,7 +40,7 @@ type PluginRequest struct {
 	Universe map[string]string `json:"universe"`
 
 	// Config stores the project configuration file.
-	Config v3cfg.Cfg `json:"config"`
+	Config config.Config `json:"config"`
 }
 
 // PluginResponse is returned to kubebuilder by the plugin and contains all files
@@ -71,7 +71,7 @@ type PluginResponse struct {
 	Flags []Flag `json:"flags,omitempty"`
 
 	// Config stores the project configuration file.
-	Config v3cfg.Cfg `json:"config"`
+	Config config.Config `json:"config"`
 }
 
 // Flag is meant to represent a CLI flag that is used by Kubebuilder to define flags that are parsed
diff --git a/pkg/plugins/external/api.go b/pkg/plugins/external/api.go
index 6ea00fa7fdf..dac2de1791b 100644
--- a/pkg/plugins/external/api.go
+++ b/pkg/plugins/external/api.go
@@ -17,10 +17,11 @@ limitations under the License.
 package external
 
 import (
+	"github.com/spf13/afero"
 	"github.com/spf13/pflag"
 
 	"sigs.k8s.io/kubebuilder/v3/pkg/config"
-	v3cfg "sigs.k8s.io/kubebuilder/v3/pkg/config/v3"
+	"sigs.k8s.io/kubebuilder/v3/pkg/config/store/yaml"
 	"sigs.k8s.io/kubebuilder/v3/pkg/machinery"
 	"sigs.k8s.io/kubebuilder/v3/pkg/model/resource"
 	"sigs.k8s.io/kubebuilder/v3/pkg/plugin"
@@ -53,13 +54,16 @@ func (p *createAPISubcommand) BindFlags(fs *pflag.FlagSet) {
 }
 
 func (p *createAPISubcommand) Scaffold(fs machinery.Filesystem) error {
-	cfg := p.config.(*v3cfg.Cfg)
+	cfg := yaml.New(machinery.Filesystem{FS: afero.NewOsFs()})
+	if err := cfg.Load(); err != nil {
+		return err
+	}
 
 	req := external.PluginRequest{
 		APIVersion: defaultAPIVersion,
 		Command:    "create api",
 		Args:       p.Args,
-		Config:     *cfg,
+		Config:     cfg.Config(),
 	}
 
 	err := handlePluginResponse(fs, req, p.Path, p)
diff --git a/pkg/plugins/external/helpers.go b/pkg/plugins/external/helpers.go
index 15b5147c9ad..b6acfae1531 100644
--- a/pkg/plugins/external/helpers.go
+++ b/pkg/plugins/external/helpers.go
@@ -176,7 +176,7 @@ func handlePluginResponse(fs machinery.Filesystem, req external.PluginRequest, p
 	}
 
 	// update the config
-	if err := p.InjectConfig(&res.Config); err != nil {
+	if err := p.InjectConfig(res.Config); err != nil {
 		return fmt.Errorf("error injecting the updated config from PluginResponse: %w", err)
 	}
 
diff --git a/pkg/plugins/external/init.go b/pkg/plugins/external/init.go
index 6a925c11291..ff706f44e00 100644
--- a/pkg/plugins/external/init.go
+++ b/pkg/plugins/external/init.go
@@ -17,10 +17,13 @@ limitations under the License.
 package external
 
 import (
+	"os"
+
+	"github.com/spf13/afero"
 	"github.com/spf13/pflag"
 
 	"sigs.k8s.io/kubebuilder/v3/pkg/config"
-	v3cfg "sigs.k8s.io/kubebuilder/v3/pkg/config/v3"
+	"sigs.k8s.io/kubebuilder/v3/pkg/config/store/yaml"
 	"sigs.k8s.io/kubebuilder/v3/pkg/machinery"
 	"sigs.k8s.io/kubebuilder/v3/pkg/plugin"
 	"sigs.k8s.io/kubebuilder/v3/pkg/plugin/external"
@@ -43,13 +46,28 @@ func (p *initSubcommand) BindFlags(fs *pflag.FlagSet) {
 }
 
 func (p *initSubcommand) Scaffold(fs machinery.Filesystem) error {
-	cfg := p.config.(*v3cfg.Cfg)
+	fileName := "PROJECT"
+
+	if _, err := os.Stat(fileName); os.IsNotExist(err) {
+		file, err := os.Create(fileName)
+		if err != nil {
+			return err
+		}
+		defer file.Close()
+	}
+
+	cfg := yaml.New(machinery.Filesystem{FS: afero.NewOsFs()})
+	// cfg.Config().SetVersion(3)
+
+	if err := cfg.Load(); err != nil {
+		return err
+	}
 
 	req := external.PluginRequest{
 		APIVersion: defaultAPIVersion,
 		Command:    "init",
 		Args:       p.Args,
-		Config:     *cfg,
+		Config:     cfg.Config(),
 	}
 
 	err := handlePluginResponse(fs, req, p.Path, p)