diff --git a/CentralisedPackageConverter.Tests/VersioningTests.cs b/CentralisedPackageConverter.Tests/VersioningTests.cs
index 19d1034..727102d 100644
--- a/CentralisedPackageConverter.Tests/VersioningTests.cs
+++ b/CentralisedPackageConverter.Tests/VersioningTests.cs
@@ -134,6 +134,21 @@ public void VersioningIgnorePrerelease(bool ignorePrerelease, string expectedVer
     }
 
 
+    [Test]
+    public void TestVariableAsVersion()
+    {
+        var initialProjectContent =
+            @"<Project>" + LineWrap +
+            @"  <ItemGroup>" + LineWrap +
+            @"    <PackageReference Include=""TestPackage"" Version=""$(VersionVariable)"" />" + LineWrap +
+            @"  </ItemGroup>" + LineWrap +
+            @"</Project>" + LineWrap;
+
+        TestResultVersion([initialProjectContent], "$(VersionVariable)");
+        CheckProjectFilesHaveVersionsRemoved();
+    }
+
+
 
     // something like this generator https://github.com/belav/csharpier/tree/master/Src/CSharpier.Tests.Generators
     // to create the tests that copying files to a temp directory out of the folder structure in here
diff --git a/CentralisedPackageConverter/PackageConverter.cs b/CentralisedPackageConverter/PackageConverter.cs
index fe1dd4f..ee35f12 100644
--- a/CentralisedPackageConverter/PackageConverter.cs
+++ b/CentralisedPackageConverter/PackageConverter.cs
@@ -8,7 +8,7 @@ namespace CentralisedPackageConverter;
 
 public class PackageConverter
 {
-    private readonly Dictionary<string, Dictionary<string, NuGetVersion>> referencesByConditionThenName = new(StringComparer.OrdinalIgnoreCase);
+    private readonly Dictionary<string, Dictionary<string, PackageVersion>> referencesByConditionThenName = new(StringComparer.OrdinalIgnoreCase);
     private const string s_DirPackageProps = "Directory.Packages.props";
 
     internal static readonly Regex FileExtensionsRegex =
@@ -168,12 +168,16 @@ private void ReadDirectoryPackagePropsFile(string packageConfigPath)
         {
             var package = GetAttributeValue(packageVersion, "Include") ??
                           throw new InvalidOperationException("PackageVersion element has no Include");
-            var version = NuGetVersion.Parse(GetAttributeValue(packageVersion, "Version"));
+            string? versionAttributeValue = GetAttributeValue(packageVersion, "Version");
+            if (versionAttributeValue == null)
+                throw new InvalidOperationException("PackageVersion element has no Version attribute");
+
+            var version = PackageVersion.Parse(versionAttributeValue);
             var condition = GetAttributeValue(packageVersion.Parent, "Condition") ?? string.Empty;
 
             if (!this.referencesByConditionThenName.TryGetValue(condition, out var packagesByName))
             {
-                packagesByName = new Dictionary<string, NuGetVersion>(StringComparer.OrdinalIgnoreCase);
+                packagesByName = new Dictionary<string, PackageVersion>(StringComparer.OrdinalIgnoreCase);
                 this.referencesByConditionThenName[condition] = packagesByName;
             }
 
@@ -319,8 +323,8 @@ private void ConvertProject(FileInfo csprojFile, bool dryRun, Encoding encoding,
                 continue;
 
             var versionString = GetAttributeValue(packageReference, "Version");
-            var version = default(NuGetVersion?);
-            if (NuGetVersion.TryParse(versionString, out var parsedVersion))
+            var version = default(PackageVersion?);
+            if (PackageVersion.TryParse(versionString, out var parsedVersion))
             {
                 version = parsedVersion;
             }
@@ -338,7 +342,7 @@ private void ConvertProject(FileInfo csprojFile, bool dryRun, Encoding encoding,
                     continue;
                 }
 
-                if (NuGetVersion.TryParse(versionElement.Value, out parsedVersion))
+                if (PackageVersion.TryParse(versionElement.Value, out parsedVersion))
                 {
                     version = parsedVersion;
                 }
@@ -369,7 +373,7 @@ private void ConvertProject(FileInfo csprojFile, bool dryRun, Encoding encoding,
 
             if (!this.referencesByConditionThenName.TryGetValue(condition, out var referencesForCondition))
             {
-                referencesForCondition = new Dictionary<string, NuGetVersion>(StringComparer.OrdinalIgnoreCase);
+                referencesForCondition = new Dictionary<string, PackageVersion>(StringComparer.OrdinalIgnoreCase);
                 this.referencesByConditionThenName[condition] = referencesForCondition;
             }
 
diff --git a/CentralisedPackageConverter/PackageVersion.cs b/CentralisedPackageConverter/PackageVersion.cs
new file mode 100644
index 0000000..40c4196
--- /dev/null
+++ b/CentralisedPackageConverter/PackageVersion.cs
@@ -0,0 +1,57 @@
+using NuGet.Versioning;
+using System;
+using System.Collections.Generic;
+using System.Linq;
+using System.Text;
+using System.Threading.Tasks;
+
+namespace CentralisedPackageConverter
+{
+    public class PackageVersion
+    {
+
+        public string? VariableName { get; private set; }
+
+        public NuGetVersion? NuGetVersion { get; private set; }
+
+
+        public static PackageVersion Parse(string value)
+        {
+            if (!TryParse(value, out var version))
+                throw new ArgumentException("Invalid package version", nameof(value));
+
+            return version!;
+        }
+        public static bool TryParse(string value, out PackageVersion? version)
+        {
+
+            if (value != null)
+            {
+                if (value.Contains("$("))
+                {
+                    version = new PackageVersion
+                    {
+                        VariableName = value
+                    };
+                    return true;
+                }
+
+                if (NuGetVersion.TryParse(value, out var nugetVersion))
+                {
+                    version = new PackageVersion
+                    {
+                        NuGetVersion = nugetVersion
+                    };
+                    return true;
+                }
+            }
+            version = null;
+            return false;
+        }
+
+        public bool IsVariable => !string.IsNullOrWhiteSpace(VariableName);
+        public string ToFullString() => NuGetVersion?.ToFullString() ?? VariableName ?? string.Empty;
+
+        public override string ToString() => NuGetVersion?.ToString() ?? VariableName ?? string.Empty;
+    }
+}
diff --git a/CentralisedPackageConverter/Versioning.cs b/CentralisedPackageConverter/Versioning.cs
index 7973518..a6da2a1 100644
--- a/CentralisedPackageConverter/Versioning.cs
+++ b/CentralisedPackageConverter/Versioning.cs
@@ -22,14 +22,14 @@ public Versioning(bool pickMinVersion, bool ignorePrerelease, VersionComparison
     /// Don't consider the version for PackageVersion setting.
     /// True if null or has parts not supported by <see cref="Comparer"/>.
     /// </summary>
-    public bool IgnorePackageVersion([NotNullWhen(false)]NuGetVersion? version)
+    public bool IgnorePackageVersion([NotNullWhen(false)]PackageVersion? version)
     {
         if (version == null)
         {
             return true;
         }
 
-        return IgnorePrerelease && version.IsPrerelease;
+        return IgnorePrerelease && version.NuGetVersion?.IsPrerelease == true;
     }
 
     /// <summary>
@@ -40,15 +40,18 @@ public bool IgnorePackageVersion([NotNullWhen(false)]NuGetVersion? version)
     /// <param name="existingVersion"></param>
     /// <param name="nextVersion"></param>
     /// <returns></returns>
-    public bool PreferExisting(NuGetVersion existingVersion, NuGetVersion? nextVersion)
+    public bool PreferExisting(PackageVersion existingVersion, PackageVersion? nextVersion)
     {
+        if (existingVersion.IsVariable) return true;
         if (nextVersion == null)
         {
             return true;
         }
 
+        if (nextVersion.IsVariable) return false;
+
         return PickMinVersion
-            ? Comparer.Compare(existingVersion, nextVersion) <= 0
-            : Comparer.Compare(existingVersion, nextVersion) >= 0;
+            ? Comparer.Compare(existingVersion.NuGetVersion, nextVersion.NuGetVersion) <= 0
+            : Comparer.Compare(existingVersion.NuGetVersion, nextVersion.NuGetVersion) >= 0;
     }
 }
\ No newline at end of file