diff --git a/dask_cuda/cli.py b/dask_cuda/cli.py
index d454129a..ea90b96e 100644
--- a/dask_cuda/cli.py
+++ b/dask_cuda/cli.py
@@ -13,7 +13,7 @@
 from distributed.utils import import_term
 
 from .cuda_worker import CUDAWorker
-from .utils import print_cluster_config
+from .utils import CommaSeparatedChoice, print_cluster_config
 
 logger = logging.getLogger(__name__)
 
@@ -167,6 +167,7 @@ def cuda():
 @click.option(
     "--set-rmm-allocator-for-libs",
     "rmm_allocator_external_lib_list",
+    type=CommaSeparatedChoice(["cupy", "torch"]),
     default=None,
     show_default=True,
     help="""
diff --git a/dask_cuda/cuda_worker.py b/dask_cuda/cuda_worker.py
index 91128eb1..30c14450 100644
--- a/dask_cuda/cuda_worker.py
+++ b/dask_cuda/cuda_worker.py
@@ -203,9 +203,6 @@ def del_pid_file():
                 "processes set `CUDF_SPILL=on` as well. To disable this warning "
                 "set `DASK_CUDF_SPILL_WARNING=False`."
             )
-        
-        if rmm_allocator_external_lib_list is not None:
-            rmm_allocator_external_lib_list = [s.strip() for s in rmm_allocator_external_lib_list.split(',')]
 
         self.nannies = [
             Nanny(
diff --git a/dask_cuda/local_cuda_cluster.py b/dask_cuda/local_cuda_cluster.py
index bce6ed64..9d19c798 100644
--- a/dask_cuda/local_cuda_cluster.py
+++ b/dask_cuda/local_cuda_cluster.py
@@ -143,10 +143,10 @@ class LocalCUDACluster(LocalCluster):
             The asynchronous allocator requires CUDA Toolkit 11.2 or newer. It is also
             incompatible with RMM pools and managed memory. Trying to enable both will
             result in an exception.
-    rmm_allocator_external_lib_list: str or list or None, default None
-        Set RMM as the allocator for external libraries. Can be a comma-separated
-        string (like "torch,cupy").
-
+    rmm_allocator_external_lib_list: list or None, default None
+        List of external libraries for which to set RMM as the allocator.
+        Supported options are: ``["torch", "cupy"]``. If None, no external
+        libraries will use RMM as their allocator.
     rmm_release_threshold: int, str or None, default None
         When ``rmm.async is True`` and the pool size grows beyond this value, unused
         memory held by the pool will be released at the next synchronization point.
@@ -289,12 +289,6 @@ def __init__(
         self.rmm_managed_memory = rmm_managed_memory
         self.rmm_async = rmm_async
         self.rmm_release_threshold = rmm_release_threshold
-        if rmm_allocator_external_lib_list is not None and isinstance(
-            rmm_allocator_external_lib_list, str
-        ):
-            rmm_allocator_external_lib_list = [
-                s.strip() for s in rmm_allocator_external_lib_list.split(",")
-            ]
         self.rmm_allocator_external_lib_list = rmm_allocator_external_lib_list
 
         if rmm_pool_size is not None or rmm_managed_memory or rmm_async:
diff --git a/dask_cuda/utils.py b/dask_cuda/utils.py
index 2f92d94b..e7d7cdbb 100644
--- a/dask_cuda/utils.py
+++ b/dask_cuda/utils.py
@@ -7,8 +7,9 @@
 from contextlib import suppress
 from functools import singledispatch
 from multiprocessing import cpu_count
-from typing import Optional, Callable, Dict
+from typing import Callable, Dict, Optional
 
+import click
 import numpy as np
 import pynvml
 import toolz
@@ -771,7 +772,7 @@ def enable_rmm_memory_for_library(lib_name: str) -> None:
     Enable RMM memory pool support for a specified third-party library.
 
     This function allows the given library to utilize RMM's memory pool if it supports
-    integration with RMM. The library name is passed as a string argument, and if the 
+    integration with RMM. The library name is passed as a string argument, and if the
     library is compatible, its memory allocator will be configured to use RMM.
 
     Parameters
@@ -794,7 +795,7 @@ def enable_rmm_memory_for_library(lib_name: str) -> None:
     }
 
     if lib_name not in setup_functions:
-        supported_libs = ', '.join(setup_functions.keys())
+        supported_libs = ", ".join(setup_functions.keys())
         raise ValueError(
             f"The library '{lib_name}' is not supported for RMM integration. "
             f"Supported libraries are: {supported_libs}."
@@ -803,6 +804,7 @@ def enable_rmm_memory_for_library(lib_name: str) -> None:
     # Call the setup function for the specified library
     setup_functions[lib_name]()
 
+
 def _setup_rmm_for_torch() -> None:
     try:
         import torch
@@ -813,6 +815,7 @@ def _setup_rmm_for_torch() -> None:
 
     torch.cuda.memory.change_current_allocator(rmm_torch_allocator)
 
+
 def _setup_rmm_for_cupy() -> None:
     try:
         import cupy
@@ -820,4 +823,15 @@ def _setup_rmm_for_cupy() -> None:
         raise ImportError("CuPy is not installed.") from e
 
     from rmm.allocators.cupy import rmm_cupy_allocator
+
     cupy.cuda.set_allocator(rmm_cupy_allocator)
+
+
+class CommaSeparatedChoice(click.Choice):
+    def convert(self, value, param, ctx):
+        values = [v.strip() for v in value.split(",")]
+        for v in values:
+            if v not in self.choices:
+                choices_str = ", ".join(f"'{c}'" for c in self.choices)
+                self.fail(f"invalid choice(s): {v}. (choices are: {choices_str})")
+        return values