diff --git a/.github/workflows/release.yml b/.github/workflows/release.yml
index a0c4533f5..5cfed8963 100644
--- a/.github/workflows/release.yml
+++ b/.github/workflows/release.yml
@@ -20,12 +20,13 @@ jobs:
 
       - name: install build deps
         run: |
-          python -m pip install -U pip build
+          python -m pip install -U pip
+          python -m pip install -U hatch
           python -m pip install -r proto/requirements.txt
 
       - name: build otaclient package
         run: |
-          python -m build --wheel --outdir dist/ .
+          hatch build -t wheel
 
       - name: build a proto binary
         run: |
diff --git a/docker/docker-compose_tests.yml b/docker/docker-compose_tests.yml
index 8a8a26257..ad574d851 100644
--- a/docker/docker-compose_tests.yml
+++ b/docker/docker-compose_tests.yml
@@ -8,11 +8,7 @@ services:
     container_name: ota-test
     environment:
       OUTPUT_DIR: /test_result
-      OTACLIENT_DIR: /ota-client
       CERTS_DIR: /certs
     volumes:
-      - ../pyproject.toml:/ota-client/pyproject.toml:ro
-      - ../.flake8:/ota-client/.flake8:ro
-      - ../otaclient:/ota-client/otaclient:ro
-      - ../tests:/ota-client/tests:ro
+      - ..:/otaclient_src:ro
       - ../test_result:/test_result:rw
diff --git a/docker/test_base/Dockerfile b/docker/test_base/Dockerfile
index 0a13c9915..da57daa1c 100644
--- a/docker/test_base/Dockerfile
+++ b/docker/test_base/Dockerfile
@@ -4,11 +4,9 @@ ENV DEBIAN_FRONTEND=noninteractive
 ARG KERNEL_VERSION="5.8.0-53-generic"
 ARG BASE_IMG_URL="http://cdimage.ubuntu.com/ubuntu-base/releases/20.04/release/ubuntu-base-20.04.1-base-amd64.tar.gz"
 ARG OTA_METADATA_REPO="https://github.com/tier4/ota-metadata"
-ENV OTA_CLIENT_DIR="/ota-client"
 ENV OTA_IMAGE_SERVER_ROOT="/ota-image"
 ENV OTA_IMAGE_DIR="${OTA_IMAGE_SERVER_ROOT}/data"
 ENV CERTS_DIR="/certs"
-ENV VENV="${OTA_CLIENT_DIR}/.venv"
 ENV SPECIAL_FILE="path;adf.ae?qu.er\y=str#fragファイルement"
 
 
@@ -43,17 +41,10 @@ RUN set -eu; \
 # NOTE: include special identifiers #?; into the pathname
 RUN echo -n "${SPECIAL_FILE}" > "${OTA_IMAGE_DIR}/${SPECIAL_FILE}"
 
-# install otaclient dependencies
-COPY ./otaclient/requirements.txt /tmp/requirements.txt
-COPY ./tests/requirements.txt /tmp/requirements-dev.txt
+# install hatch
 RUN set -eu; \
-    python3 -m venv ${VENV}; \
-    source ${VENV}/bin/activate; \
     python3 -m pip install --no-cache-dir -q -U pip; \
-    python3 -m pip install \
-        --no-cache-dir -q \
-        -r /tmp/requirements.txt \
-        -r /tmp/requirements-dev.txt
+    python3 -m pip install --no-cache-dir -U hatch
 
 # generate test certs and sign key
 COPY --chmod=755 ./tests/keys/gen_certs.sh /tmp/certs/
@@ -98,5 +89,4 @@ RUN set -eu; \
 COPY ./docker/test_base/entry_point.sh /entry_point.sh
 RUN chmod +x /entry_point.sh
 
-WORKDIR ${OTA_CLIENT_DIR}
 ENTRYPOINT [ "/entry_point.sh" ]
diff --git a/docker/test_base/entry_point.sh b/docker/test_base/entry_point.sh
index c29a2d4fa..014336a64 100644
--- a/docker/test_base/entry_point.sh
+++ b/docker/test_base/entry_point.sh
@@ -1,32 +1,24 @@
 #!/bin/bash
 set -eu
 
-OTA_CLIENT_DIR="${OTACLIENT_DIR:-/ota-client}"
+TEST_ROOT=/test_root
+OTACLIENT_SRC=/otaclient_src
 OUTPUT_DIR="${OUTPUT_DIR:-/test_result}"
 CERTS_DIR="${CERTS_DIR:-/certs}"
-VENV="${OTA_CLIENT_DIR}/.venv"
+
+# copy the source code as source is read-only
+cp -R "${OTACLIENT_SRC}" "${TEST_ROOT}"
 
 # copy the certs generated in the docker image to otaclient dir
 echo "setup certificates for testing..."
-cd ${OTA_CLIENT_DIR}
+cd ${TEST_ROOT}
 mkdir -p ./certs
 cp -av ${CERTS_DIR}/root.pem ./certs/1.root.pem
 cp -av ${CERTS_DIR}/interm.pem ./certs/1.interm.pem
 
-source ${VENV}/bin/activate
-
-# setup dependencies unconditionally
-# NOTE: if we only do minor modified to the requirements.txt,
-#       we don't have to rebuild the image, just call pip here
-APP_DEPENDENCIES="${OTA_CLIENT_DIR}/otaclient/requirements.txt"
-[ -f "$APP_DEPENDENCIES" ] && echo "setup app dependencies..." && \
-    python3 -m pip install --no-cache-dir -q -r $APP_DEPENDENCIES
-TESTS_DEPENDENCIES="${OTA_CLIENT_DIR}/tests/requirements.txt"
-[ -f "$TESTS_DEPENDENCIES" ] && echo "setup tests dependencies..." && \
-    python3 -m pip install --no-cache-dir -q -r $TESTS_DEPENDENCIES
-
 # exec the input params
 echo "execute test with coverage"
-cd ${OTA_CLIENT_DIR}
-coverage run -m pytest --junit-xml=${OUTPUT_DIR}/pytest.xml ${@:-}
-coverage xml -o ${OUTPUT_DIR}/coverage.xml
+cd ${TEST_ROOT}
+hatch env create dev
+hatch run dev:coverage run -m pytest --junit-xml=${OUTPUT_DIR}/pytest.xml ${@:-}
+hatch run dev:coverage xml -o ${OUTPUT_DIR}/coverage.xml
diff --git a/pyproject.toml b/pyproject.toml
index 3569e108d..41e11a020 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,8 +1,8 @@
 [build-system]
-build-backend = "setuptools.build_meta"
+build-backend = "hatchling.build"
 requires = [
-  "setuptools>=61",
-  "setuptools_scm[toml]>=6.4",
+  "hatch-vcs",
+  "hatchling>=1.20",
 ]
 
 [project]
@@ -21,27 +21,54 @@ classifiers = [
   "Programming Language :: Python :: 3.12",
 ]
 dynamic = [
-  "dependencies",
-  "optional-dependencies",
   "version",
 ]
+dependencies = [
+  "aiofiles==22.1",
+  "aiohttp<3.10.0,>=3.9.5",
+  "cryptography<43.0.0,>=42.0.4",
+  "grpcio<1.54.0,>=1.53.2",
+  "protobuf<4.22.0,>=4.21.12",
+  "pydantic==2.7",
+  "pydantic-settings==2.2.1",
+  "pyOpenSSL==24.1",
+  "PyYAML>=3.12",
+  "requests<2.32.0,>=2.31",
+  'typing_extensions>=4.6.3; python_version < "3.11"',
+  "urllib3<2.0.0,>=1.26.8",
+  "uvicorn[standard]==0.20",
+  "zstandard==0.18",
+]
+[project.optional-dependencies]
+dev = [
+  "black",
+  "coverage",
+  "flake8",
+  "isort",
+  "pytest==7.1.2",
+  "pytest-asyncio==0.21",
+  "pytest-mock==3.8.2",
+  "requests-mock",
+]
 [project.urls]
 Source = "https://github.com/tier4/ota-client"
 
-[tool.setuptools.dynamic]
-dependencies = { file = ["otaclient/requirements.txt"] }
+[tool.hatch.version]
+source = "vcs"
+
+[tool.hatch.build.hooks.vcs]
+version-file = "src/_otaclient_version.py"
 
-[tool.setuptools.dynamic.optional-dependencies]
-test = { file = ["tests/requirements.txt"] }
+[tool.hatch.build.targets.sdist]
+exclude = ["/tools"]
 
-[tool.setuptools.packages.find]
-include = ["otaclient*"]
-namespaces = false
+[tool.hatch.build.targets.wheel]
+only-include = ["src"]
+sources = ["src"]
 
-[tool.setuptools_scm]
-write_to = "otaclient/_version.py"
-version_scheme = "post-release"
-local_scheme = "no-local-version"
+[tool.hatch.envs.dev]
+type = "virtual"
+features = ["dev"]
 
 [tool.black]
 line-length = 88
diff --git a/src/.gitignore b/src/.gitignore
new file mode 100644
index 000000000..4fc778335
--- /dev/null
+++ b/src/.gitignore
@@ -0,0 +1,2 @@
+# generated version file by build
+_otaclient_version.py
diff --git a/src/otaclient/__init__.py b/src/otaclient/__init__.py
index aa32a12b6..c335daf64 100644
--- a/src/otaclient/__init__.py
+++ b/src/otaclient/__init__.py
@@ -13,7 +13,7 @@
 # limitations under the License.
 
 try:
-    from otaclient._version import __version__, version
+    from _otaclient_version import __version__, version
 except ImportError:
     # unknown version
     version = __version__ = "0.0.0"
diff --git a/src/otaclient/_utils/typing.py b/src/otaclient/_utils/typing.py
index 451ce4f19..941935f93 100644
--- a/src/otaclient/_utils/typing.py
+++ b/src/otaclient/_utils/typing.py
@@ -15,6 +15,7 @@
 
 from __future__ import annotations
 
+from enum import Enum
 from pathlib import Path
 from typing import Any, Callable, TypeVar, Union
 
@@ -22,7 +23,7 @@
 from typing_extensions import Annotated, ParamSpec
 
 P = ParamSpec("P")
-T = TypeVar("T")
+T = TypeVar("T", bound=Enum)
 RT = TypeVar("RT")
 
 StrOrPath = Union[str, Path]
diff --git a/src/otaclient/app/downloader.py b/src/otaclient/app/downloader.py
index 34ef9190e..173d9b1a3 100644
--- a/src/otaclient/app/downloader.py
+++ b/src/otaclient/app/downloader.py
@@ -48,8 +48,8 @@
 from urllib3.response import HTTPResponse
 from urllib3.util.retry import Retry
 
+from ota_proxy import OTAFileCacheControl
 from otaclient._utils import copy_callable_typehint
-from otaclient.ota_proxy import OTAFileCacheControl
 
 from .common import wait_with_backoff
 from .configs import config as cfg
diff --git a/src/otaclient/app/log_setting.py b/src/otaclient/app/log_setting.py
index a60629685..44948b623 100644
--- a/src/otaclient/app/log_setting.py
+++ b/src/otaclient/app/log_setting.py
@@ -100,5 +100,5 @@ def configure_logging():
         # NOTE: "otaclient" logger will be the root logger for all loggers name
         #       starts with "otaclient.", and the settings will affect its child loggers.
         #       For example, settings for "otaclient" logger will also be effective to
-        #       "otaclient.app.*" logger and "otaclient.ota_proxy.*" logger.
+        #       "otaclient.app.*" logger and "ota_proxy.*" logger.
         _otaclient_logger.addHandler(ch)
diff --git a/src/otaclient/app/ota_client_stub.py b/src/otaclient/app/ota_client_stub.py
index ff932c0cd..e2cf6c3ef 100644
--- a/src/otaclient/app/ota_client_stub.py
+++ b/src/otaclient/app/ota_client_stub.py
@@ -28,10 +28,10 @@
 
 from typing_extensions import Self
 
+from ota_proxy import OTAProxyContextProto
+from ota_proxy import config as local_otaproxy_cfg
+from ota_proxy import subprocess_otaproxy_launcher
 from otaclient.configs.ecu_info import ECUContact
-from otaclient.ota_proxy import OTAProxyContextProto
-from otaclient.ota_proxy import config as local_otaproxy_cfg
-from otaclient.ota_proxy import subprocess_otaproxy_launcher
 
 from . import log_setting
 from .boot_control._common import CMDHelperFuncs
@@ -65,7 +65,7 @@ def __init__(
         self._external_cache_dev_mp = external_cache_dev_mp
         self._external_cache_data_dir = external_cache_path
 
-        self.logger = logging.getLogger("otaclient.ota_proxy")
+        self.logger = logging.getLogger("ota_proxy")
 
     @property
     def extra_kwargs(self) -> Dict[str, Any]:
@@ -85,9 +85,9 @@ def _subprocess_init(self):
         # configure logging for otaproxy subprocess
         # NOTE: on otaproxy subprocess, we first set log level of the root logger
         #       to CRITICAL to filter out third_party libs' logging(requests, urllib3, etc.),
-        #       and then set the otaclient.ota_proxy logger to DEFAULT_LOG_LEVEL
+        #       and then set the ota_proxy logger to DEFAULT_LOG_LEVEL
         log_setting.configure_logging()
-        otaproxy_logger = logging.getLogger("otaclient.ota_proxy")
+        otaproxy_logger = logging.getLogger("ota_proxy")
         otaproxy_logger.setLevel(cfg.DEFAULT_LOG_LEVEL)
         self.logger = otaproxy_logger
 
diff --git a/src/otaclient/app/ota_metadata.py b/src/otaclient/app/ota_metadata.py
index d0c2651cc..b69a99241 100644
--- a/src/otaclient/app/ota_metadata.py
+++ b/src/otaclient/app/ota_metadata.py
@@ -71,7 +71,7 @@
 from OpenSSL import crypto
 from typing_extensions import Self
 
-from otaclient.ota_proxy import OTAFileCacheControl
+from ota_proxy import OTAFileCacheControl
 
 from .common import RetryTaskMap, get_backoff, urljoin_ensure_base
 from .configs import config as cfg
diff --git a/src/otaclient/requirements.txt b/src/otaclient/requirements.txt
deleted file mode 100644
index a8f593b6c..000000000
--- a/src/otaclient/requirements.txt
+++ /dev/null
@@ -1,14 +0,0 @@
-pyOpenSSL==24.1.0
-cryptography>=42.0.4, <43.0.0
-grpcio>=1.53.2, <1.54.0
-protobuf==4.21.12
-PyYAML>=3.12
-requests==2.31.0
-urllib3>=1.26.8, <2.0.0
-uvicorn[standard]==0.20.0
-aiohttp>=3.9.5, <3.10.0
-aiofiles==22.1.0
-zstandard==0.18.0
-typing_extensions==4.6.3
-pydantic==2.7.0
-pydantic-settings==2.2.1
diff --git a/tests/conftest.py b/tests/conftest.py
index b856edd93..c923caf1a 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -42,7 +42,7 @@ class TestConfiguration:
     OTACLIENT_STUB_MODULE_PATH = "otaclient.app.ota_client_stub"
     OTACLIENT_SERVICE_MODULE_PATH = "otaclient.app.ota_client_service"
     OTAMETA_MODULE_PATH = "otaclient.app.ota_metadata"
-    OTAPROXY_MODULE_PATH = "otaclient.ota_proxy"
+    OTAPROXY_MODULE_PATH = "ota_proxy"
     CREATE_STANDBY_MODULE_PATH = "otaclient.app.create_standby"
     MAIN_MODULE_PATH = "otaclient.app.main"
 
diff --git a/tests/requirements.txt b/tests/requirements.txt
deleted file mode 100644
index ab1a57093..000000000
--- a/tests/requirements.txt
+++ /dev/null
@@ -1,7 +0,0 @@
-pytest==7.1.2
-pytest-asyncio==0.21.0
-pytest-mock==3.8.2
-pytest-cov==3.0.0
-black==22.3.0
-flake8==4.0.1
-requests-mock==1.10.0
diff --git a/tests/test_ota_client_stub.py b/tests/test_ota_client_stub.py
index e16293d1a..77734df46 100644
--- a/tests/test_ota_client_stub.py
+++ b/tests/test_ota_client_stub.py
@@ -24,6 +24,8 @@
 import pytest
 from pytest_mock import MockerFixture
 
+from ota_proxy import OTAProxyContextProto
+from ota_proxy.config import Config as otaproxyConfig
 from otaclient.app.ota_client import OTAServicer
 from otaclient.app.ota_client_call import OtaClientCall
 from otaclient.app.ota_client_stub import (
@@ -34,8 +36,6 @@
 from otaclient.app.proto import wrapper
 from otaclient.configs.ecu_info import ECUInfo, parse_ecu_info
 from otaclient.configs.proxy_info import ProxyInfo, parse_proxy_info
-from otaclient.ota_proxy import OTAProxyContextProto
-from otaclient.ota_proxy.config import Config as otaproxyConfig
 from tests.conftest import cfg
 from tests.utils import compare_message
 
diff --git a/tests/test_ota_proxy/test_cache_control_header.py b/tests/test_ota_proxy/test_cache_control_header.py
index 85242d162..30adbd990 100644
--- a/tests/test_ota_proxy/test_cache_control_header.py
+++ b/tests/test_ota_proxy/test_cache_control_header.py
@@ -17,7 +17,7 @@
 
 import pytest
 
-from otaclient.ota_proxy import OTAFileCacheControl
+from ota_proxy import OTAFileCacheControl
 
 
 @pytest.mark.parametrize(
diff --git a/tests/test_ota_proxy/test_cachedb.py b/tests/test_ota_proxy/test_cachedb.py
index 7c3d3c3fd..4f5992ee4 100644
--- a/tests/test_ota_proxy/test_cachedb.py
+++ b/tests/test_ota_proxy/test_cachedb.py
@@ -22,10 +22,10 @@
 
 import pytest
 
-from otaclient.ota_proxy import config as cfg
-from otaclient.ota_proxy.orm import NULL_TYPE
-from otaclient.ota_proxy.ota_cache import CacheMeta, OTACacheDB
-from otaclient.ota_proxy.utils import url_based_hash
+from ota_proxy import config as cfg
+from ota_proxy.orm import NULL_TYPE
+from ota_proxy.ota_cache import CacheMeta, OTACacheDB
+from ota_proxy.utils import url_based_hash
 
 logger = logging.getLogger(__name__)
 
@@ -33,7 +33,7 @@
 class TestORM:
     @pytest.fixture(autouse=True)
     def create_table_defs(self):
-        from otaclient.ota_proxy.orm import NULL_TYPE, ColumnDescriptor, ORMBase
+        from ota_proxy.orm import NULL_TYPE, ColumnDescriptor, ORMBase
 
         @dataclass
         class TableCls(ORMBase):
diff --git a/tests/test_ota_proxy/test_ota_cache.py b/tests/test_ota_proxy/test_ota_cache.py
index 783826bae..26dec048c 100644
--- a/tests/test_ota_proxy/test_ota_cache.py
+++ b/tests/test_ota_proxy/test_ota_cache.py
@@ -21,10 +21,10 @@
 
 import pytest
 
-from otaclient.ota_proxy import config as cfg
-from otaclient.ota_proxy.db import CacheMeta, OTACacheDB
-from otaclient.ota_proxy.ota_cache import CachingRegister, LRUCacheHelper
-from otaclient.ota_proxy.utils import url_based_hash
+from ota_proxy import config as cfg
+from ota_proxy.db import CacheMeta, OTACacheDB
+from ota_proxy.ota_cache import CachingRegister, LRUCacheHelper
+from ota_proxy.utils import url_based_hash
 
 logger = logging.getLogger(__name__)
 
diff --git a/tests/test_ota_proxy/test_ota_proxy_server.py b/tests/test_ota_proxy/test_ota_proxy_server.py
index 7aa07eb8c..c38015cda 100644
--- a/tests/test_ota_proxy/test_ota_proxy_server.py
+++ b/tests/test_ota_proxy/test_ota_proxy_server.py
@@ -27,9 +27,9 @@
 import pytest
 import uvicorn
 
+from ota_proxy.utils import url_based_hash
 from otaclient.app.ota_metadata import parse_regulars_from_txt
 from otaclient.app.proto.wrapper import RegularInf
-from otaclient.ota_proxy.utils import url_based_hash
 from tests.conftest import ThreadpoolExecutorFixtureMixin, cfg
 
 logger = logging.getLogger(__name__)
@@ -71,7 +71,7 @@ class TestOTAProxyServer(ThreadpoolExecutorFixtureMixin):
     async def setup_ota_proxy_server(self, tmp_path: Path, request):
         import uvicorn
 
-        from otaclient.ota_proxy import App, OTACache
+        from ota_proxy import App, OTACache
 
         ota_cache_dir = tmp_path / "ota-cache"
         ota_cache_dir.mkdir(parents=True, exist_ok=True)
@@ -173,7 +173,7 @@ async def test_download_file_with_special_fname(self):
         """
         import sqlite3
 
-        from otaclient.ota_proxy import config as cfg
+        from ota_proxy import config as cfg
 
         # ------ get the special file via otaproxy from the ota image server ------ #
         # --- execution --- #
@@ -295,7 +295,7 @@ class TestOTAProxyServerWithoutCache(ThreadpoolExecutorFixtureMixin):
     async def setup_ota_proxy_server(self, tmp_path: Path):
         import uvicorn
 
-        from otaclient.ota_proxy import App, OTACache
+        from ota_proxy import App, OTACache
 
         ota_cache_dir = tmp_path / "ota-cache"
         ota_cache_dir.mkdir(parents=True, exist_ok=True)
diff --git a/tests/test_ota_proxy/test_subprocess_launch_otaproxy.py b/tests/test_ota_proxy/test_subprocess_launch_otaproxy.py
index 512a2bed3..552f2ad44 100644
--- a/tests/test_ota_proxy/test_subprocess_launch_otaproxy.py
+++ b/tests/test_ota_proxy/test_subprocess_launch_otaproxy.py
@@ -14,11 +14,10 @@
 
 
 import time
-from functools import partial
 from pathlib import Path
 from typing import Any, Dict
 
-from otaclient.ota_proxy import OTAProxyContextProto, subprocess_otaproxy_launcher
+from ota_proxy import OTAProxyContextProto, subprocess_otaproxy_launcher
 
 
 class _DummyOTAProxyContext(OTAProxyContextProto):