diff --git a/env0/resource_template.go b/env0/resource_template.go
index e249fa5d..6b21048a 100644
--- a/env0/resource_template.go
+++ b/env0/resource_template.go
@@ -175,7 +175,7 @@ func getTemplateSchema(prefix string) map[string]*schema.Schema {
 		},
 		"opentofu_version": {
 			Type:             schema.TypeString,
-			Description:      "the Opentofu version to use (example: 0.36.5)",
+			Description:      "the Opentofu version to use (example: 1.6.2). Setting to 'RESOLVE_FROM_CODE' extracts the version from the Opentofu code during runtime. Setting to `latest`, the version used will be the most recent one available for Opentofu.",
 			ValidateDiagFunc: NewOpenTofuVersionValidator(),
 			Optional:         true,
 		},
diff --git a/env0/resource_template_test.go b/env0/resource_template_test.go
index 2e51abad..57fb4d25 100644
--- a/env0/resource_template_test.go
+++ b/env0/resource_template_test.go
@@ -434,7 +434,7 @@ func TestUnitTemplateResource(t *testing.T) {
 		Description:      "new-description",
 		Repository:       "env0/repo-new",
 		Type:             "opentofu",
-		OpentofuVersion:  "1.7.0",
+		OpentofuVersion:  "RESOLVE_FROM_CODE",
 		TerraformVersion: "0.15.1",
 		Retry: client.TemplateRetry{
 			OnDeploy: &client.TemplateRetryOn{
diff --git a/env0/validators.go b/env0/validators.go
index e27ab360..35dab28b 100644
--- a/env0/validators.go
+++ b/env0/validators.go
@@ -116,7 +116,7 @@ func NewGreaterThanValidator(greaterThan int) schema.SchemaValidateDiagFunc {
 }
 
 func NewOpenTofuVersionValidator() schema.SchemaValidateDiagFunc {
-	return NewRegexValidator(`^(?:[0-9]\.[0-9]{1,2}\.[0-9]{1,2})|1\.6\.0-alpha$`)
+	return NewRegexValidator(`(?:^[0-9]\.[0-9]{1,2}\.[0-9]{1,2}(?:-.+)?$)|^RESOLVE_FROM_CODE$|^latest$`)
 }
 
 func ValidateTtl(i interface{}, path cty.Path) diag.Diagnostics {
diff --git a/tests/integration/004_template/main.tf b/tests/integration/004_template/main.tf
index 6a0fb76c..39711c86 100644
--- a/tests/integration/004_template/main.tf
+++ b/tests/integration/004_template/main.tf
@@ -64,7 +64,7 @@ resource "env0_template" "template_opentofu" {
   retries_on_deploy                       = 3
   retry_on_deploy_only_when_matches_regex = "abc"
   retries_on_destroy                      = 1
-  opentofu_version                        = "1.6.0"
+  opentofu_version                        = var.second_run ? "1.6.0" : "RESOLVE_FROM_CODE"
 }
 
 resource "env0_configuration_variable" "in_a_template" {