diff --git a/.gitignore b/.gitignore
index a9dd995534..dd9813849d 100644
--- a/.gitignore
+++ b/.gitignore
@@ -20,7 +20,7 @@ Profile.prof
 .eggs/*
 parcels.egg-info/*
 dist/parcels*.egg
-parcels/_version_setup.py
+src/parcels/_version_setup.py
 .pytest_cache
 .hypothesis
 .coverage
diff --git a/pixi.toml b/pixi.toml
index 7d17cd82a6..a483fb8c03 100644
--- a/pixi.toml
+++ b/pixi.toml
@@ -93,4 +93,4 @@ lxml = "*" # in CI
 types-tqdm = "*"
 
 [feature.typing.tasks]
-typing = "mypy parcels --install-types"
+typing = "mypy src/parcels --install-types"
diff --git a/pyproject.toml b/pyproject.toml
index 5dc6626461..55eaacd7ad 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -42,10 +42,11 @@ Tracker = "https://github.com/OceanParcels/parcels/issues"
 
 
 [tool.setuptools]
+package-dir = { "" = "src" }
 packages = ["parcels"]
 
 [tool.setuptools_scm]
-write_to = "parcels/_version_setup.py"
+write_to = "src/parcels/_version_setup.py"
 local_scheme = "no-local-version"
 
 [tool.pytest.ini_options]
diff --git a/parcels/__init__.py b/src/parcels/__init__.py
similarity index 100%
rename from parcels/__init__.py
rename to src/parcels/__init__.py
diff --git a/parcels/_compat.py b/src/parcels/_compat.py
similarity index 100%
rename from parcels/_compat.py
rename to src/parcels/_compat.py
diff --git a/parcels/_core/basegrid.py b/src/parcels/_core/basegrid.py
similarity index 100%
rename from parcels/_core/basegrid.py
rename to src/parcels/_core/basegrid.py
diff --git a/parcels/_core/constants.py b/src/parcels/_core/constants.py
similarity index 100%
rename from parcels/_core/constants.py
rename to src/parcels/_core/constants.py
diff --git a/parcels/_core/converters.py b/src/parcels/_core/converters.py
similarity index 100%
rename from parcels/_core/converters.py
rename to src/parcels/_core/converters.py
diff --git a/parcels/_core/field.py b/src/parcels/_core/field.py
similarity index 100%
rename from parcels/_core/field.py
rename to src/parcels/_core/field.py
diff --git a/parcels/_core/fieldset.py b/src/parcels/_core/fieldset.py
similarity index 100%
rename from parcels/_core/fieldset.py
rename to src/parcels/_core/fieldset.py
diff --git a/parcels/_core/index_search.py b/src/parcels/_core/index_search.py
similarity index 100%
rename from parcels/_core/index_search.py
rename to src/parcels/_core/index_search.py
diff --git a/parcels/_core/kernel.py b/src/parcels/_core/kernel.py
similarity index 100%
rename from parcels/_core/kernel.py
rename to src/parcels/_core/kernel.py
diff --git a/parcels/_core/particle.py b/src/parcels/_core/particle.py
similarity index 100%
rename from parcels/_core/particle.py
rename to src/parcels/_core/particle.py
diff --git a/parcels/_core/particlefile.py b/src/parcels/_core/particlefile.py
similarity index 100%
rename from parcels/_core/particlefile.py
rename to src/parcels/_core/particlefile.py
diff --git a/parcels/_core/particleset.py b/src/parcels/_core/particleset.py
similarity index 100%
rename from parcels/_core/particleset.py
rename to src/parcels/_core/particleset.py
diff --git a/parcels/_core/spatialhash.py b/src/parcels/_core/spatialhash.py
similarity index 100%
rename from parcels/_core/spatialhash.py
rename to src/parcels/_core/spatialhash.py
diff --git a/parcels/_core/statuscodes.py b/src/parcels/_core/statuscodes.py
similarity index 100%
rename from parcels/_core/statuscodes.py
rename to src/parcels/_core/statuscodes.py
diff --git a/parcels/_core/utils/__init__.py b/src/parcels/_core/utils/__init__.py
similarity index 100%
rename from parcels/_core/utils/__init__.py
rename to src/parcels/_core/utils/__init__.py
diff --git a/parcels/_core/utils/time.py b/src/parcels/_core/utils/time.py
similarity index 100%
rename from parcels/_core/utils/time.py
rename to src/parcels/_core/utils/time.py
diff --git a/parcels/_core/utils/unstructured.py b/src/parcels/_core/utils/unstructured.py
similarity index 100%
rename from parcels/_core/utils/unstructured.py
rename to src/parcels/_core/utils/unstructured.py
diff --git a/parcels/_core/uxgrid.py b/src/parcels/_core/uxgrid.py
similarity index 100%
rename from parcels/_core/uxgrid.py
rename to src/parcels/_core/uxgrid.py
diff --git a/parcels/_core/warnings.py b/src/parcels/_core/warnings.py
similarity index 100%
rename from parcels/_core/warnings.py
rename to src/parcels/_core/warnings.py
diff --git a/parcels/_core/xgrid.py b/src/parcels/_core/xgrid.py
similarity index 100%
rename from parcels/_core/xgrid.py
rename to src/parcels/_core/xgrid.py
diff --git a/parcels/_datasets/__init__.py b/src/parcels/_datasets/__init__.py
similarity index 100%
rename from parcels/_datasets/__init__.py
rename to src/parcels/_datasets/__init__.py
diff --git a/parcels/_datasets/structured/__init__.py b/src/parcels/_datasets/structured/__init__.py
similarity index 100%
rename from parcels/_datasets/structured/__init__.py
rename to src/parcels/_datasets/structured/__init__.py
diff --git a/parcels/_datasets/structured/circulation_models.py b/src/parcels/_datasets/structured/circulation_models.py
similarity index 100%
rename from parcels/_datasets/structured/circulation_models.py
rename to src/parcels/_datasets/structured/circulation_models.py
diff --git a/parcels/_datasets/structured/generated.py b/src/parcels/_datasets/structured/generated.py
similarity index 100%
rename from parcels/_datasets/structured/generated.py
rename to src/parcels/_datasets/structured/generated.py
diff --git a/parcels/_datasets/structured/generic.py b/src/parcels/_datasets/structured/generic.py
similarity index 100%
rename from parcels/_datasets/structured/generic.py
rename to src/parcels/_datasets/structured/generic.py
diff --git a/parcels/_datasets/unstructured/__init__.py b/src/parcels/_datasets/unstructured/__init__.py
similarity index 100%
rename from parcels/_datasets/unstructured/__init__.py
rename to src/parcels/_datasets/unstructured/__init__.py
diff --git a/parcels/_datasets/unstructured/generic.py b/src/parcels/_datasets/unstructured/generic.py
similarity index 100%
rename from parcels/_datasets/unstructured/generic.py
rename to src/parcels/_datasets/unstructured/generic.py
diff --git a/parcels/_datasets/utils.py b/src/parcels/_datasets/utils.py
similarity index 100%
rename from parcels/_datasets/utils.py
rename to src/parcels/_datasets/utils.py
diff --git a/parcels/_decorators.py b/src/parcels/_decorators.py
similarity index 100%
rename from parcels/_decorators.py
rename to src/parcels/_decorators.py
diff --git a/parcels/_interpolation.py b/src/parcels/_interpolation.py
similarity index 100%
rename from parcels/_interpolation.py
rename to src/parcels/_interpolation.py
diff --git a/parcels/_logger.py b/src/parcels/_logger.py
similarity index 100%
rename from parcels/_logger.py
rename to src/parcels/_logger.py
diff --git a/parcels/_python.py b/src/parcels/_python.py
similarity index 100%
rename from parcels/_python.py
rename to src/parcels/_python.py
diff --git a/parcels/_reprs.py b/src/parcels/_reprs.py
similarity index 100%
rename from parcels/_reprs.py
rename to src/parcels/_reprs.py
diff --git a/parcels/_tutorial.py b/src/parcels/_tutorial.py
similarity index 100%
rename from parcels/_tutorial.py
rename to src/parcels/_tutorial.py
diff --git a/parcels/_typing.py b/src/parcels/_typing.py
similarity index 100%
rename from parcels/_typing.py
rename to src/parcels/_typing.py
diff --git a/parcels/_v3to4.py b/src/parcels/_v3to4.py
similarity index 100%
rename from parcels/_v3to4.py
rename to src/parcels/_v3to4.py
diff --git a/parcels/_version.py b/src/parcels/_version.py
similarity index 100%
rename from parcels/_version.py
rename to src/parcels/_version.py
diff --git a/parcels/interaction/__init__.py b/src/parcels/interaction/__init__.py
similarity index 100%
rename from parcels/interaction/__init__.py
rename to src/parcels/interaction/__init__.py
diff --git a/parcels/interaction/interactionkernel.py b/src/parcels/interaction/interactionkernel.py
similarity index 100%
rename from parcels/interaction/interactionkernel.py
rename to src/parcels/interaction/interactionkernel.py
diff --git a/parcels/interaction/neighborsearch/__init__.py b/src/parcels/interaction/neighborsearch/__init__.py
similarity index 100%
rename from parcels/interaction/neighborsearch/__init__.py
rename to src/parcels/interaction/neighborsearch/__init__.py
diff --git a/parcels/interaction/neighborsearch/base.py b/src/parcels/interaction/neighborsearch/base.py
similarity index 100%
rename from parcels/interaction/neighborsearch/base.py
rename to src/parcels/interaction/neighborsearch/base.py
diff --git a/parcels/interaction/neighborsearch/basehash.py b/src/parcels/interaction/neighborsearch/basehash.py
similarity index 100%
rename from parcels/interaction/neighborsearch/basehash.py
rename to src/parcels/interaction/neighborsearch/basehash.py
diff --git a/parcels/interaction/neighborsearch/bruteforce.py b/src/parcels/interaction/neighborsearch/bruteforce.py
similarity index 100%
rename from parcels/interaction/neighborsearch/bruteforce.py
rename to src/parcels/interaction/neighborsearch/bruteforce.py
diff --git a/parcels/interaction/neighborsearch/distanceutils.py b/src/parcels/interaction/neighborsearch/distanceutils.py
similarity index 100%
rename from parcels/interaction/neighborsearch/distanceutils.py
rename to src/parcels/interaction/neighborsearch/distanceutils.py
diff --git a/parcels/interaction/neighborsearch/hashflat.py b/src/parcels/interaction/neighborsearch/hashflat.py
similarity index 100%
rename from parcels/interaction/neighborsearch/hashflat.py
rename to src/parcels/interaction/neighborsearch/hashflat.py
diff --git a/parcels/interaction/neighborsearch/hashspherical.py b/src/parcels/interaction/neighborsearch/hashspherical.py
similarity index 100%
rename from parcels/interaction/neighborsearch/hashspherical.py
rename to src/parcels/interaction/neighborsearch/hashspherical.py
diff --git a/parcels/interaction/neighborsearch/kdtreeflat.py b/src/parcels/interaction/neighborsearch/kdtreeflat.py
similarity index 100%
rename from parcels/interaction/neighborsearch/kdtreeflat.py
rename to src/parcels/interaction/neighborsearch/kdtreeflat.py
diff --git a/parcels/interpolators.py b/src/parcels/interpolators.py
similarity index 100%
rename from parcels/interpolators.py
rename to src/parcels/interpolators.py
diff --git a/parcels/kernels/EOSseawaterproperties.py b/src/parcels/kernels/EOSseawaterproperties.py
similarity index 100%
rename from parcels/kernels/EOSseawaterproperties.py
rename to src/parcels/kernels/EOSseawaterproperties.py
diff --git a/parcels/kernels/TEOSseawaterdensity.py b/src/parcels/kernels/TEOSseawaterdensity.py
similarity index 100%
rename from parcels/kernels/TEOSseawaterdensity.py
rename to src/parcels/kernels/TEOSseawaterdensity.py
diff --git a/parcels/kernels/__init__.py b/src/parcels/kernels/__init__.py
similarity index 100%
rename from parcels/kernels/__init__.py
rename to src/parcels/kernels/__init__.py
diff --git a/parcels/kernels/advection.py b/src/parcels/kernels/advection.py
similarity index 100%
rename from parcels/kernels/advection.py
rename to src/parcels/kernels/advection.py
diff --git a/parcels/kernels/advectiondiffusion.py b/src/parcels/kernels/advectiondiffusion.py
similarity index 100%
rename from parcels/kernels/advectiondiffusion.py
rename to src/parcels/kernels/advectiondiffusion.py
diff --git a/parcels/kernels/interaction.py b/src/parcels/kernels/interaction.py
similarity index 100%
rename from parcels/kernels/interaction.py
rename to src/parcels/kernels/interaction.py
diff --git a/parcels/utils/__init__.py b/src/parcels/utils/__init__.py
similarity index 100%
rename from parcels/utils/__init__.py
rename to src/parcels/utils/__init__.py
diff --git a/parcels/utils/_helpers.py b/src/parcels/utils/_helpers.py
similarity index 100%
rename from parcels/utils/_helpers.py
rename to src/parcels/utils/_helpers.py
diff --git a/parcels/utils/interpolation_utils.py b/src/parcels/utils/interpolation_utils.py
similarity index 100%
rename from parcels/utils/interpolation_utils.py
rename to src/parcels/utils/interpolation_utils.py
diff --git a/parcels/utils/timer.py b/src/parcels/utils/timer.py
similarity index 100%
rename from parcels/utils/timer.py
rename to src/parcels/utils/timer.py