diff --git a/packages/schematics/angular/migrations/migration-collection.json b/packages/schematics/angular/migrations/migration-collection.json
index 4afb4facc7a3..a70c930290dd 100644
--- a/packages/schematics/angular/migrations/migration-collection.json
+++ b/packages/schematics/angular/migrations/migration-collection.json
@@ -10,6 +10,11 @@
       "factory": "./replace-provide-server-routing/migration",
       "description": "Migrate 'provideServerRendering' to use 'withRoutes' and remove 'provideServerRouting' from '@angular/ssr'."
     },
+    "update-module-resolution": {
+      "version": "20.0.0",
+      "factory": "./update-module-resolution/migration",
+      "description": "Update 'moduleResolution' to 'bundler' in TypeScript configurations. You can read more about this, here: https://www.typescriptlang.org/tsconfig/#moduleResolution"
+    },
     "use-application-builder": {
       "version": "20.0.0",
       "factory": "./use-application-builder/migration",
diff --git a/packages/schematics/angular/migrations/update-module-resolution/migration.ts b/packages/schematics/angular/migrations/update-module-resolution/migration.ts
new file mode 100644
index 000000000000..ca0419a4eeab
--- /dev/null
+++ b/packages/schematics/angular/migrations/update-module-resolution/migration.ts
@@ -0,0 +1,60 @@
+/**
+ * @license
+ * Copyright Google LLC All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.dev/license
+ */
+
+import { JsonObject } from '@angular-devkit/core';
+import { Rule, Tree } from '@angular-devkit/schematics';
+import { JSONFile } from '../../utility/json-file';
+import { allTargetOptions, allWorkspaceTargets, getWorkspace } from '../../utility/workspace';
+
+export default function (): Rule {
+  return async (host) => {
+    const uniqueTsConfigs = new Set<string>();
+
+    if (host.exists('tsconfig.json')) {
+      // Workspace level tsconfig
+      uniqueTsConfigs.add('tsconfig.json');
+    }
+
+    const workspace = await getWorkspace(host);
+    for (const [, target] of allWorkspaceTargets(workspace)) {
+      for (const [, opt] of allTargetOptions(target)) {
+        if (typeof opt?.tsConfig === 'string') {
+          uniqueTsConfigs.add(opt.tsConfig);
+        }
+      }
+    }
+
+    for (const tsConfig of uniqueTsConfigs) {
+      if (host.exists(tsConfig)) {
+        updateModuleResolution(host, tsConfig);
+      }
+    }
+  };
+}
+
+function updateModuleResolution(host: Tree, tsConfigPath: string): void {
+  const json = new JSONFile(host, tsConfigPath);
+  const jsonPath = ['compilerOptions'];
+  const compilerOptions = json.get(jsonPath);
+
+  if (compilerOptions && typeof compilerOptions === 'object') {
+    const { moduleResolution, module } = compilerOptions as JsonObject;
+    if (typeof moduleResolution !== 'string' || moduleResolution.toLowerCase() === 'bundler') {
+      return;
+    }
+
+    if (typeof module === 'string' && module.toLowerCase() === 'preserve') {
+      return;
+    }
+
+    json.modify(jsonPath, {
+      ...compilerOptions,
+      'moduleResolution': 'bundler',
+    });
+  }
+}
diff --git a/packages/schematics/angular/migrations/update-module-resolution/migration_spec.ts b/packages/schematics/angular/migrations/update-module-resolution/migration_spec.ts
new file mode 100644
index 000000000000..53448e80b66a
--- /dev/null
+++ b/packages/schematics/angular/migrations/update-module-resolution/migration_spec.ts
@@ -0,0 +1,118 @@
+/**
+ * @license
+ * Copyright Google LLC All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.dev/license
+ */
+
+import { isJsonObject } from '@angular-devkit/core';
+import { EmptyTree } from '@angular-devkit/schematics';
+import { SchematicTestRunner, UnitTestTree } from '@angular-devkit/schematics/testing';
+import { Builders, ProjectType, WorkspaceSchema } from '../../utility/workspace-models';
+
+describe('Migration to update moduleResolution', () => {
+  const schematicName = 'update-module-resolution';
+  const schematicRunner = new SchematicTestRunner(
+    'migrations',
+    require.resolve('../migration-collection.json'),
+  );
+
+  function createJsonFile(tree: UnitTestTree, filePath: string, content: {}): void {
+    const stringifiedContent = JSON.stringify(content, undefined, 2);
+    if (tree.exists(filePath)) {
+      tree.overwrite(filePath, stringifiedContent);
+    } else {
+      tree.create(filePath, stringifiedContent);
+    }
+  }
+
+  function getCompilerOptionsValue(tree: UnitTestTree, filePath: string): Record<string, unknown> {
+    const json = tree.readJson(filePath);
+    if (isJsonObject(json) && isJsonObject(json.compilerOptions)) {
+      return json.compilerOptions;
+    }
+
+    throw new Error(`Cannot retrieve 'compilerOptions'.`);
+  }
+
+  const angularConfig: WorkspaceSchema = {
+    version: 1,
+    projects: {
+      app: {
+        root: '',
+        sourceRoot: 'src',
+        projectType: ProjectType.Application,
+        prefix: 'app',
+        architect: {
+          build: {
+            builder: Builders.Browser,
+            options: {
+              tsConfig: 'src/tsconfig.app.json',
+              main: '',
+              polyfills: '',
+            },
+            configurations: {
+              production: {
+                tsConfig: 'src/tsconfig.app.prod.json',
+              },
+            },
+          },
+          test: {
+            builder: Builders.Karma,
+            options: {
+              karmaConfig: '',
+              tsConfig: 'src/tsconfig.spec.json',
+            },
+          },
+        },
+      },
+    },
+  };
+
+  let tree: UnitTestTree;
+  beforeEach(() => {
+    tree = new UnitTestTree(new EmptyTree());
+    const compilerOptions = { module: 'es2020', moduleResolution: 'node' };
+    const configWithExtends = { extends: './tsconfig.json', compilerOptions };
+
+    // Workspace
+    createJsonFile(tree, 'angular.json', angularConfig);
+    createJsonFile(tree, 'tsconfig.json', { compilerOptions });
+
+    // Application
+    createJsonFile(tree, 'src/tsconfig.app.json', configWithExtends);
+    createJsonFile(tree, 'src/tsconfig.app.prod.json', configWithExtends);
+    createJsonFile(tree, 'src/tsconfig.spec.json', { compilerOptions });
+  });
+
+  it(`should update moduleResolution to 'bundler' in workspace 'tsconfig.json'`, async () => {
+    const newTree = await schematicRunner.runSchematic(schematicName, {}, tree);
+    const compilerOptions = getCompilerOptionsValue(newTree, 'tsconfig.json');
+    expect(compilerOptions).toEqual(
+      jasmine.objectContaining({
+        moduleResolution: 'bundler',
+      }),
+    );
+  });
+
+  it(`should update moduleResolution to 'bundler' in builder tsconfig`, async () => {
+    const newTree = await schematicRunner.runSchematic(schematicName, {}, tree);
+    const compilerOptions = getCompilerOptionsValue(newTree, 'src/tsconfig.spec.json');
+    expect(compilerOptions).toEqual(
+      jasmine.objectContaining({
+        moduleResolution: 'bundler',
+      }),
+    );
+  });
+
+  it('should not update moduleResolution when module is preserve', async () => {
+    createJsonFile(tree, 'tsconfig.json', {
+      compilerOptions: { module: 'preserve', moduleResolution: 'node' },
+    });
+
+    const newTree = await schematicRunner.runSchematic(schematicName, {}, tree);
+    const compilerOptions = getCompilerOptionsValue(newTree, 'tsconfig.json');
+    expect(compilerOptions).toEqual({ module: 'preserve', moduleResolution: 'node' });
+  });
+});