diff --git a/docs/source/kedro_project_setup/starters.md b/docs/source/kedro_project_setup/starters.md
index 7505151935..305fe1de00 100644
--- a/docs/source/kedro_project_setup/starters.md
+++ b/docs/source/kedro_project_setup/starters.md
@@ -164,7 +164,7 @@ Here is the layout of the project as a Cookiecutter template:
        ├── __main__.py
        └── settings.py
     ├── requirements.txt
-    ├── setup.py
+    ├── pyproject.toml
     └── tests
 ```
 
diff --git a/features/steps/test_starter/{{ cookiecutter.repo_name }}/src/pyproject.toml b/features/steps/test_starter/{{ cookiecutter.repo_name }}/src/pyproject.toml
new file mode 100644
index 0000000000..ea581e7028
--- /dev/null
+++ b/features/steps/test_starter/{{ cookiecutter.repo_name }}/src/pyproject.toml	
@@ -0,0 +1,31 @@
+[build-system]
+requires = ["setuptools"]
+build-backend = "setuptools.build_meta"
+
+[project]
+name = "{{ cookiecutter.python_package }}"
+version = "0.1"
+dynamic = ["dependencies"]
+
+[tool.setuptools.packages.find]
+exclude = ["tests"]
+
+[project.scripts]
+{{ cookiecutter.repo_name }} = "{{ cookiecutter.python_package }}.__main__:main"
+
+[project.optional-dependencies]
+docs = [
+    "docutils<0.18.0",
+    "sphinx~=3.4.3",
+    "sphinx_rtd_theme==0.5.1",
+    "nbsphinx==0.8.1",
+    "nbstripout~=0.4",
+    "sphinx-autodoc-typehints==1.11.1",
+    "sphinx_copybutton==0.3.1",
+    "ipykernel>=5.3, <7.0",
+    "Jinja2<3.1.0",
+    "myst-parser~=0.17.2",
+]
+
+[tool.setuptools.dynamic]
+dependencies = {file = "requirements.txt"}
diff --git a/features/steps/test_starter/{{ cookiecutter.repo_name }}/src/setup.py b/features/steps/test_starter/{{ cookiecutter.repo_name }}/src/setup.py
deleted file mode 100644
index af5b101519..0000000000
--- a/features/steps/test_starter/{{ cookiecutter.repo_name }}/src/setup.py	
+++ /dev/null
@@ -1,39 +0,0 @@
-from setuptools import find_packages, setup
-
-entry_point = (
-    "{{ cookiecutter.repo_name }} = {{ cookiecutter.python_package }}.__main__:main"
-)
-
-
-# get the dependencies and installs
-with open("requirements.txt", encoding="utf-8") as f:
-    # Make sure we strip all comments and options (e.g "--extra-index-url")
-    # that arise from a modified pip.conf file that configure global options
-    # when running kedro build-reqs
-    requires = []
-    for line in f:
-        req = line.split("#", 1)[0].strip()
-        if req and not req.startswith("-r"):
-            requires.append(req)
-
-setup(
-    name="{{ cookiecutter.python_package }}",
-    version="0.1",
-    packages=find_packages(exclude=["tests"]),
-    entry_points={"console_scripts": [entry_point]},
-    install_requires=requires,
-    extras_require={
-        "docs": [
-            "docutils<0.18.0",
-            "sphinx~=3.4.3",
-            "sphinx_rtd_theme==0.5.1",
-            "nbsphinx==0.8.1",
-            "nbstripout~=0.4",
-            "sphinx-autodoc-typehints==1.11.1",
-            "sphinx_copybutton==0.3.1",
-            "ipykernel>=5.3, <7.0",
-            "Jinja2<3.1.0",
-            "myst-parser~=0.17.2",
-        ]
-    },
-)
diff --git a/kedro/templates/project/{{ cookiecutter.repo_name }}/src/pyproject.toml b/kedro/templates/project/{{ cookiecutter.repo_name }}/src/pyproject.toml
new file mode 100644
index 0000000000..ea581e7028
--- /dev/null
+++ b/kedro/templates/project/{{ cookiecutter.repo_name }}/src/pyproject.toml	
@@ -0,0 +1,31 @@
+[build-system]
+requires = ["setuptools"]
+build-backend = "setuptools.build_meta"
+
+[project]
+name = "{{ cookiecutter.python_package }}"
+version = "0.1"
+dynamic = ["dependencies"]
+
+[tool.setuptools.packages.find]
+exclude = ["tests"]
+
+[project.scripts]
+{{ cookiecutter.repo_name }} = "{{ cookiecutter.python_package }}.__main__:main"
+
+[project.optional-dependencies]
+docs = [
+    "docutils<0.18.0",
+    "sphinx~=3.4.3",
+    "sphinx_rtd_theme==0.5.1",
+    "nbsphinx==0.8.1",
+    "nbstripout~=0.4",
+    "sphinx-autodoc-typehints==1.11.1",
+    "sphinx_copybutton==0.3.1",
+    "ipykernel>=5.3, <7.0",
+    "Jinja2<3.1.0",
+    "myst-parser~=0.17.2",
+]
+
+[tool.setuptools.dynamic]
+dependencies = {file = "requirements.txt"}
diff --git a/kedro/templates/project/{{ cookiecutter.repo_name }}/src/setup.py b/kedro/templates/project/{{ cookiecutter.repo_name }}/src/setup.py
deleted file mode 100644
index 8e62d661f8..0000000000
--- a/kedro/templates/project/{{ cookiecutter.repo_name }}/src/setup.py	
+++ /dev/null
@@ -1,39 +0,0 @@
-from setuptools import find_packages, setup
-
-entry_point = (
-    "{{ cookiecutter.repo_name }} = {{ cookiecutter.python_package }}.__main__:main"
-)
-
-
-# get the dependencies and installs
-with open("requirements.txt", encoding="utf-8") as f:
-    # Make sure we strip all comments and options (e.g "--extra-index-url")
-    # that arise from a modified pip.conf file that configure global options
-    # when running kedro build-reqs
-    requires = []
-    for line in f:
-        req = line.split("#", 1)[0].strip()
-        if req and not req.startswith("--"):
-            requires.append(req)
-
-setup(
-    name="{{ cookiecutter.python_package }}",
-    version="0.1",
-    packages=find_packages(exclude=["tests"]),
-    entry_points={"console_scripts": [entry_point]},
-    install_requires=requires,
-    extras_require={
-        "docs": [
-            "docutils<0.18.0",
-            "sphinx~=3.4.3",
-            "sphinx_rtd_theme==0.5.1",
-            "nbsphinx==0.8.1",
-            "nbstripout~=0.4",
-            "sphinx-autodoc-typehints==1.11.1",
-            "sphinx_copybutton==0.3.1",
-            "ipykernel>=5.3, <7.0",
-            "Jinja2<3.1.0",
-            "myst-parser~=0.17.2",
-        ]
-    },
-)