diff --git a/doc/source/configuration/sample_policy.rst b/doc/source/configuration/sample_policy.rst
index b34a463ba..67df03a15 100644
--- a/doc/source/configuration/sample_policy.rst
+++ b/doc/source/configuration/sample_policy.rst
@@ -2,6 +2,14 @@
 Murano Sample Policy
 ====================
 
+.. warning::
+
+   JSON formatted policy file is deprecated since Murano 11.0.0 (Wallaby).
+   This `oslopolicy-convert-json-to-yaml`__ tool will migrate your existing
+   JSON-formatted policy file to YAML in a backward-compatible way.
+
+.. __: https://docs.openstack.org/oslo.policy/latest/cli/oslopolicy-convert-json-to-yaml.html
+
 The following is a sample murano policy file that has been auto-generated
 from default policy values in code. If you're using the default policies, then
 the maintenance of this file is not necessary, and it should not be copied into
diff --git a/lower-constraints.txt b/lower-constraints.txt
index de4efc8bd..5ae4f6603 100644
--- a/lower-constraints.txt
+++ b/lower-constraints.txt
@@ -68,20 +68,20 @@ os-service-types==1.2.0
 osc-lib==1.14.0
 oslo.cache==1.29.0
 oslo.concurrency==3.26.0
-oslo.config==5.2.0
-oslo.context==2.19.2
+oslo.config==6.8.0
+oslo.context==2.22.0
 oslo.db==4.44.0
 oslo.i18n==3.15.3
 oslo.log==3.36.0
 oslo.messaging==5.29.0
 oslo.middleware==3.31.0
-oslo.policy==1.30.0
+oslo.policy==3.6.0
 oslo.serialization==2.18.0
 oslo.service==1.31.0
-oslo.upgradecheck==0.1.0
-oslo.utils==3.33.0
-oslotest==3.2.0
-packaging==17.1
+oslo.upgradecheck==1.3.0
+oslo.utils==4.5.0
+oslotest==4.4.1
+packaging==20.4
 Paste==2.0.2
 PasteDeploy==1.5.0
 pbr==2.0.0
@@ -121,11 +121,11 @@ python-openstackclient==4.0.0
 python-subunit==1.2.0
 python-swiftclient==3.5.0
 pytz==2018.3
-PyYAML==3.13
+PyYAML==5.1
 repoze.lru==0.7
-requests==2.14.2
+requests==2.20.0
 requestsexceptions==1.4.0
-rfc3986==1.1.0
+rfc3986==1.2.0
 Routes==2.3.1
 semantic-version==2.8.2
 simplejson==3.13.2
diff --git a/murano/cmd/status.py b/murano/cmd/status.py
index d4eed88eb..5c48b3896 100644
--- a/murano/cmd/status.py
+++ b/murano/cmd/status.py
@@ -15,6 +15,7 @@
 import sys
 
 from oslo_config import cfg
+from oslo_upgradecheck import common_checks
 from oslo_upgradecheck import upgradecheck
 
 from murano.common.i18n import _
@@ -30,17 +31,9 @@ class Checks(upgradecheck.UpgradeCommands):
     and added to _upgrade_checks tuple.
     """
 
-    def _sample_check(self):
-        """This is sample check added to test the upgrade check framework
-
-        It needs to be removed after adding any real upgrade check
-        """
-        return upgradecheck.Result(upgradecheck.Code.SUCCESS, 'Sample detail')
-
     _upgrade_checks = (
-        # Sample check added for now.
-        # Whereas in future real checks must be added here in tuple
-        (_('Sample Check'), _sample_check),
+        (_("Policy File JSON to YAML Migration"),
+         (common_checks.check_policy_json, {'conf': CONF})),
     )
 
 
diff --git a/murano/common/config.py b/murano/common/config.py
index 0b5029408..14dfa1326 100644
--- a/murano/common/config.py
+++ b/murano/common/config.py
@@ -17,6 +17,7 @@ from keystoneauth1 import loading as ks_loading
 from oslo_config import cfg
 from oslo_log import log as logging
 from oslo_middleware import cors
+from oslo_policy import opts
 
 from murano.common.i18n import _
 from murano import version
@@ -310,6 +311,23 @@ def parse_args(args=None, usage=None, default_config_files=None):
          default_config_files=default_config_files)
 
 
+def set_lib_defaults():
+    """Update default value for configuration options from other namespace.
+
+    Example, oslo lib config options. This is needed for
+    config generator tool to pick these default value changes.
+    https://docs.openstack.org/oslo.config/latest/cli/
+    generator.html#modifying-defaults-from-other-namespaces
+    """
+
+    set_middleware_defaults()
+
+    # TODO(gmann): Remove setting the default value of config policy_file
+    # once oslo_policy change the default value to 'policy.yaml'.
+    # https://github.com/openstack/oslo.policy/blob/a626ad12fe5a3abd49d70e3e5b95589d279ab578/oslo_policy/opts.py#L49
+    opts.set_defaults(CONF, 'policy.yaml')
+
+
 def set_middleware_defaults():
     """Update default configuration options for oslo.middleware."""
 
diff --git a/murano/common/policy.py b/murano/common/policy.py
index a648aabfb..f20a890e3 100644
--- a/murano/common/policy.py
+++ b/murano/common/policy.py
@@ -16,6 +16,7 @@
 
 from oslo_config import cfg
 from oslo_log import log as logging
+from oslo_policy import opts
 from oslo_policy import policy
 from webob import exc as exceptions
 
@@ -27,6 +28,12 @@ CONF = cfg.CONF
 
 _ENFORCER = None
 
+# TODO(gmann): Remove setting the default value of config policy_file
+# once oslo_policy change the default value to 'policy.yaml'.
+# https://github.com/openstack/oslo.policy/blob/a626ad12fe5a3abd49d70e3e5b95589d279ab578/oslo_policy/opts.py#L49
+DEFAULT_POLICY_FILE = 'policy.yaml'
+opts.set_defaults(CONF, DEFAULT_POLICY_FILE)
+
 
 def reset():
     global _ENFORCER
diff --git a/murano/tests/unit/api/base.py b/murano/tests/unit/api/base.py
index 99d675f12..c6c9f32e5 100644
--- a/murano/tests/unit/api/base.py
+++ b/murano/tests/unit/api/base.py
@@ -17,6 +17,7 @@ import logging
 from unittest import mock
 
 import fixtures
+from oslo_config import cfg
 from oslo_utils import timeutils
 import routes
 import urllib
@@ -126,7 +127,7 @@ class ControllerTest(object):
         super(ControllerTest, self).setUp()
 
         self.is_admin = False
-
+        cfg.CONF(args=[], project='murano')
         policy.init(use_conf=False)
         real_policy_check = policy.check
 
diff --git a/murano/tests/unit/cmd/test_status.py b/murano/tests/unit/cmd/test_status.py
index f9cef9a1a..a39928b6c 100644
--- a/murano/tests/unit/cmd/test_status.py
+++ b/murano/tests/unit/cmd/test_status.py
@@ -12,6 +12,7 @@
 #    License for the specific language governing permissions and limitations
 #    under the License.
 
+from oslo_config import cfg
 from oslo_upgradecheck.upgradecheck import Code
 
 from murano.cmd import status
@@ -24,7 +25,12 @@ class TestUpgradeChecks(base.MuranoTestCase):
         super(TestUpgradeChecks, self).setUp()
         self.cmd = status.Checks()
 
-    def test__sample_check(self):
-        check_result = self.cmd._sample_check()
-        self.assertEqual(
-            Code.SUCCESS, check_result.code)
+    def test_checks(self):
+        cfg.CONF(args=[], project='murano')
+        for name, func in self.cmd._upgrade_checks:
+            if isinstance(func, tuple):
+                func_name, kwargs = func
+                result = func_name(self, **kwargs)
+            else:
+                result = func(self)
+            self.assertEqual(Code.SUCCESS, result.code)
diff --git a/murano/tests/unit/common/test_auth_utils.py b/murano/tests/unit/common/test_auth_utils.py
index f64189d69..254f4e1f2 100644
--- a/murano/tests/unit/common/test_auth_utils.py
+++ b/murano/tests/unit/common/test_auth_utils.py
@@ -32,10 +32,6 @@ class TestAuthUtils(base.MuranoTestCase):
         password_option = ka_loading.get_auth_plugin_conf_options('password')
         cfg.CONF.register_opts(password_option,
                                group=auth_utils.CFG_MURANO_AUTH_GROUP)
-        self.addCleanup(
-            cfg.CONF.unregister_opts,
-            password_option,
-            group=auth_utils.CFG_MURANO_AUTH_GROUP)
         self.addCleanup(mock.patch.stopall)
 
     def _init_mock_cfg(self):
diff --git a/releasenotes/notes/deprecate-json-formatted-policy-file-b41728d03ee008e8.yaml b/releasenotes/notes/deprecate-json-formatted-policy-file-b41728d03ee008e8.yaml
new file mode 100644
index 000000000..c9c530004
--- /dev/null
+++ b/releasenotes/notes/deprecate-json-formatted-policy-file-b41728d03ee008e8.yaml
@@ -0,0 +1,20 @@
+---
+upgrade:
+  - |
+    The default value of ``[oslo_policy] policy_file`` config option has
+    been changed from ``policy.json`` to ``policy.yaml``.
+    Operators who are utilizing customized or previously generated
+    static policy JSON files (which are not needed by default), should
+    generate new policy files or convert them in YAML format. Use the
+    `oslopolicy-convert-json-to-yaml
+    <https://docs.openstack.org/oslo.policy/latest/cli/oslopolicy-convert-json-to-yaml.html>`_
+    tool to convert a JSON to YAML formatted policy file in
+    backward compatible way.
+deprecations:
+  - |
+    Use of JSON policy files was deprecated by the ``oslo.policy`` library
+    during the Victoria development cycle. As a result, this deprecation is
+    being noted in the Wallaby cycle with an anticipated future removal of support
+    by ``oslo.policy``. As such operators will need to convert to YAML policy
+    files. Please see the upgrade notes for details on migration of any
+    custom policy files.
diff --git a/requirements.txt b/requirements.txt
index d229ddabc..cf96071f5 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -14,7 +14,7 @@ WebOb>=1.7.1 # MIT
 kombu>=4.6.1 # BSD
 psutil>=3.2.2 # BSD
 netaddr>=0.7.18 # BSD
-PyYAML>=3.13 # MIT
+PyYAML>=5.1 # MIT
 jsonpatch!=1.20,>=1.16 # BSD
 keystoneauth1>=3.8.0 # Apache-2.0
 keystonemiddleware>=4.17.0 # Apache-2.0
@@ -33,17 +33,17 @@ python-neutronclient>=6.7.0 # Apache-2.0
 python-muranoclient>=0.8.2 # Apache-2.0
 python-mistralclient!=3.2.0,>=3.1.0 # Apache-2.0
 oslo.db>=4.44.0 # Apache-2.0
-oslo.config>=5.2.0 # Apache-2.0
+oslo.config>=6.8.0 # Apache-2.0
 oslo.concurrency>=3.26.0 # Apache-2.0
-oslo.context>=2.19.2 # Apache-2.0
-oslo.policy>=1.30.0 # Apache-2.0
+oslo.context>=2.22.0 # Apache-2.0
+oslo.policy>=3.6.0 # Apache-2.0
 oslo.messaging>=5.29.0 # Apache-2.0
 oslo.middleware>=3.31.0 # Apache-2.0
 oslo.serialization!=2.19.1,>=2.18.0 # Apache-2.0
 oslo.service>=1.31.0 # Apache-2.0
-oslo.utils>=3.33.0 # Apache-2.0
+oslo.utils>=4.5.0 # Apache-2.0
 oslo.i18n>=3.15.3 # Apache-2.0
 oslo.log>=3.36.0 # Apache-2.0
-oslo.upgradecheck>=0.1.0 # Apache-2.0
+oslo.upgradecheck>=1.3.0 # Apache-2.0
 semantic-version>=2.8.2 # BSD
 castellan>=0.18.0 # Apache-2.0
diff --git a/setup.cfg b/setup.cfg
index 38e84c3f1..375e6f8be 100644
--- a/setup.cfg
+++ b/setup.cfg
@@ -67,7 +67,7 @@ oslo.config.opts =
     castellan.config = castellan.options:list_opts
 
 oslo.config.opts.defaults =
-    murano = murano.common.config:set_middleware_defaults
+    murano = murano.common.config:set_lib_defaults
 
 oslo.policy.policies =
     # With the move of default policy in code list_rules returns a list of
diff --git a/test-requirements.txt b/test-requirements.txt
index 871265206..3ae121734 100644
--- a/test-requirements.txt
+++ b/test-requirements.txt
@@ -6,14 +6,14 @@ hacking>=3.0.1,<3.1.0 # Apache-2.0
 coverage!=4.4,>=4.0 # Apache-2.0
 fixtures>=3.0.0 # Apache-2.0/BSD
 nose>=1.3.7 # LGPL
-oslotest>=3.2.0 # Apache-2.0
+oslotest>=4.4.1 # Apache-2.0
 sqlalchemy-migrate>=0.11.0 # Apache-2.0
 testrepository>=0.0.18 # Apache-2.0/BSD
 testresources>=2.0.0 # Apache-2.0/BSD
 testscenarios>=0.4 # Apache-2.0/BSD
 pylint==1.4.5 # GPLv2
 pycodestyle>=2.5.0 # MIT License
-requests>=2.14.2 # Apache-2.0
+requests>=2.20.0 # Apache-2.0
 stestr>=2.0.0 # Apache-2.0
 murano-pkg-check>=0.3.0 # Apache-2.0
 bandit>=1.1.0,!=1.6.0 # Apache-2.0