diff --git a/doc/source/admin/policy.rst b/doc/source/admin/policy.rst
index d32a275b8..911d42af0 100644
--- a/doc/source/admin/policy.rst
+++ b/doc/source/admin/policy.rst
@@ -17,6 +17,14 @@
 Policies
 ========
 
+.. warning::
+
+   JSON formatted policy file is deprecated since Watcher 6.0.0 (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
+
 Watcher's public API calls may be restricted to certain sets of users using a
 policy configuration file. This document explains exactly how policies are
 configured and what they apply to.
diff --git a/releasenotes/notes/deprecate-json-formatted-policy-file-3a92379e9f5dd203.yaml b/releasenotes/notes/deprecate-json-formatted-policy-file-3a92379e9f5dd203.yaml
new file mode 100644
index 000000000..c9c530004
--- /dev/null
+++ b/releasenotes/notes/deprecate-json-formatted-policy-file-3a92379e9f5dd203.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 46235be99..af0db6ad2 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -12,17 +12,17 @@ croniter>=0.3.20 # MIT License
 os-resource-classes>=0.4.0
 oslo.concurrency>=3.26.0 # Apache-2.0
 oslo.cache>=1.29.0 # Apache-2.0
-oslo.config>=5.2.0 # Apache-2.0
+oslo.config>=6.8.0 # Apache-2.0
 oslo.context>=2.21.0 # Apache-2.0
 oslo.db>=4.44.0 # Apache-2.0
 oslo.i18n>=3.20.0 # Apache-2.0
 oslo.log>=3.37.0 # Apache-2.0
 oslo.messaging>=8.1.2 # Apache-2.0
-oslo.policy>=1.34.0 # Apache-2.0
+oslo.policy>=3.6.0 # Apache-2.0
 oslo.reports>=1.27.0 # Apache-2.0
 oslo.serialization>=2.25.0 # Apache-2.0
 oslo.service>=1.30.0 # Apache-2.0
-oslo.upgradecheck>=0.1.0 # Apache-2.0
+oslo.upgradecheck>=1.3.0 # Apache-2.0
 oslo.utils>=3.36.0 # Apache-2.0
 oslo.versionedobjects>=1.32.0 # Apache-2.0
 PasteDeploy>=1.5.2 # MIT
diff --git a/watcher/cmd/status.py b/watcher/cmd/status.py
index 705089d78..bab78cc1d 100644
--- a/watcher/cmd/status.py
+++ b/watcher/cmd/status.py
@@ -14,6 +14,7 @@
 
 import sys
 
+from oslo_upgradecheck import common_checks
 from oslo_upgradecheck import upgradecheck
 
 from watcher._i18n import _
@@ -43,6 +44,10 @@ class Checks(upgradecheck.UpgradeCommands):
     _upgrade_checks = (
         # Added in Train.
         (_('Minimum Nova API Version'), _minimum_nova_api_version),
+        # Added in Wallaby.
+        (_("Policy File JSON to YAML Migration"),
+         (common_checks.check_policy_json, {'conf': CONF})),
+
     )
 
 
diff --git a/watcher/common/policy.py b/watcher/common/policy.py
index d2d12acf4..e9d8a0508 100644
--- a/watcher/common/policy.py
+++ b/watcher/common/policy.py
@@ -18,6 +18,7 @@
 import sys
 
 from oslo_config import cfg
+from oslo_policy import opts
 from oslo_policy import policy
 
 from watcher.common import exception
@@ -26,6 +27,12 @@ from watcher.common import policies
 _ENFORCER = None
 CONF = cfg.CONF
 
+# 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)
+
 
 # we can get a policy enforcer by this init.
 # oslo policy support change policy rule dynamically.
diff --git a/watcher/tests/policy_fixture.py b/watcher/tests/policy_fixture.py
index 8a5b4e876..25faf89cb 100644
--- a/watcher/tests/policy_fixture.py
+++ b/watcher/tests/policy_fixture.py
@@ -30,7 +30,7 @@ class PolicyFixture(fixtures.Fixture):
     def _setUp(self):
         self.policy_dir = self.useFixture(fixtures.TempDir())
         self.policy_file_name = os.path.join(self.policy_dir.path,
-                                             'policy.json')
+                                             'policy.yaml')
         with open(self.policy_file_name, 'w') as policy_file:
             policy_file.write(fake_policy.policy_data)
         policy_opts.set_defaults(CONF)