diff --git a/.gitignore b/.gitignore
index 6c4816b..17f183c 100644
--- a/.gitignore
+++ b/.gitignore
@@ -81,4 +81,4 @@ docs/_static/
 docs/_templates/
 
 # Logs
-*.log
\ No newline at end of file
+*.logsrc/deltaglider/_version.py
diff --git a/pyproject.toml b/pyproject.toml
index 7cbe64b..44d19db 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,6 +1,10 @@
+[build-system]
+requires = ["setuptools>=61.0", "setuptools-scm>=8.0"]
+build-backend = "setuptools.build_meta"
+
 [project]
 name = "deltaglider"
-version = "0.1.0"
+dynamic = ["version"]
 description = "Store 4TB in 5GB: S3-compatible storage with 99.9% compression for versioned files"
 authors = [
     {name = "Beshu Tech", email = "info@beshu.tech"},
@@ -74,12 +78,6 @@ dev = [
 [project.scripts]
 deltaglider = "deltaglider.app.cli.main:main"
 
-[build-system]
-requires = ["hatchling"]
-build-backend = "hatchling.build"
-
-[tool.hatch.build.targets.wheel]
-packages = ["src/deltaglider"]
 
 [tool.hatch.build.targets.sdist]
 include = [
@@ -111,8 +109,15 @@ dev-dependencies = [
     "mypy>=1.13.0",
     "boto3-stubs[s3]>=1.35.0",
     "types-python-dateutil>=2.9.0",
+    "setuptools-scm>=8.0.0",
 ]
 
+[tool.setuptools_scm]
+# Automatically determine version from git tags
+write_to = "src/deltaglider/_version.py"
+version_scheme = "post-release"
+local_scheme = "no-local-version"
+
 [tool.ruff]
 target-version = "py311"
 line-length = 100
diff --git a/src/deltaglider/__init__.py b/src/deltaglider/__init__.py
index 8286467..dc65508 100644
--- a/src/deltaglider/__init__.py
+++ b/src/deltaglider/__init__.py
@@ -1,3 +1,7 @@
 """DeltaGlider - Delta-aware S3 file storage wrapper."""
 
-__version__ = "0.1.0"
+try:
+    from ._version import version as __version__
+except ImportError:
+    # Package is not installed, so version is not available
+    __version__ = "0.0.0+unknown"
diff --git a/src/deltaglider/_version.py b/src/deltaglider/_version.py
new file mode 100644
index 0000000..34c868d
--- /dev/null
+++ b/src/deltaglider/_version.py
@@ -0,0 +1,34 @@
+# file generated by setuptools-scm
+# don't change, don't track in version control
+
+__all__ = [
+    "__version__",
+    "__version_tuple__",
+    "version",
+    "version_tuple",
+    "__commit_id__",
+    "commit_id",
+]
+
+TYPE_CHECKING = False
+if TYPE_CHECKING:
+    from typing import Tuple
+    from typing import Union
+
+    VERSION_TUPLE = Tuple[Union[int, str], ...]
+    COMMIT_ID = Union[str, None]
+else:
+    VERSION_TUPLE = object
+    COMMIT_ID = object
+
+version: str
+__version__: str
+__version_tuple__: VERSION_TUPLE
+version_tuple: VERSION_TUPLE
+commit_id: COMMIT_ID
+__commit_id__: COMMIT_ID
+
+__version__ = version = '0.1.1.post0'
+__version_tuple__ = version_tuple = (0, 1, 1, 'post0')
+
+__commit_id__ = commit_id = 'g02bce8053'