diff --git a/aodh/api/hooks.py b/aodh/api/hooks.py
index 0965ebca2..dfc813b7a 100644
--- a/aodh/api/hooks.py
+++ b/aodh/api/hooks.py
@@ -13,11 +13,19 @@
 # License for the specific language governing permissions and limitations
 # under the License.
 
+from oslo_config import cfg
+from oslo_policy import opts
 from oslo_policy import policy
 from pecan import hooks
 
 from aodh.api import policies
 
+# 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(cfg.CONF, DEFAULT_POLICY_FILE)
+
 
 class ConfigHook(hooks.PecanHook):
     """Attach the configuration and policy enforcer object to the request.
diff --git a/aodh/cmd/status.py b/aodh/cmd/status.py
index cefe168b3..db7762a32 100644
--- a/aodh/cmd/status.py
+++ b/aodh/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 aodh.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/aodh/conf/defaults.py b/aodh/conf/defaults.py
index 8750c9c1d..e6ace8550 100644
--- a/aodh/conf/defaults.py
+++ b/aodh/conf/defaults.py
@@ -12,7 +12,23 @@
 # License for the specific language governing permissions and limitations
 # under the License.
 
+from oslo_config import cfg
 from oslo_middleware import cors
+from oslo_policy import opts as policy_opts
+
+
+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_cors_middleware_defaults()
+
+    # Update default value of oslo.policy policy_file config option.
+    policy_opts.set_defaults(cfg.CONF, 'policy.yaml')
 
 
 def set_cors_middleware_defaults():
diff --git a/aodh/service.py b/aodh/service.py
index e83198791..6e747709e 100644
--- a/aodh/service.py
+++ b/aodh/service.py
@@ -87,7 +87,7 @@ def prepare_service(argv=None, config_files=None):
     if profiler_opts:
         profiler_opts.set_defaults(conf)
     policy_opts.set_defaults(conf, policy_file=os.path.abspath(
-        os.path.join(os.path.dirname(__file__), "api", "policy.json")))
+        os.path.join(os.path.dirname(__file__), "api", "policy.yaml")))
     from aodh import opts
     # Register our own Aodh options
     for group, options in opts.list_opts():
diff --git a/aodh/tests/functional/api/v2/policy.json-test b/aodh/tests/functional/api/v2/policy.json-test
deleted file mode 100644
index 58a01a7ab..000000000
--- a/aodh/tests/functional/api/v2/policy.json-test
+++ /dev/null
@@ -1,7 +0,0 @@
-{
-    "context_is_admin": "role:admin",
-    "segregation": "rule:context_is_admin",
-    "admin_or_owner": "rule:context_is_admin or project_id:%(project_id)s",
-    "default": "rule:admin_or_owner",
-    "telemetry:get_alarms": "role:admin"
-}
diff --git a/aodh/tests/functional/api/v2/policy.yaml-test b/aodh/tests/functional/api/v2/policy.yaml-test
new file mode 100644
index 000000000..7a09cb594
--- /dev/null
+++ b/aodh/tests/functional/api/v2/policy.yaml-test
@@ -0,0 +1,8 @@
+# WARNING: Below rules are either deprecated rules
+# or extra rules in policy file, it is strongly
+# recommended to switch to new rules.
+"context_is_admin": "role:admin"
+"segregation": "rule:context_is_admin"
+"admin_or_owner": "rule:context_is_admin or project_id:%(project_id)s"
+"default": "rule:admin_or_owner"
+"telemetry:get_alarms": "role:admin"
diff --git a/aodh/tests/functional/api/v2/test_alarm_scenarios.py b/aodh/tests/functional/api/v2/test_alarm_scenarios.py
index a6e380f62..3d2e55de3 100644
--- a/aodh/tests/functional/api/v2/test_alarm_scenarios.py
+++ b/aodh/tests/functional/api/v2/test_alarm_scenarios.py
@@ -414,7 +414,7 @@ class TestAlarms(TestAlarmsBase):
         _test('project_id')
 
     def test_get_alarm_forbiden(self):
-        pf = os.path.abspath('aodh/tests/functional/api/v2/policy.json-test')
+        pf = os.path.abspath('aodh/tests/functional/api/v2/policy.yaml-test')
         self.CONF.set_override('policy_file', pf, group='oslo_policy')
         self.CONF.set_override('auth_mode', None, group='api')
         self.app = webtest.TestApp(app.load_app(self.CONF))
diff --git a/aodh/tests/unit/cmd/test_status.py b/aodh/tests/unit/cmd/test_status.py
index b5dc275ff..f479b2cde 100644
--- a/aodh/tests/unit/cmd/test_status.py
+++ b/aodh/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 aodh.cmd import status
@@ -23,8 +24,13 @@ class TestUpgradeChecks(base.BaseTestCase):
     def setUp(self):
         super(TestUpgradeChecks, self).setUp()
         self.cmd = status.Checks()
+        cfg.CONF(args=[], project='aodh')
 
-    def test__sample_check(self):
-        check_result = self.cmd._sample_check()
-        self.assertEqual(
-            Code.SUCCESS, check_result.code)
+    def test_checks(self):
+        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/doc/source/configuration/policy.rst b/doc/source/configuration/policy.rst
index 1593f24cc..f47f8bdcb 100644
--- a/doc/source/configuration/policy.rst
+++ b/doc/source/configuration/policy.rst
@@ -2,6 +2,14 @@
 Aodh Sample Policy Configuration File
 =====================================
 
+.. warning::
+
+   JSON formatted policy file is deprecated since Aodh 12.0.0 (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 an overview of all available policies in Aodh.
 For a sample configuration file, refer to :doc:`sample-policy-yaml`.
 
diff --git a/doc/source/configuration/sample-policy-yaml.rst b/doc/source/configuration/sample-policy-yaml.rst
index 90e1e1183..01b29fd44 100644
--- a/doc/source/configuration/sample-policy-yaml.rst
+++ b/doc/source/configuration/sample-policy-yaml.rst
@@ -2,6 +2,14 @@
 policy.yaml
 ===========
 
+.. warning::
+
+   JSON formatted policy file is deprecated since Aodh 12.0.0 (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
+
 Use the ``policy.yaml`` file to define additional access controls that will be
 applied to Aodh:
 
diff --git a/releasenotes/notes/deprecate-json-formatted-policy-file-fgb26387a9bdb3b9.yaml b/releasenotes/notes/deprecate-json-formatted-policy-file-fgb26387a9bdb3b9.yaml
new file mode 100644
index 000000000..c9c530004
--- /dev/null
+++ b/releasenotes/notes/deprecate-json-formatted-policy-file-fgb26387a9bdb3b9.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 435b8f900..54dabb670 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -10,12 +10,12 @@ keystonemiddleware>=5.1.0 # Apache-2.0
 gnocchiclient>=3.1.0  # Apache-2.0
 lxml>=2.3
 oslo.db>=4.8.0,!=4.13.1,!=4.13.2,!=4.15.0 # Apache-2.0
-oslo.config>=2.6.0 # Apache-2.0
+oslo.config>=6.8.0 # Apache-2.0
 oslo.context>=2.22.0 # Apache-2.0
 oslo.i18n>=1.5.0 # Apache-2.0
 oslo.log>=4.3.0 # Apache-2.0
 oslo.policy>=3.6.0 # Apache-2.0
-oslo.upgradecheck>=0.1.1 # Apache-2.0
+oslo.upgradecheck>=1.3.0 # Apache-2.0
 PasteDeploy>=1.5.0
 pbr>=2.0.0 # Apache-2.0
 pecan>=0.8.0
diff --git a/setup.cfg b/setup.cfg
index d88c8faaf..539661748 100644
--- a/setup.cfg
+++ b/setup.cfg
@@ -110,7 +110,7 @@ oslo.config.opts =
     aodh-auth = aodh.opts:list_keystoneauth_opts
 
 oslo.config.opts.defaults =
-    aodh = aodh.conf.defaults:set_cors_middleware_defaults
+    aodh = aodh.conf.defaults:set_lib_defaults
 
 oslo.policy.policies =
     aodh = aodh.api.policies:list_rules