diff --git a/apis/placement/v1alpha1/common.go b/apis/placement/v1alpha1/common.go
index 1f04a0fb0..88023cf63 100644
--- a/apis/placement/v1alpha1/common.go
+++ b/apis/placement/v1alpha1/common.go
@@ -35,5 +35,5 @@ const (
 	ApprovalTaskNameFmt = "%s-%s"
 
 	// OverrideClusterNameVariable is the reserved variable in the override value that will be replaced by the actual cluster name.
-	OverrideClusterNameVariable = "$CLUSTER-NAME"
+	OverrideClusterNameVariable = "${MEMBER-CLUSTER-NAME}"
 )
diff --git a/apis/placement/v1alpha1/override_types.go b/apis/placement/v1alpha1/override_types.go
index 38c90fd4c..5efb9a6f9 100644
--- a/apis/placement/v1alpha1/override_types.go
+++ b/apis/placement/v1alpha1/override_types.go
@@ -194,7 +194,7 @@ type JSONPatchOverride struct {
 	// We have reserved a few variables in this field that will be replaced by the actual values.
 	// Those variables all start with `$` and are case sensitive.
 	// Here is the list of currently supported variables:
-	// `$CLUSTER-NAME`:  this will be replaced by the actual cluster name.
+	// `${MEMBER-CLUSTER-NAME}`:  this will be replaced by the actual cluster name.
 	// +optional
 	Value apiextensionsv1.JSON `json:"value,omitempty"`
 }
diff --git a/pkg/controllers/workgenerator/override.go b/pkg/controllers/workgenerator/override.go
index 30a54b1e9..d2007207a 100644
--- a/pkg/controllers/workgenerator/override.go
+++ b/pkg/controllers/workgenerator/override.go
@@ -198,16 +198,27 @@ func applyJSONPatchOverride(resourceContent *placementv1beta1.ResourceContent, c
 	if len(overrides) == 0 { // do nothing
 		return nil
 	}
+	// go through the JSON patch overrides to replace the built-in variables
+	var processedOverrides []placementv1alpha1.JSONPatchOverride
+	for _, override := range overrides {
+		// Replace the built-in variable with the actual cluster name
+		processedOverride := placementv1alpha1.JSONPatchOverride{
+			Operator: override.Operator,
+			Path:     override.Path,
+		}
+		// find and replace a few special built-in variables
+		processedJSONStr := []byte(strings.ReplaceAll(string(override.Value.Raw), placementv1alpha1.OverrideClusterNameVariable, cluster.Name))
+		processedOverride.Value.Raw = processedJSONStr
+		processedOverrides = append(processedOverrides, processedOverride)
+	}
 
-	jsonPatchBytes, err := json.Marshal(overrides)
+	jsonPatchBytes, err := json.Marshal(processedOverrides)
 	if err != nil {
 		klog.ErrorS(err, "Failed to marshal JSON Patch overrides")
 		return err
 	}
-	// Process the JSON patch to treat a few special built-in variables
-	processedJSONStr := strings.ReplaceAll(string(jsonPatchBytes), placementv1alpha1.OverrideClusterNameVariable, cluster.Name)
 
-	patch, err := jsonpatch.DecodePatch([]byte(processedJSONStr))
+	patch, err := jsonpatch.DecodePatch([]byte(jsonPatchBytes))
 	if err != nil {
 		klog.ErrorS(err, "Failed to decode the passed JSON document as an RFC 6902 patch")
 		return err
diff --git a/pkg/controllers/workgenerator/override_test.go b/pkg/controllers/workgenerator/override_test.go
index 0542b22bb..7f69f064a 100644
--- a/pkg/controllers/workgenerator/override_test.go
+++ b/pkg/controllers/workgenerator/override_test.go
@@ -8,6 +8,7 @@ package workgenerator
 import (
 	"context"
 	"errors"
+	"fmt"
 	"testing"
 
 	"github.com/google/go-cmp/cmp"
@@ -2005,12 +2006,12 @@ func TestApplyOverrides_namespacedScopeResource(t *testing.T) {
 												{
 													Operator: placementv1alpha1.JSONPatchOverrideOpReplace,
 													Path:     "/metadata/labels/app",
-													Value:    apiextensionsv1.JSON{Raw: []byte(`"$CLUSTER-NAME"`)},
+													Value:    apiextensionsv1.JSON{Raw: []byte(fmt.Sprintf(`"%s"`, placementv1alpha1.OverrideClusterNameVariable))},
 												},
 												{
 													Operator: placementv1alpha1.JSONPatchOverrideOpAdd,
 													Path:     "/metadata/annotations",
-													Value:    apiextensionsv1.JSON{Raw: []byte(`{"app": "$CLUSTER-NAME", "test": "nginx"}`)},
+													Value:    apiextensionsv1.JSON{Raw: []byte(fmt.Sprintf("{\"app\": \"%s\", \"test\": \"nginx\"}", placementv1alpha1.OverrideClusterNameVariable))},
 												},
 											},
 										},
@@ -2334,12 +2335,12 @@ func TestApplyJSONPatchOverride(t *testing.T) {
 				{
 					Operator: placementv1alpha1.JSONPatchOverrideOpReplace,
 					Path:     "/metadata/labels/app",
-					Value:    apiextensionsv1.JSON{Raw: []byte(`"$CLUSTER-NAME"`)},
+					Value:    apiextensionsv1.JSON{Raw: []byte(fmt.Sprintf(`"%s"`, placementv1alpha1.OverrideClusterNameVariable))},
 				},
 				{
 					Operator: placementv1alpha1.JSONPatchOverrideOpAdd,
 					Path:     "/metadata/annotations",
-					Value:    apiextensionsv1.JSON{Raw: []byte(`{"app": "$CLUSTER-NAME", "test": "nginx"}`)},
+					Value:    apiextensionsv1.JSON{Raw: []byte(fmt.Sprintf("{\"app\": \"%s\", \"test\": \"nginx\"}", placementv1alpha1.OverrideClusterNameVariable))},
 				},
 			},
 			cluster: &clusterv1beta1.MemberCluster{