diff --git a/.tool-versions b/.tool-versions
index 3fc08ecf..ef42eb2c 100644
--- a/.tool-versions
+++ b/.tool-versions
@@ -4,8 +4,7 @@ helm 3.14.0
 kapp 0.60.0
 kubectl 1.29.1
 python 3.12.1
-terraform 1.7.0
-terraform-lsp 0.0.12
+opentofu 1.1.4
 terragrunt 0.54.22
 vendir 0.39.0
 yq 4.40.5
diff --git a/README.md b/README.md
index 10ced716..b97a70a1 100644
--- a/README.md
+++ b/README.md
@@ -18,7 +18,7 @@ Please see [ARC Readme](<./docs/actions-runner-controller/README.md>)
 The required tools to work with this repository are:
   * glcoud
   * helm
-  * terraform
+  * opentofu
   * terragrunt
   * kapp
   * ytt
diff --git a/flake.lock b/flake.lock
index c21f4c25..9563a153 100644
--- a/flake.lock
+++ b/flake.lock
@@ -2,11 +2,11 @@
   "nodes": {
     "nixpkgs-repo": {
       "locked": {
-        "lastModified": 1701539137,
-        "narHash": "sha256-nVO/5QYpf1GwjvtpXhyxx5M3U/WN0MwBro4Lsk+9mL0=",
+        "lastModified": 1705916986,
+        "narHash": "sha256-iBpfltu6QvN4xMpen6jGGEb6jOqmmVQKUrXdOJ32u8w=",
         "owner": "NixOS",
         "repo": "nixpkgs",
-        "rev": "933d7dc155096e7575d207be6fb7792bc9f34f6d",
+        "rev": "d7f206b723e42edb09d9d753020a84b3061a79d8",
         "type": "github"
       },
       "original": {
diff --git a/flake.nix b/flake.nix
index 1443c12f..5e931b83 100644
--- a/flake.nix
+++ b/flake.nix
@@ -26,13 +26,6 @@
       # Nixpkgs instantiated for supported system types.
       nixpkgsFor = forAllSystems (system: import nixpkgs-repo {
         inherit system;
-        config = {
-          ## Prefer allowing specific packages when unfree over general permission.
-          # allowUnfree = true;
-          allowUnfreePredicate = pkg: builtins.elem (nixpkgsLib.getName pkg) [
-             "terraform"
-           ];
-        };
       });
     in {
       packages = forAllSystems (system:
@@ -55,7 +48,7 @@
               kapp
               kubectl
               kubernetes-helm
-              terraform
+              opentofu
               terragrunt
               vendir
               ytt