diff --git a/.env b/.env
index 4a7e37cccc..90d5c648da 100644
--- a/.env
+++ b/.env
@@ -10,13 +10,16 @@ COLLECTOR_CONTRIB_IMAGE=otel/opentelemetry-collector-contrib:0.108.0
 FLAGD_IMAGE=ghcr.io/open-feature/flagd:v0.11.2
 GRAFANA_IMAGE=grafana/grafana:11.2.0
 JAEGERTRACING_IMAGE=jaegertracing/all-in-one:1.60
-# must also update version field in ./src/grafana/provisioning/datasources/opensearch.yaml
-OPENSEARCH_IMAGE=opensearchproject/opensearch:2.16.0
+OPENSEARCH_IMAGE_VERSION=2.16.0
+OPENSEARCH_IMAGE=opensearchproject/opensearch:${OPENSEARCH_IMAGE_VERSION}
 POSTGRES_IMAGE=postgres:16.4
 PROMETHEUS_IMAGE=quay.io/prometheus/prometheus:v2.54.1
-VALKEY_IMAGE=valkey/valkey:8.0-alpine
-# must also update the version arg in ./test/tracetesting/Dockerfile
-TRACETEST_IMAGE=kubeshop/tracetest:v1.5.2
+TRACETEST_IMAGE_VERSION=v1.5.4
+TRACETEST_IMAGE=kubeshop/tracetest:${TRACETEST_IMAGE_VERSION}
+VALKEY_IMAGE=valkey/valkey:7.2-alpine
+
+# OTel Java Agent Version
+JAVA_AGENT_VERSION=2.7.0
 
 # Demo Platform
 ENV_PLATFORM=local
diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0256ebf0cd..f7da2e247f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -13,6 +13,8 @@ the release.
   ([#1707](https://github.com/open-telemetry/opentelemetry-demo/pull/1707))
 * [chore] Fix gen-proto for accountingservice
   ([#1709](https://github.com/open-telemetry/opentelemetry-demo/pull/1709))
+* [chore] Move dependencies control to .env file
+  ([#1715](https://github.com/open-telemetry/opentelemetry-demo/pull/1715))
 * [accountingservice] bump OpenTelemetry .NET Automatic Instrumentation
   to 1.8.0 together with other dependencies
   ([#1727](https://github.com/open-telemetry/opentelemetry-demo/pull/1727))
diff --git a/docker-compose-tests.yml b/docker-compose-tests.yml
index 1c97ceb6ac..8bab0cb0cd 100644
--- a/docker-compose-tests.yml
+++ b/docker-compose-tests.yml
@@ -34,6 +34,8 @@ services:
     build:
       context: ./
       dockerfile: ./test/tracetesting/Dockerfile
+      args:
+        TRACETEST_IMAGE_VERSION: ${TRACETEST_IMAGE_VERSION}
     environment:
       - AD_SERVICE_ADDR
       - CART_SERVICE_ADDR
diff --git a/docker-compose.minimal.yml b/docker-compose.minimal.yml
index 68fe04d93e..0c63bd0bae 100644
--- a/docker-compose.minimal.yml
+++ b/docker-compose.minimal.yml
@@ -25,6 +25,8 @@ services:
     build:
       context: ./
       dockerfile: ${AD_SERVICE_DOCKERFILE}
+      args:
+        VERSION: ${JAVA_AGENT_VERSION}
       cache_from:
         - ${IMAGE_NAME}:${IMAGE_VERSION}-adservice
     deploy:
@@ -565,7 +567,7 @@ services:
           memory: 100M
     restart: unless-stopped
     environment:
-      - "GF_INSTALL_PLUGINS=grafana-opensearch-datasource"
+      - "GF_INSTALL_PLUGINS=grafana-opensearch-datasource ${OPENSEARCH_IMAGE_VERSION}"
     volumes:
       - ./src/grafana/grafana.ini:/etc/grafana/grafana.ini
       - ./src/grafana/provisioning/:/etc/grafana/provisioning/
diff --git a/docker-compose.yml b/docker-compose.yml
index 33358b6f4a..20b520fca6 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -51,6 +51,8 @@ services:
     build:
       context: ./
       dockerfile: ${AD_SERVICE_DOCKERFILE}
+      args:
+        VERSION: ${JAVA_AGENT_VERSION}
       cache_from:
         - ${IMAGE_NAME}:${IMAGE_VERSION}-adservice
     deploy:
@@ -222,6 +224,8 @@ services:
     build:
       context: ./
       dockerfile: ${FRAUD_SERVICE_DOCKERFILE}
+      args:
+        VERSION: ${JAVA_AGENT_VERSION}
       cache_from:
         - ${IMAGE_NAME}:${IMAGE_VERSION}-frauddetectionservice
     deploy:
@@ -604,6 +608,8 @@ services:
     build:
       context: ./
       dockerfile: ${KAFKA_SERVICE_DOCKERFILE}
+      args:
+        VERSION: ${JAVA_AGENT_VERSION}
       cache_from:
         - ${IMAGE_NAME}:${IMAGE_VERSION}-kafka
     deploy:
@@ -676,7 +682,7 @@ services:
           memory: 100M
     restart: unless-stopped
     environment:
-      - "GF_INSTALL_PLUGINS=grafana-opensearch-datasource"
+      - "GF_INSTALL_PLUGINS=grafana-opensearch-datasource ${OPENSEARCH_IMAGE_VERSION}"
     volumes:
       - ./src/grafana/grafana.ini:/etc/grafana/grafana.ini
       - ./src/grafana/provisioning/:/etc/grafana/provisioning/
diff --git a/src/adservice/Dockerfile b/src/adservice/Dockerfile
index 97c2ebd1ed..aca648210d 100644
--- a/src/adservice/Dockerfile
+++ b/src/adservice/Dockerfile
@@ -20,11 +20,11 @@ RUN ./gradlew installDist -PprotoSourceDir=./proto
 
 FROM eclipse-temurin:21-jre
 
-ARG version=2.6.0
+ARG VERSION
 WORKDIR /usr/src/app/
 
 COPY --from=builder /usr/src/app/ ./
-ADD --chmod=644 https://github.com/open-telemetry/opentelemetry-java-instrumentation/releases/download/v$version/opentelemetry-javaagent.jar /usr/src/app/opentelemetry-javaagent.jar
+ADD --chmod=644 https://github.com/open-telemetry/opentelemetry-java-instrumentation/releases/download/v$VERSION/opentelemetry-javaagent.jar /usr/src/app/opentelemetry-javaagent.jar
 ENV JAVA_TOOL_OPTIONS=-javaagent:/usr/src/app/opentelemetry-javaagent.jar
 
 EXPOSE ${AD_SERVICE_PORT}
diff --git a/src/frauddetectionservice/Dockerfile b/src/frauddetectionservice/Dockerfile
index c7e17158b3..7ca8b1c144 100644
--- a/src/frauddetectionservice/Dockerfile
+++ b/src/frauddetectionservice/Dockerfile
@@ -14,11 +14,11 @@ RUN gradle shadowJar
 
 FROM gcr.io/distroless/java17-debian11
 
-ARG version=2.4.0
+ARG VERSION
 WORKDIR /usr/src/app/
 
 COPY --from=builder /usr/src/app/build/libs/frauddetectionservice-1.0-all.jar ./
-ADD --chmod=644 https://github.com/open-telemetry/opentelemetry-java-instrumentation/releases/download/v$version/opentelemetry-javaagent.jar /app/opentelemetry-javaagent.jar
+ADD --chmod=644 https://github.com/open-telemetry/opentelemetry-java-instrumentation/releases/download/v$VERSION/opentelemetry-javaagent.jar /app/opentelemetry-javaagent.jar
 ENV JAVA_TOOL_OPTIONS=-javaagent:/app/opentelemetry-javaagent.jar
 
 ENTRYPOINT [ "java", "-jar", "frauddetectionservice-1.0-all.jar" ]
diff --git a/src/grafana/provisioning/datasources/opensearch.yaml b/src/grafana/provisioning/datasources/opensearch.yaml
index 4d23b5f7b5..d1c1671762 100644
--- a/src/grafana/provisioning/datasources/opensearch.yaml
+++ b/src/grafana/provisioning/datasources/opensearch.yaml
@@ -17,4 +17,3 @@ datasources:
       logMessageField: body
       pplEnabled: true
       timeField: observedTimestamp
-      version: 2.16.0
diff --git a/src/kafka/Dockerfile b/src/kafka/Dockerfile
index b3e6a236b5..381ec46d47 100644
--- a/src/kafka/Dockerfile
+++ b/src/kafka/Dockerfile
@@ -5,11 +5,11 @@
 FROM apache/kafka:3.7.0
 
 USER root
-ARG version=2.4.0
+ARG VERSION
 
 USER appuser
 
-ADD --chown=appuser:appuser https://github.com/open-telemetry/opentelemetry-java-instrumentation/releases/download/v$version/opentelemetry-javaagent.jar /tmp/opentelemetry-javaagent.jar
+ADD --chown=appuser:appuser https://github.com/open-telemetry/opentelemetry-java-instrumentation/releases/download/v$VERSION/opentelemetry-javaagent.jar /tmp/opentelemetry-javaagent.jar
 
 ENV KAFKA_LISTENERS=PLAINTEXT://0.0.0.0:9092,CONTROLLER://0.0.0.0:9093
 ENV KAFKA_CONTROLLER_QUORUM_VOTERS='1@0.0.0.0:9093'
diff --git a/test/tracetesting/Dockerfile b/test/tracetesting/Dockerfile
index 388269cd48..a76dea5d52 100644
--- a/test/tracetesting/Dockerfile
+++ b/test/tracetesting/Dockerfile
@@ -7,7 +7,7 @@ FROM alpine
 WORKDIR /app
 
 # The build-images workflow action does not set a build-arg so we need to specify a default value here
-ARG TRACETEST_IMAGE_VERSION=v1.5.2
+ARG TRACETEST_IMAGE_VERSION
 
 RUN apk --update add bash jq curl
 RUN curl -L https://raw.githubusercontent.com/kubeshop/tracetest/main/install-cli.sh | bash -s -- $TRACETEST_IMAGE_VERSION