diff --git a/aws-replicator/setup.cfg b/aws-replicator/setup.cfg
index f9a75d8..c738c19 100644
--- a/aws-replicator/setup.cfg
+++ b/aws-replicator/setup.cfg
@@ -18,9 +18,7 @@ install_requires =
     # TODO: currently requires a version pin, see note in auth_proxy.py
     botocore>=1.29.151
     flask
-    localstack
     localstack-client
-    localstack-ext
     xmltodict
     # TODO: refactor the use of http2_server
     hypercorn
@@ -37,6 +35,8 @@ install_requires =
 [options.extras_require]
 test =
     apispec
+    localstack-core
+    localstack-ext
     openapi-spec-validator
     pyproject-flake8
     pytest
diff --git a/diagnosis-viewer/Makefile b/diagnosis-viewer/Makefile
index c86b76f..30feecb 100644
--- a/diagnosis-viewer/Makefile
+++ b/diagnosis-viewer/Makefile
@@ -8,7 +8,6 @@ venv: $(VENV_ACTIVATE)
 $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux wheel
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -18,7 +17,7 @@ clean:
 	rm -rf *.egg-info/
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 dist: venv
 	$(VENV_RUN); python setup.py sdist bdist_wheel
diff --git a/diagnosis-viewer/setup.cfg b/diagnosis-viewer/setup.cfg
index 55a2437..b27ee38 100644
--- a/diagnosis-viewer/setup.cfg
+++ b/diagnosis-viewer/setup.cfg
@@ -13,9 +13,12 @@ long_description_content_type = text/markdown; charset=UTF-8
 zip_safe = False
 packages = find:
 install_requires =
-    localstack>=1.4
     diapretty
 
+[options.extras_require]
+dev =
+    localstack-core>=1.4
+
 [options.entry_points]
 localstack.extensions =
     diagnosis-viewer = diagnosis_viewer.extension:DiagnosisViewerExtension
diff --git a/hello-world/Makefile b/hello-world/Makefile
index 084fa9b..1cc5f9a 100644
--- a/hello-world/Makefile
+++ b/hello-world/Makefile
@@ -9,7 +9,6 @@ $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux wheel
 	$(VENV_RUN); pip install --upgrade black isort pyproject-flake8 flake8-black flake8-isort
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -25,7 +24,7 @@ format:            		  ## Run black and isort code formatter
 	$(VENV_RUN); python -m isort helloworld; python -m black helloworld
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 dist: venv
 	$(VENV_RUN); python setup.py sdist bdist_wheel
diff --git a/hello-world/setup.cfg b/hello-world/setup.cfg
index 2da1782..3e91181 100644
--- a/hello-world/setup.cfg
+++ b/hello-world/setup.cfg
@@ -12,8 +12,10 @@ author_email = thomas@localstack.cloud
 [options]
 zip_safe = False
 packages = find:
-install_requires =
-    localstack>=1.0
+
+[options.extras_require]
+dev =
+    localstack-core>=1.0
 
 [options.entry_points]
 localstack.extensions =
diff --git a/httpbin/Makefile b/httpbin/Makefile
index 480979a..ac6aefe 100644
--- a/httpbin/Makefile
+++ b/httpbin/Makefile
@@ -9,7 +9,6 @@ $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux wheel
 	$(VENV_RUN); pip install --upgrade black isort pyproject-flake8 flake8-black flake8-isort
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -25,7 +24,7 @@ format: venv
 	$(VENV_RUN); python -m isort .; python -m black .
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 dist: venv
 	$(VENV_RUN); python setup.py sdist bdist_wheel
diff --git a/httpbin/setup.cfg b/httpbin/setup.cfg
index f79e303..ba63975 100644
--- a/httpbin/setup.cfg
+++ b/httpbin/setup.cfg
@@ -13,7 +13,6 @@ long_description_content_type = text/markdown; charset=UTF-8
 zip_safe = False
 packages = find:
 install_requires =
-    localstack>=2.2
     # requirements for vendored httpbin
     Flask
     MarkupSafe
@@ -24,6 +23,10 @@ install_requires =
     gevent
     flasgger
 
+[options.extras_require]
+dev =
+    localstack-core>=2.2
+
 [options.entry_points]
 localstack.extensions =
     httpbin = localstack_httpbin.extension:HttpbinExtension
diff --git a/mailhog/Makefile b/mailhog/Makefile
index 5c13051..e636a5f 100644
--- a/mailhog/Makefile
+++ b/mailhog/Makefile
@@ -9,7 +9,6 @@ $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux wheel
 	$(VENV_RUN); pip install --upgrade black isort pyproject-flake8 flake8-black flake8-isort
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -25,7 +24,7 @@ format:            		  ## Run black and isort code formatter
 	$(VENV_RUN); python -m isort mailhog; python -m black mailhog
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 dist: venv
 	$(VENV_RUN); python setup.py sdist bdist_wheel
diff --git a/mailhog/setup.cfg b/mailhog/setup.cfg
index 0a5ee07..0446993 100644
--- a/mailhog/setup.cfg
+++ b/mailhog/setup.cfg
@@ -12,8 +12,10 @@ long_description_content_type = text/markdown; charset=UTF-8
 [options]
 zip_safe = False
 packages = find:
-install_requires =
-    localstack>=2.2
+
+[options.extras_require]
+dev =
+    localstack-core>=2.2
 
 [options.entry_points]
 localstack.extensions =
diff --git a/miniflare/Makefile b/miniflare/Makefile
index 8490197..218eb31 100644
--- a/miniflare/Makefile
+++ b/miniflare/Makefile
@@ -9,7 +9,6 @@ $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux wheel
 	$(VENV_RUN); pip install --upgrade black isort pyproject-flake8 flake8-black flake8-isort
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -25,7 +24,7 @@ format:            		  ## Run black and isort code formatter
 	$(VENV_RUN); python -m isort .; python -m black .
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 dist: venv
 	$(VENV_RUN); python setup.py sdist bdist_wheel
diff --git a/miniflare/setup.cfg b/miniflare/setup.cfg
index c8aaaed..55761e0 100644
--- a/miniflare/setup.cfg
+++ b/miniflare/setup.cfg
@@ -12,8 +12,10 @@ author_email = waldemar@localstack.cloud
 [options]
 zip_safe = False
 packages = find:
-install_requires =
-    localstack>=1.0.0
+
+[options.extras_require]
+dev =
+    localstack-core>=1.0.0
 
 [options.entry_points]
 localstack.extensions =
diff --git a/openai/Makefile b/openai/Makefile
index d63477e..e299dc6 100644
--- a/openai/Makefile
+++ b/openai/Makefile
@@ -9,7 +9,6 @@ $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux wheel
 	$(VENV_RUN); pip install --upgrade black isort pyproject-flake8 flake8-black flake8-isort
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -25,7 +24,7 @@ format:            		  ## Run black and isort code formatter
 	$(VENV_RUN); python -m isort .; python -m black .
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 dist: venv
 	$(VENV_RUN); python setup.py sdist bdist_wheel
diff --git a/openai/setup.cfg b/openai/setup.cfg
index 643dc48..681e4e6 100644
--- a/openai/setup.cfg
+++ b/openai/setup.cfg
@@ -24,7 +24,6 @@ zip_safe = False
 packages = find:
 install_requires =
     faker>=8.12.1
-    localstack>=3.1
     plux>=1.3
     rolo>=0.3
 test_requires =
@@ -33,6 +32,7 @@ test_requires =
 
 [options.extras_require]
 dev =
+    localstack-core>=3.1
     openai>=0.10.2,<1.0
     pytest>=6.2.4
     black==22.3.0
diff --git a/stripe/Makefile b/stripe/Makefile
index 9b7963c..75b92e4 100644
--- a/stripe/Makefile
+++ b/stripe/Makefile
@@ -32,7 +32,7 @@ dist: venv
 	$(VENV_ACTIVATE); python setup.py sdist bdist_wheel
 
 install: venv
-	$(VENV_ACTIVATE); python setup.py install
+	$(VENV_ACTIVATE); python -m pip install -e .[dev]
 
 upload: venv dist
 	$(VENV_ACTIVATE); pip install --upgrade twine; twine upload dist/*
diff --git a/stripe/setup.cfg b/stripe/setup.cfg
index 1480f97..4de70aa 100644
--- a/stripe/setup.cfg
+++ b/stripe/setup.cfg
@@ -29,13 +29,13 @@ setup_requires =
 install_requires =
     stevedore>=3.4
     plux>=1.3
-    localstack>=1.0
     localstack-localstripe>=1.13.8
 test_requires =
     pytest>=6.2.4
 
 [options.extras_require]
 dev =
+    localstack-core>=1.0
     pytest>=6.2.4
     black==22.3.0
     isort==5.10.1
diff --git a/template/{{cookiecutter.project_slug}}/Makefile b/template/{{cookiecutter.project_slug}}/Makefile
index 0f12f48..c3d6a3e 100644
--- a/template/{{cookiecutter.project_slug}}/Makefile
+++ b/template/{{cookiecutter.project_slug}}/Makefile
@@ -8,7 +8,6 @@ venv: $(VENV_ACTIVATE)
 $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -18,7 +17,7 @@ clean:
 	rm -rf *.egg-info/
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 dist: venv
 	$(VENV_RUN); python setup.py sdist bdist_wheel
diff --git a/template/{{cookiecutter.project_slug}}/setup.cfg b/template/{{cookiecutter.project_slug}}/setup.cfg
index 2bb3f02..17145a0 100644
--- a/template/{{cookiecutter.project_slug}}/setup.cfg
+++ b/template/{{cookiecutter.project_slug}}/setup.cfg
@@ -12,8 +12,10 @@ long_description_content_type = text/markdown; charset=UTF-8
 [options]
 zip_safe = False
 packages = find:
-install_requires =
-    localstack>=1.0
+
+[options.extras_require]
+dev =
+    localstack-core>=1.0
 
 [options.entry_points]
 localstack.extensions =
diff --git a/terraform-init/Makefile b/terraform-init/Makefile
index 42739d8..4ade53f 100644
--- a/terraform-init/Makefile
+++ b/terraform-init/Makefile
@@ -9,7 +9,6 @@ $(VENV_ACTIVATE): setup.py setup.cfg
 	test -d .venv || $(VENV_BIN) .venv
 	$(VENV_RUN); pip install --upgrade pip setuptools plux build
 	$(VENV_RUN); pip install --upgrade black isort
-	$(VENV_RUN); pip install -e .
 	touch $(VENV_DIR)/bin/activate
 
 clean:
@@ -19,7 +18,7 @@ clean:
 	rm -rf *.egg-info/
 
 install: venv
-	$(VENV_RUN); python setup.py develop
+	$(VENV_RUN); python -m pip install -e .[dev]
 
 format: venv
 	$(VENV_RUN); python -m isort .; python -m black .
diff --git a/terraform-init/setup.cfg b/terraform-init/setup.cfg
index b17d97f..ccaec5d 100644
--- a/terraform-init/setup.cfg
+++ b/terraform-init/setup.cfg
@@ -13,9 +13,12 @@ long_description_content_type = text/markdown; charset=UTF-8
 zip_safe = False
 packages = find:
 install_requires =
-    localstack-core>=3.4
     plux
 
+[options.extras_require]
+dev =
+    localstack-core>=3.4
+
 [options.entry_points]
 localstack.extensions =
     localstack-terraform-init = localstack_terraform_init.extension:TflocalInitExtension