diff --git a/.github/workflows/publish-images.yml b/.github/workflows/publish-images.yml
index 04e8fb9..b4c15dd 100644
--- a/.github/workflows/publish-images.yml
+++ b/.github/workflows/publish-images.yml
@@ -48,7 +48,7 @@ jobs:
         uses: docker/build-push-action@v5
         with:
           context: ./gateway
-          file: ./gateway/Dockerfile.gateway
+          file: Dockerfile.gateway
           platforms: linux/amd64
           push: true
           tags: ${{ env.tags }}
diff --git a/.python-version b/.python-version
new file mode 100644
index 0000000..e4fba21
--- /dev/null
+++ b/.python-version
@@ -0,0 +1 @@
+3.12
diff --git a/Dockerfile.gateway b/Dockerfile.gateway
new file mode 100644
index 0000000..24e6cbd
--- /dev/null
+++ b/Dockerfile.gateway
@@ -0,0 +1,16 @@
+FROM python:3.12
+
+WORKDIR /srv/gateway
+
+COPY pyproject.toml ./
+
+COPY gateway/ ./
+
+COPY README.md /srv/gateway/README.md
+
+RUN pip install --no-cache-dir .
+
+RUN chmod +x /srv/gateway/run.sh
+
+# Run the application
+CMD ["./run.sh"]
\ No newline at end of file
diff --git a/docker-compose.local.yml b/docker-compose.local.yml
index 60ea5ad..f570640 100644
--- a/docker-compose.local.yml
+++ b/docker-compose.local.yml
@@ -2,8 +2,8 @@ services:
   invariant-gateway:
     container_name: invariant-gateway
     build:
-      context: ./gateway
-      dockerfile: ../gateway/Dockerfile.gateway
+      context: .
+      dockerfile: Dockerfile.gateway
     working_dir: /srv/gateway
     env_file:
       - .env
diff --git a/gateway/Dockerfile.gateway b/gateway/Dockerfile.gateway
deleted file mode 100644
index 431bfba..0000000
--- a/gateway/Dockerfile.gateway
+++ /dev/null
@@ -1,14 +0,0 @@
-FROM python:3.10
-
-COPY ./requirements.txt /srv/gateway/requirements.txt
-WORKDIR /srv/gateway
-
-RUN pip install --no-cache-dir -r requirements.txt
-COPY . /srv/gateway
-
-# Ensure run.sh is executable
-RUN chmod +x /srv/gateway/run.sh
-WORKDIR /srv/gateway
-
-# Run the application
-CMD ["./run.sh"]
\ No newline at end of file
diff --git a/gateway/common/config_manager.py b/gateway/common/config_manager.py
index 951e41b..9499ac8 100644
--- a/gateway/common/config_manager.py
+++ b/gateway/common/config_manager.py
@@ -8,8 +8,7 @@ from typing import Optional
 import fastapi
 from httpx import HTTPStatusError
 
-from common.guardrails import Guardrail, GuardrailAction, GuardrailRuleSet
-from common.authorization import extract_authorization_from_headers
+from gateway.common.guardrails import Guardrail, GuardrailAction, GuardrailRuleSet
 
 
 def extract_policy_from_headers(request: Optional[fastapi.Request]) -> Optional[str]:
@@ -40,7 +39,7 @@ class GatewayConfig:
         Loads the guardrails from the file specified in GUARDRAILS_FILE_PATH.
         Returns the guardrails file content as a string.
         """
-        from integrations.guardrails import _preload
+        from gateway.integrations.guardrails import _preload
 
         guardrails_file = os.getenv("GUARDRAILS_FILE_PATH", "")
         if not guardrails_file:
diff --git a/gateway/common/request_context.py b/gateway/common/request_context.py
index 68cb1d7..945c8b1 100644
--- a/gateway/common/request_context.py
+++ b/gateway/common/request_context.py
@@ -5,9 +5,9 @@ from typing import Any, Dict, Optional
 
 import fastapi
 
-from common.config_manager import GatewayConfig
-from common.guardrails import GuardrailRuleSet, Guardrail, GuardrailAction
-from common.authorization import (
+from gateway.common.config_manager import GatewayConfig
+from gateway.common.guardrails import GuardrailRuleSet, Guardrail, GuardrailAction
+from gateway.common.authorization import (
     extract_guardrail_service_authorization_from_headers,
 )
 
diff --git a/gateway/integrations/explorer.py b/gateway/integrations/explorer.py
index fed63c2..85f820d 100644
--- a/gateway/integrations/explorer.py
+++ b/gateway/integrations/explorer.py
@@ -5,7 +5,7 @@ from typing import Any, Dict, List
 
 from fastapi import HTTPException
 
-from common.guardrails import GuardrailRuleSet, Guardrail, GuardrailAction
+from gateway.common.guardrails import GuardrailRuleSet, Guardrail, GuardrailAction
 from invariant_sdk.async_client import AsyncClient
 from invariant_sdk.types.push_traces import PushTracesRequest, PushTracesResponse
 from invariant_sdk.types.annotations import AnnotationCreate
diff --git a/gateway/integrations/guardrails.py b/gateway/integrations/guardrails.py
index d0f47ac..c84e44d 100644
--- a/gateway/integrations/guardrails.py
+++ b/gateway/integrations/guardrails.py
@@ -8,9 +8,10 @@ from functools import wraps
 
 from fastapi import HTTPException
 import httpx
-from common.guardrails import Guardrail
-from common.request_context import RequestContext
-from common.authorization import (
+
+from gateway.common.guardrails import Guardrail
+from gateway.common.request_context import RequestContext
+from gateway.common.authorization import (
     INVARIANT_GUARDRAIL_SERVICE_AUTHORIZATION_HEADER,
 )
 
diff --git a/gateway/requirements.txt b/gateway/requirements.txt
deleted file mode 100644
index 2aabbbf..0000000
--- a/gateway/requirements.txt
+++ /dev/null
@@ -1,6 +0,0 @@
-fastapi==0.115.7
-httpx==0.28.1
-invariant-ai>=0.2.1
-invariant-sdk>=0.0.10
-starlette-compress==1.4.0
-uvicorn==0.34.0
\ No newline at end of file
diff --git a/gateway/routes/anthropic.py b/gateway/routes/anthropic.py
index 13b5f20..950f15b 100644
--- a/gateway/routes/anthropic.py
+++ b/gateway/routes/anthropic.py
@@ -8,27 +8,27 @@ import httpx
 from fastapi import APIRouter, Depends, Header, HTTPException, Request, Response
 from starlette.responses import StreamingResponse
 
-from common.authorization import extract_authorization_from_headers
-from common.config_manager import (
+from gateway.common.authorization import extract_authorization_from_headers
+from gateway.common.config_manager import (
     GatewayConfig,
     GatewayConfigManager,
     GuardrailsInHeader,
 )
-from common.constants import (
+from gateway.common.constants import (
     CLIENT_TIMEOUT,
     IGNORED_HEADERS,
 )
-from common.guardrails import GuardrailAction, GuardrailRuleSet
-from common.request_context import RequestContext
-from converters.anthropic_to_invariant import (
+from gateway.common.guardrails import GuardrailAction, GuardrailRuleSet
+from gateway.common.request_context import RequestContext
+from gateway.converters.anthropic_to_invariant import (
     convert_anthropic_to_invariant_message_format,
 )
-from integrations.explorer import (
+from gateway.integrations.explorer import (
     create_annotations_from_guardrails_errors,
     fetch_guardrails_from_explorer,
     push_trace,
 )
-from integrations.guardrails import (
+from gateway.integrations.guardrails import (
     ExtraItem,
     InstrumentedResponse,
     InstrumentedStreamingResponse,
diff --git a/gateway/routes/gemini.py b/gateway/routes/gemini.py
index 00101f9..06814c7 100644
--- a/gateway/routes/gemini.py
+++ b/gateway/routes/gemini.py
@@ -8,25 +8,25 @@ import httpx
 from fastapi import APIRouter, Depends, HTTPException, Query, Request, Response
 from fastapi.responses import StreamingResponse
 
-from common.authorization import extract_authorization_from_headers
-from common.config_manager import (
+from gateway.common.authorization import extract_authorization_from_headers
+from gateway.common.config_manager import (
     GatewayConfig,
     GatewayConfigManager,
     GuardrailsInHeader,
 )
-from common.constants import (
+from gateway.common.constants import (
     CLIENT_TIMEOUT,
     IGNORED_HEADERS,
 )
-from common.guardrails import GuardrailAction, GuardrailRuleSet
-from common.request_context import RequestContext
-from converters.gemini_to_invariant import convert_request, convert_response
-from integrations.explorer import (
+from gateway.common.guardrails import GuardrailAction, GuardrailRuleSet
+from gateway.common.request_context import RequestContext
+from gateway.converters.gemini_to_invariant import convert_request, convert_response
+from gateway.integrations.explorer import (
     create_annotations_from_guardrails_errors,
     fetch_guardrails_from_explorer,
     push_trace,
 )
-from integrations.guardrails import (
+from gateway.integrations.guardrails import (
     ExtraItem,
     InstrumentedResponse,
     InstrumentedStreamingResponse,
diff --git a/gateway/routes/open_ai.py b/gateway/routes/open_ai.py
index 5695c03..b849dab 100644
--- a/gateway/routes/open_ai.py
+++ b/gateway/routes/open_ai.py
@@ -8,24 +8,24 @@ import httpx
 from fastapi import APIRouter, Depends, Header, HTTPException, Request, Response
 from fastapi.responses import StreamingResponse
 
-from common.authorization import extract_authorization_from_headers
-from common.config_manager import (
+from gateway.common.authorization import extract_authorization_from_headers
+from gateway.common.config_manager import (
     GatewayConfig,
     GatewayConfigManager,
     GuardrailsInHeader,
 )
-from common.constants import (
+from gateway.common.constants import (
     CLIENT_TIMEOUT,
     IGNORED_HEADERS,
 )
-from common.guardrails import GuardrailAction, GuardrailRuleSet
-from common.request_context import RequestContext
-from integrations.explorer import (
+from gateway.common.guardrails import GuardrailAction, GuardrailRuleSet
+from gateway.common.request_context import RequestContext
+from gateway.integrations.explorer import (
     create_annotations_from_guardrails_errors,
     fetch_guardrails_from_explorer,
     push_trace,
 )
-from integrations.guardrails import (
+from gateway.integrations.guardrails import (
     ExtraItem,
     InstrumentedResponse,
     InstrumentedStreamingResponse,
diff --git a/gateway/run.sh b/gateway/run.sh
index 4cee98c..38fc835 100755
--- a/gateway/run.sh
+++ b/gateway/run.sh
@@ -1,5 +1,7 @@
 #!/bin/bash
 
+export PYTHONPATH=/srv
+
 # Validate configuration
 python validate_config.py
 
diff --git a/gateway/serve.py b/gateway/serve.py
index e3683f9..2568d6c 100644
--- a/gateway/serve.py
+++ b/gateway/serve.py
@@ -2,11 +2,12 @@
 
 import fastapi
 import uvicorn
-from routes.anthropic import gateway as anthropic_gateway
-from routes.gemini import gateway as gemini_gateway
-from routes.open_ai import gateway as open_ai_gateway
 from starlette_compress import CompressMiddleware
 
+from gateway.routes.anthropic import gateway as anthropic_gateway
+from gateway.routes.gemini import gateway as gemini_gateway
+from gateway.routes.open_ai import gateway as open_ai_gateway
+
 app = fastapi.app = fastapi.FastAPI(
     docs_url="/api/v1/gateway/docs",
     redoc_url="/api/v1/gateway/redoc",
diff --git a/gateway/validate_config.py b/gateway/validate_config.py
index 6ad9392..67d77c9 100644
--- a/gateway/validate_config.py
+++ b/gateway/validate_config.py
@@ -2,7 +2,7 @@
 
 import sys
 
-from common.config_manager import GatewayConfigManager
+from gateway.common.config_manager import GatewayConfigManager
 
 try:
     _ = GatewayConfigManager.get_config()
diff --git a/pyproject.toml b/pyproject.toml
new file mode 100644
index 0000000..befa096
--- /dev/null
+++ b/pyproject.toml
@@ -0,0 +1,21 @@
+[project]
+name = "invariant-gateway"
+version = "0.1.0"
+description = "LLM proxy to observe and debug what your AI agents are doing"
+readme = "README.md"
+requires-python = ">=3.12"
+dependencies = [
+    "fastapi==0.115.7",
+    "httpx==0.28.1",
+    "invariant-ai>=0.2.1",
+    "invariant-sdk>=0.0.10",
+    "starlette-compress==1.4.0",
+    "uvicorn==0.34.0"
+]
+
+[tool.setuptools.packages.find]
+where = ["."]
+
+[build-system]
+requires = ["setuptools>=61.0", "wheel"]
+build-backend = "setuptools.build_meta"
\ No newline at end of file
diff --git a/run.sh b/run.sh
index 251f68d..7a7ad47 100755
--- a/run.sh
+++ b/run.sh
@@ -64,13 +64,12 @@ build() {
 down() {
   # Bring down local services
   docker compose -f docker-compose.local.yml down
-  GATEWAY_PATH=$(pwd)/gateway docker compose -f tests/integration/docker-compose.test.yml down
+  GATEWAY_ROOT_PATH=$(pwd) docker compose -f tests/integration/docker-compose.test.yml down
 }
 
 unit_tests() {
   echo "Running unit tests..."
-  
-  pytest tests/unit_tests $@
+  PYTHONPATH=. pytest tests/unit_tests $@
 }
 
 integration_tests() {
@@ -108,7 +107,7 @@ integration_tests() {
     fi
   fi
 
-  export GATEWAY_PATH=$(pwd)/gateway
+  export GATEWAY_ROOT_PATH=$(pwd)
   export GUARDRAILS_FILE_PATH="$TEST_GUARDRAILS_FILE_PATH"
 
   # Start containers
@@ -151,7 +150,7 @@ integration_tests() {
     --env-file ./tests/integration/.env.test \
     invariant-gateway-tests $@
 
-  unset GATEWAY_PATH
+  unset GATEWAY_ROOT_PATH
   unset GUARDRAILS_FILE_PATH
 }
 
diff --git a/tests/integration/docker-compose.test.yml b/tests/integration/docker-compose.test.yml
index 8c1afe3..42cb340 100644
--- a/tests/integration/docker-compose.test.yml
+++ b/tests/integration/docker-compose.test.yml
@@ -24,8 +24,8 @@ services:
   invariant-gateway:
     container_name: invariant-gateway-test
     build:
-      context: ${GATEWAY_PATH}
-      dockerfile: ${GATEWAY_PATH}/Dockerfile.gateway
+      context: ${GATEWAY_ROOT_PATH}
+      dockerfile: ${GATEWAY_ROOT_PATH}/Dockerfile.gateway
     depends_on:
       app-api:
         condition: service_healthy
@@ -38,7 +38,7 @@ services:
       - ${INVARIANT_API_KEY:+INVARIANT_API_KEY=${INVARIANT_API_KEY}}
     volumes:
       - type: bind
-        source: ${GATEWAY_PATH}
+        source: ${GATEWAY_ROOT_PATH}/gateway
         target: /srv/gateway
       - type: bind
         source: ${GUARDRAILS_FILE_PATH:-/dev/null}
diff --git a/tests/integration/guardrails/test_guardrails_anthropic.py b/tests/integration/guardrails/test_guardrails_anthropic.py
index 035a845..14f06e5 100644
--- a/tests/integration/guardrails/test_guardrails_anthropic.py
+++ b/tests/integration/guardrails/test_guardrails_anthropic.py
@@ -457,12 +457,12 @@ async def test_with_guardrails_from_explorer(explorer_api_url, gateway_url, do_s
     assert (
         annotations[0]["content"] == "ogre detected in response"
         and annotations[0]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[0]["extra_metadata"]["guardrail-action"] == "block"
+        and annotations[0]["extra_metadata"]["guardrail"]["action"] == "block"
     )
     assert (
         annotations[1]["content"] == "Fiona detected in response"
         and annotations[1]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[1]["extra_metadata"]["guardrail-action"] == "log"
+        and annotations[1]["extra_metadata"]["guardrail"]["action"] == "log"
     )
 
 
@@ -584,7 +584,7 @@ async def test_preguardrailing_with_guardrails_from_explorer(
     assert (
         annotations[0]["content"] == "pun detected in user message"
         and annotations[0]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[0]["extra_metadata"]["guardrail-action"] == "block"
+        and annotations[0]["extra_metadata"]["guardrail"]["action"] == "block"
         if is_block_action
         else "log"
     )
diff --git a/tests/integration/guardrails/test_guardrails_gemini.py b/tests/integration/guardrails/test_guardrails_gemini.py
index b3ac35e..292d473 100644
--- a/tests/integration/guardrails/test_guardrails_gemini.py
+++ b/tests/integration/guardrails/test_guardrails_gemini.py
@@ -435,12 +435,12 @@ async def test_with_guardrails_from_explorer(explorer_api_url, gateway_url, do_s
     assert (
         annotations[0]["content"] == "ogre detected in response"
         and annotations[0]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[0]["extra_metadata"]["guardrail-action"] == "block"
+        and annotations[0]["extra_metadata"]["guardrail"]["action"] == "block"
     )
     assert (
         annotations[1]["content"] == "Fiona detected in response"
         and annotations[1]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[1]["extra_metadata"]["guardrail-action"] == "log"
+        and annotations[1]["extra_metadata"]["guardrail"]["action"] == "log"
     )
 
 
@@ -550,7 +550,7 @@ async def test_preguardrailing_with_guardrails_from_explorer(
     assert (
         annotations[0]["content"] == "pun detected in user message"
         and annotations[0]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[0]["extra_metadata"]["guardrail-action"] == "block"
+        and annotations[0]["extra_metadata"]["guardrail"]["action"] == "block"
         if is_block_action
         else "log"
     )
diff --git a/tests/integration/guardrails/test_guardrails_open_ai.py b/tests/integration/guardrails/test_guardrails_open_ai.py
index 6031778..a418f25 100644
--- a/tests/integration/guardrails/test_guardrails_open_ai.py
+++ b/tests/integration/guardrails/test_guardrails_open_ai.py
@@ -457,12 +457,12 @@ async def test_with_guardrails_from_explorer(explorer_api_url, gateway_url, do_s
     assert (
         annotations[0]["content"] == "ogre detected in response"
         and annotations[0]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[0]["extra_metadata"]["guardrail-action"] == "block"
+        and annotations[0]["extra_metadata"]["guardrail"]["action"] == "block"
     )
     assert (
         annotations[1]["content"] == "Fiona detected in response"
         and annotations[1]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[1]["extra_metadata"]["guardrail-action"] == "log"
+        and annotations[1]["extra_metadata"]["guardrail"]["action"] == "log"
     )
 
 
@@ -581,7 +581,7 @@ async def test_preguardrailing_with_guardrails_from_explorer(
     assert (
         annotations[0]["content"] == "pun detected in user message"
         and annotations[0]["extra_metadata"]["source"] == "guardrails-error"
-        and annotations[0]["extra_metadata"]["guardrail-action"] == "block"
+        and annotations[0]["extra_metadata"]["guardrail"]["action"] == "block"
         if is_block_action
         else "log"
     )
diff --git a/tests/unit_tests/common/test_authorization.py b/tests/unit_tests/common/test_authorization.py
index 60512aa..2014bc1 100644
--- a/tests/unit_tests/common/test_authorization.py
+++ b/tests/unit_tests/common/test_authorization.py
@@ -7,10 +7,6 @@ import random
 import string
 import pytest
 
-from gateway.common.config_manager import GatewayConfig
-from gateway.common.request_context import RequestContext
-
-
 # Add root folder (parent) to sys.path
 sys.path.append(
     os.path.dirname(
@@ -18,6 +14,8 @@ sys.path.append(
     )
 )
 
+from gateway.common.config_manager import GatewayConfig
+from gateway.common.request_context import RequestContext
 from gateway.common.authorization import (
     INVARIANT_GUARDRAIL_SERVICE_AUTHORIZATION_HEADER,
     extract_authorization_from_headers,