diff --git a/cookiecutter.json b/cookiecutter.json
index 8adb8b4..8624a6e 100644
--- a/cookiecutter.json
+++ b/cookiecutter.json
@@ -5,6 +5,7 @@
     "project_name": "example-project",
     "project_slug": "{{cookiecutter.project_name|lower|replace('-', '_')}}",
     "project_description": "This is a template repository for Python projects that use Poetry for their dependency management.",
+    "src_layout": ["y", "n"],
     "include_github_actions": ["y", "n"],
     "publish_to": ["pypi", "artifactory", "none"],
     "typechecking": ["mypy", "pyright"],
diff --git a/docs/prompt_arguments.md b/docs/prompt_arguments.md
index 129fd43..047517f 100644
--- a/docs/prompt_arguments.md
+++ b/docs/prompt_arguments.md
@@ -35,6 +35,9 @@ from <project_slug> import foo
 
 A short description of your project.
 
+**src_layout**
+`"y"` or `"n"`. Adds [src_layout](https://packaging.python.org/en/latest/discussions/src-layout-vs-flat-layout/) structure to the project
+
 **include_github_actions**
 
 `"y"` or `"n"`. Adds a `.github` directory with various actions and
diff --git a/hooks/post_gen_project.py b/hooks/post_gen_project.py
index 0fef2aa..9f939ff 100644
--- a/hooks/post_gen_project.py
+++ b/hooks/post_gen_project.py
@@ -3,6 +3,7 @@
 
 import os
 import shutil
+from pathlib import Path
 
 PROJECT_DIRECTORY = os.path.realpath(os.path.curdir)
 
@@ -15,6 +16,14 @@ def remove_dir(filepath: str) -> None:
     shutil.rmtree(os.path.join(PROJECT_DIRECTORY, filepath))
 
 
+def move_to_src_layout() -> None:
+    package_dir = "{{cookiecutter.project_slug}}"
+    src_dir = Path(PROJECT_DIRECTORY) / package_dir
+    tgt_dir = Path(PROJECT_DIRECTORY) / "src"
+    tgt_dir.mkdir(parents=True, exist_ok=True)
+    src_dir.rename(tgt_dir / src_dir.name)
+
+
 if __name__ == "__main__":
     if "{{cookiecutter.include_github_actions}}" != "y":
         remove_dir(".github")
@@ -36,3 +45,5 @@ def remove_dir(filepath: str) -> None:
 
     if "{{cookiecutter.devcontainer}}" != "y":
         remove_dir(".devcontainer")
+    if "{{cookiecutter.src_layout}}" == "y":
+        move_to_src_layout()
diff --git a/{{cookiecutter.project_name}}/pyproject.toml b/{{cookiecutter.project_name}}/pyproject.toml
index 7283173..cfa3d28 100644
--- a/{{cookiecutter.project_name}}/pyproject.toml
+++ b/{{cookiecutter.project_name}}/pyproject.toml
@@ -6,9 +6,11 @@ authors = ["{{cookiecutter.author}} <{{cookiecutter.email}}>"]
 repository = "https://github.com/{{cookiecutter.author_github_handle}}/{{cookiecutter.project_name}}"
 documentation = "https://{{cookiecutter.author_github_handle}}.github.io/{{cookiecutter.project_name}}/"
 readme = "README.md"
-packages = [
-  {include = "{{cookiecutter.project_slug}}"}
-]
+{% if cookiecutter.src_layout == 'y' -%}
+packages = [{include = "{{cookiecutter.project_slug}}", from = "src"}]
+{% else %}
+packages = [{include = "{{cookiecutter.project_slug}}"}]
+{% endif %}
 
 [tool.poetry.dependencies]
 python = ">=3.8,<4.0"