diff --git a/eng/common/testproxy/override-proxy-version.ps1 b/eng/common/testproxy/override-proxy-version.ps1
new file mode 100644
index 00000000000..d1e6ff5bfa3
--- /dev/null
+++ b/eng/common/testproxy/override-proxy-version.ps1
@@ -0,0 +1,25 @@
+<#
+.SYNOPSIS
+Replaces target test-proxy version present in target_version.txt.
+
+.PARAMETER TargetVersion
+The replacement version. Used in its entirety, so don't exclude parts of the version definition.
+#>
+[cmdletbinding(SupportsShouldProcess=$True)]
+param(
+   [Parameter(mandatory=$true)] [string] $TargetVersion
+)
+
+$versionFile = Join-Path $PSScriptRoot "target_version.txt"
+$existingVersionText = Get-Content -Raw -Path $versionFile
+$existingVersion = $existingVersionText.Trim()
+
+if ($PSCmdLet.ShouldProcess($versionFile)){
+   Write-Host "Replacing version `"$existingVersion`" with version `"$TargetVersion`" in $versionFile."
+   Set-Content -Path $versionFile -Value "$TargetVersion`n"   
+}
+else {
+   Write-Host "Would replace version `"$existingVersion`" with version `"$TargetVersion`" in $versionFile."
+}
+
+
diff --git a/eng/common/testproxy/test-proxy-docker.yml b/eng/common/testproxy/test-proxy-docker.yml
index 71a03d1be3b..6e749801f4d 100644
--- a/eng/common/testproxy/test-proxy-docker.yml
+++ b/eng/common/testproxy/test-proxy-docker.yml
@@ -10,6 +10,15 @@ steps:
     displayName: 'Language Specific Certificate Trust'
     condition: and(succeeded(), ${{ parameters.condition }})
 
+  - task: PowerShell@2
+    displayName: 'Override proxy version if necessary'
+    condition: and(succeeded(), ${{ parameters.condition }}, ne('${{ parameters.targetVersion }}', ''))
+    inputs:
+      targetType: filePath
+      filePath: '${{ parameters.templateRoot }}/eng/common/testproxy/override-proxy-version.ps1'
+      arguments: '-TargetVersion "${{ parameters.targetVersion }}"'
+      pwsh: true
+
   - pwsh: |
       docker info
     displayName: 'Dump active docker information'
diff --git a/eng/common/testproxy/test-proxy-tool.yml b/eng/common/testproxy/test-proxy-tool.yml
index ae9d6905153..bffc68309c0 100644
--- a/eng/common/testproxy/test-proxy-tool.yml
+++ b/eng/common/testproxy/test-proxy-tool.yml
@@ -11,14 +11,17 @@ steps:
     displayName: 'Language Specific Certificate Trust'
     condition: and(succeeded(), ${{ parameters.condition }})
 
+  - task: PowerShell@2
+    displayName: 'Override proxy version if necessary'
+    condition: and(succeeded(), ${{ parameters.condition }}, ne('${{ parameters.targetVersion }}', ''))
+    inputs:
+      targetType: filePath
+      filePath: '${{ parameters.templateRoot }}/eng/common/testproxy/override-proxy-version.ps1'
+      arguments: '-TargetVersion "${{ parameters.targetVersion }}"'
+      pwsh: true
+
   - pwsh: |
       $version = $(Get-Content "${{ parameters.templateRoot }}/eng/common/testproxy/target_version.txt" -Raw).Trim()
-      $overrideVersion = "${{ parameters.targetVersion }}"
-
-      if($overrideVersion) {
-        Write-Host "Overriding default target proxy version of '$version' with override $overrideVersion."
-        $version = $overrideVersion
-      }
 
       dotnet tool install azure.sdk.tools.testproxy `
         --tool-path $(Build.BinariesDirectory)/test-proxy `