diff --git a/.git_archival.txt b/.git_archival.txt
new file mode 100644
index 0000000000..8fb235d704
--- /dev/null
+++ b/.git_archival.txt
@@ -0,0 +1,4 @@
+node: $Format:%H$
+node-date: $Format:%cI$
+describe-name: $Format:%(describe:tags=true,match=*[0-9]*)$
+ref-names: $Format:%D$
diff --git a/.gitattributes b/.gitattributes
index b6115e6e49..57eb8a8807 100644
--- a/.gitattributes
+++ b/.gitattributes
@@ -1,2 +1,3 @@
 *.py linguist-language=python
 *.ipynb linguist-documentation
+.git_archival.txt export-subst
diff --git a/.gitignore b/.gitignore
index 7de405d8a0..53b6cd356d 100644
--- a/.gitignore
+++ b/.gitignore
@@ -62,8 +62,8 @@ target/
 # Jupyter
 .ipynb_checkpoints/
 
-# setuptools-scm
-zarr/version.py
+# VCS versioning
+src/zarr/_version.py
 
 # emacs
 *~
diff --git a/.pre-commit-config.yaml b/.pre-commit-config.yaml
index a8ee599137..10aff8b4c6 100644
--- a/.pre-commit-config.yaml
+++ b/.pre-commit-config.yaml
@@ -30,7 +30,7 @@ repos:
     rev: v1.7.1
     hooks:
       - id: mypy
-        files: zarr
+        files: src
         args: []
         additional_dependencies:
           - types-redis
diff --git a/docs/contributing.rst b/docs/contributing.rst
index 91606b7276..a65b3d104d 100644
--- a/docs/contributing.rst
+++ b/docs/contributing.rst
@@ -335,7 +335,7 @@ of the storage specification that is currently implemented is stored under the
 
 Note that the Zarr test suite includes a data fixture and tests to try and ensure that
 data format compatibility is not accidentally broken. See the
-:func:`test_format_compatibility` function in the :mod:`zarr.tests.test_storage` module
+:func:`test_format_compatibility` function in the :mod:`tests.test_storage` module
 for details.
 
 When to make a release
diff --git a/pyproject.toml b/pyproject.toml
index 4cd3b05b65..4b3b07f23b 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,6 +1,6 @@
 [build-system]
-requires = ["setuptools>=64.0.0", "setuptools-scm>1.5.4"]
-build-backend = "setuptools.build_meta"
+requires = ["hatchling", "hatch-vcs"]
+build-backend = "hatchling.build"
 
 
 [project]
@@ -34,7 +34,7 @@ classifiers = [
     'Programming Language :: Python :: 3.11',
     'Programming Language :: Python :: 3.12',
 ]
-license = { text = "MIT" }
+license = "MIT"
 
 [project.optional-dependencies]
 jupyter = [
@@ -68,18 +68,13 @@ exclude_lines = [
 
 [tool.coverage.run]
 omit = [
-    "zarr/meta_v1.py",
+    "src/zarr/meta_v1.py",
     "bench/compress_normal.py",
 ]
 
-[tool.setuptools]
-packages = ["zarr", "zarr._storage", "zarr.tests"]
-license-files = ["LICENSE.txt"]
-
-[tool.setuptools_scm]
-version_scheme = "guess-next-dev"
-local_scheme = "dirty-tag"
-write_to = "zarr/version.py"
+[tool.hatch]
+version.source = "vcs"
+build.hooks.vcs.version-file = "src/zarr/_version.py"
 
 [tool.ruff]
 line-length = 100
diff --git a/zarr/__init__.py b/src/zarr/__init__.py
similarity index 96%
rename from zarr/__init__.py
rename to src/zarr/__init__.py
index 6cecb40af8..b3c1e05b7e 100644
--- a/zarr/__init__.py
+++ b/src/zarr/__init__.py
@@ -49,7 +49,7 @@
     ZipStore,
 )
 from zarr.sync import ProcessSynchronizer, ThreadSynchronizer
-from zarr.version import version as __version__
+from zarr._version import version as __version__
 
 # in case setuptools scm screw up and find version to be 0.0.0
 assert not __version__.startswith("0.0.0")
diff --git a/zarr/_storage/__init__.py b/src/zarr/_storage/__init__.py
similarity index 100%
rename from zarr/_storage/__init__.py
rename to src/zarr/_storage/__init__.py
diff --git a/zarr/_storage/absstore.py b/src/zarr/_storage/absstore.py
similarity index 100%
rename from zarr/_storage/absstore.py
rename to src/zarr/_storage/absstore.py
diff --git a/zarr/_storage/store.py b/src/zarr/_storage/store.py
similarity index 100%
rename from zarr/_storage/store.py
rename to src/zarr/_storage/store.py
diff --git a/zarr/_storage/v3.py b/src/zarr/_storage/v3.py
similarity index 99%
rename from zarr/_storage/v3.py
rename to src/zarr/_storage/v3.py
index 00dc085dac..8ab54984b7 100644
--- a/zarr/_storage/v3.py
+++ b/src/zarr/_storage/v3.py
@@ -163,7 +163,7 @@ def setitems(self, values):
         values = {self._normalize_key(key): val for key, val in values.items()}
 
         # initialize the /data/root/... folder corresponding to the array!
-        # Note: zarr.tests.test_core_v3.TestArrayWithFSStoreV3PartialRead fails
+        # Note: tests.test_core_v3.TestArrayWithFSStoreV3PartialRead fails
         # without this explicit creation of directories
         subdirectories = set(os.path.dirname(v) for v in values.keys())
         for subdirectory in subdirectories:
diff --git a/zarr/_storage/v3_storage_transformers.py b/src/zarr/_storage/v3_storage_transformers.py
similarity index 100%
rename from zarr/_storage/v3_storage_transformers.py
rename to src/zarr/_storage/v3_storage_transformers.py
diff --git a/zarr/attrs.py b/src/zarr/attrs.py
similarity index 100%
rename from zarr/attrs.py
rename to src/zarr/attrs.py
diff --git a/zarr/codecs.py b/src/zarr/codecs.py
similarity index 100%
rename from zarr/codecs.py
rename to src/zarr/codecs.py
diff --git a/zarr/context.py b/src/zarr/context.py
similarity index 100%
rename from zarr/context.py
rename to src/zarr/context.py
diff --git a/zarr/convenience.py b/src/zarr/convenience.py
similarity index 100%
rename from zarr/convenience.py
rename to src/zarr/convenience.py
diff --git a/zarr/core.py b/src/zarr/core.py
similarity index 100%
rename from zarr/core.py
rename to src/zarr/core.py
diff --git a/zarr/creation.py b/src/zarr/creation.py
similarity index 100%
rename from zarr/creation.py
rename to src/zarr/creation.py
diff --git a/zarr/errors.py b/src/zarr/errors.py
similarity index 100%
rename from zarr/errors.py
rename to src/zarr/errors.py
diff --git a/zarr/hierarchy.py b/src/zarr/hierarchy.py
similarity index 100%
rename from zarr/hierarchy.py
rename to src/zarr/hierarchy.py
diff --git a/zarr/indexing.py b/src/zarr/indexing.py
similarity index 100%
rename from zarr/indexing.py
rename to src/zarr/indexing.py
diff --git a/zarr/meta.py b/src/zarr/meta.py
similarity index 100%
rename from zarr/meta.py
rename to src/zarr/meta.py
diff --git a/zarr/meta_v1.py b/src/zarr/meta_v1.py
similarity index 100%
rename from zarr/meta_v1.py
rename to src/zarr/meta_v1.py
diff --git a/zarr/n5.py b/src/zarr/n5.py
similarity index 100%
rename from zarr/n5.py
rename to src/zarr/n5.py
diff --git a/zarr/storage.py b/src/zarr/storage.py
similarity index 100%
rename from zarr/storage.py
rename to src/zarr/storage.py
diff --git a/zarr/sync.py b/src/zarr/sync.py
similarity index 100%
rename from zarr/sync.py
rename to src/zarr/sync.py
diff --git a/zarr/util.py b/src/zarr/util.py
similarity index 100%
rename from zarr/util.py
rename to src/zarr/util.py
diff --git a/zarr/v3/__init__.py b/src/zarr/v3/__init__.py
similarity index 100%
rename from zarr/v3/__init__.py
rename to src/zarr/v3/__init__.py
diff --git a/zarr/tests/__init__.py b/src/zarr/v3/abc/__init__.py
similarity index 100%
rename from zarr/tests/__init__.py
rename to src/zarr/v3/abc/__init__.py
diff --git a/zarr/v3/abc/array.py b/src/zarr/v3/abc/array.py
similarity index 100%
rename from zarr/v3/abc/array.py
rename to src/zarr/v3/abc/array.py
diff --git a/zarr/v3/abc/codec.py b/src/zarr/v3/abc/codec.py
similarity index 100%
rename from zarr/v3/abc/codec.py
rename to src/zarr/v3/abc/codec.py
diff --git a/zarr/v3/abc/group.py b/src/zarr/v3/abc/group.py
similarity index 100%
rename from zarr/v3/abc/group.py
rename to src/zarr/v3/abc/group.py
diff --git a/zarr/v3/abc/store.py b/src/zarr/v3/abc/store.py
similarity index 100%
rename from zarr/v3/abc/store.py
rename to src/zarr/v3/abc/store.py
diff --git a/zarr/v3/array.py b/src/zarr/v3/array.py
similarity index 100%
rename from zarr/v3/array.py
rename to src/zarr/v3/array.py
diff --git a/zarr/v3/array_v2.py b/src/zarr/v3/array_v2.py
similarity index 100%
rename from zarr/v3/array_v2.py
rename to src/zarr/v3/array_v2.py
diff --git a/zarr/v3/codecs/__init__.py b/src/zarr/v3/codecs/__init__.py
similarity index 100%
rename from zarr/v3/codecs/__init__.py
rename to src/zarr/v3/codecs/__init__.py
diff --git a/zarr/v3/codecs/blosc.py b/src/zarr/v3/codecs/blosc.py
similarity index 100%
rename from zarr/v3/codecs/blosc.py
rename to src/zarr/v3/codecs/blosc.py
diff --git a/zarr/v3/codecs/bytes.py b/src/zarr/v3/codecs/bytes.py
similarity index 100%
rename from zarr/v3/codecs/bytes.py
rename to src/zarr/v3/codecs/bytes.py
diff --git a/zarr/v3/codecs/crc32c_.py b/src/zarr/v3/codecs/crc32c_.py
similarity index 100%
rename from zarr/v3/codecs/crc32c_.py
rename to src/zarr/v3/codecs/crc32c_.py
diff --git a/zarr/v3/codecs/gzip.py b/src/zarr/v3/codecs/gzip.py
similarity index 100%
rename from zarr/v3/codecs/gzip.py
rename to src/zarr/v3/codecs/gzip.py
diff --git a/zarr/v3/codecs/registry.py b/src/zarr/v3/codecs/registry.py
similarity index 100%
rename from zarr/v3/codecs/registry.py
rename to src/zarr/v3/codecs/registry.py
diff --git a/zarr/v3/codecs/sharding.py b/src/zarr/v3/codecs/sharding.py
similarity index 100%
rename from zarr/v3/codecs/sharding.py
rename to src/zarr/v3/codecs/sharding.py
diff --git a/zarr/v3/codecs/transpose.py b/src/zarr/v3/codecs/transpose.py
similarity index 100%
rename from zarr/v3/codecs/transpose.py
rename to src/zarr/v3/codecs/transpose.py
diff --git a/zarr/v3/codecs/zstd.py b/src/zarr/v3/codecs/zstd.py
similarity index 100%
rename from zarr/v3/codecs/zstd.py
rename to src/zarr/v3/codecs/zstd.py
diff --git a/zarr/v3/common.py b/src/zarr/v3/common.py
similarity index 100%
rename from zarr/v3/common.py
rename to src/zarr/v3/common.py
diff --git a/zarr/v3/group.py b/src/zarr/v3/group.py
similarity index 100%
rename from zarr/v3/group.py
rename to src/zarr/v3/group.py
diff --git a/zarr/v3/group_v2.py b/src/zarr/v3/group_v2.py
similarity index 100%
rename from zarr/v3/group_v2.py
rename to src/zarr/v3/group_v2.py
diff --git a/zarr/v3/indexing.py b/src/zarr/v3/indexing.py
similarity index 100%
rename from zarr/v3/indexing.py
rename to src/zarr/v3/indexing.py
diff --git a/zarr/v3/metadata.py b/src/zarr/v3/metadata.py
similarity index 100%
rename from zarr/v3/metadata.py
rename to src/zarr/v3/metadata.py
diff --git a/zarr/v3/store.py b/src/zarr/v3/store.py
similarity index 100%
rename from zarr/v3/store.py
rename to src/zarr/v3/store.py
diff --git a/zarr/v3/sync.py b/src/zarr/v3/sync.py
similarity index 100%
rename from zarr/v3/sync.py
rename to src/zarr/v3/sync.py
diff --git a/zarr/v3/abc/__init__.py b/tests/__init__.py
similarity index 100%
rename from zarr/v3/abc/__init__.py
rename to tests/__init__.py
diff --git a/zarr/tests/conftest.py b/tests/conftest.py
similarity index 100%
rename from zarr/tests/conftest.py
rename to tests/conftest.py
diff --git a/zarr/tests/data/store.zip b/tests/data/store.zip
similarity index 100%
rename from zarr/tests/data/store.zip
rename to tests/data/store.zip
diff --git a/zarr/tests/data/store/foo b/tests/data/store/foo
similarity index 100%
rename from zarr/tests/data/store/foo
rename to tests/data/store/foo
diff --git a/zarr/tests/test_attrs.py b/tests/test_attrs.py
similarity index 100%
rename from zarr/tests/test_attrs.py
rename to tests/test_attrs.py
diff --git a/zarr/tests/test_codecs_v3.py b/tests/test_codecs_v3.py
similarity index 100%
rename from zarr/tests/test_codecs_v3.py
rename to tests/test_codecs_v3.py
diff --git a/zarr/tests/test_convenience.py b/tests/test_convenience.py
similarity index 100%
rename from zarr/tests/test_convenience.py
rename to tests/test_convenience.py
diff --git a/zarr/tests/test_core.py b/tests/test_core.py
similarity index 99%
rename from zarr/tests/test_core.py
rename to tests/test_core.py
index c5a43ed39d..87bf72e9b0 100644
--- a/zarr/tests/test_core.py
+++ b/tests/test_core.py
@@ -35,7 +35,7 @@
     BaseStore,
     v3_api_available,
 )
-from .._storage.v3_storage_transformers import (
+from zarr._storage.v3_storage_transformers import (
     DummyStorageTransfomer,
     ShardingStorageTransformer,
     v3_sharding_available,
diff --git a/zarr/tests/test_creation.py b/tests/test_creation.py
similarity index 100%
rename from zarr/tests/test_creation.py
rename to tests/test_creation.py
diff --git a/zarr/tests/test_dim_separator.py b/tests/test_dim_separator.py
similarity index 100%
rename from zarr/tests/test_dim_separator.py
rename to tests/test_dim_separator.py
diff --git a/zarr/tests/test_filters.py b/tests/test_filters.py
similarity index 100%
rename from zarr/tests/test_filters.py
rename to tests/test_filters.py
diff --git a/zarr/tests/test_hierarchy.py b/tests/test_hierarchy.py
similarity index 100%
rename from zarr/tests/test_hierarchy.py
rename to tests/test_hierarchy.py
diff --git a/zarr/tests/test_indexing.py b/tests/test_indexing.py
similarity index 100%
rename from zarr/tests/test_indexing.py
rename to tests/test_indexing.py
diff --git a/zarr/tests/test_info.py b/tests/test_info.py
similarity index 100%
rename from zarr/tests/test_info.py
rename to tests/test_info.py
diff --git a/zarr/tests/test_meta.py b/tests/test_meta.py
similarity index 100%
rename from zarr/tests/test_meta.py
rename to tests/test_meta.py
diff --git a/zarr/tests/test_meta_array.py b/tests/test_meta_array.py
similarity index 100%
rename from zarr/tests/test_meta_array.py
rename to tests/test_meta_array.py
diff --git a/zarr/tests/test_n5.py b/tests/test_n5.py
similarity index 100%
rename from zarr/tests/test_n5.py
rename to tests/test_n5.py
diff --git a/zarr/tests/test_storage.py b/tests/test_storage.py
similarity index 100%
rename from zarr/tests/test_storage.py
rename to tests/test_storage.py
diff --git a/zarr/tests/test_storage_v3.py b/tests/test_storage_v3.py
similarity index 100%
rename from zarr/tests/test_storage_v3.py
rename to tests/test_storage_v3.py
diff --git a/zarr/tests/test_sync.py b/tests/test_sync.py
similarity index 100%
rename from zarr/tests/test_sync.py
rename to tests/test_sync.py
diff --git a/zarr/tests/test_util.py b/tests/test_util.py
similarity index 100%
rename from zarr/tests/test_util.py
rename to tests/test_util.py
diff --git a/zarr/tests/util.py b/tests/util.py
similarity index 100%
rename from zarr/tests/util.py
rename to tests/util.py