diff --git a/.changeset/thirty-starfishes-smash.md b/.changeset/thirty-starfishes-smash.md
new file mode 100644
index 00000000000..c41a08fdbaf
--- /dev/null
+++ b/.changeset/thirty-starfishes-smash.md
@@ -0,0 +1,6 @@
+---
+'create-amplify': patch
+'@aws-amplify/cli-core': patch
+---
+
+update create-amplify flow to init a tsconfig that forces module context, removes creation of package.json in the amplify directory
diff --git a/packages/cli-core/src/package-manager-controller/package_manager_controller_base.ts b/packages/cli-core/src/package-manager-controller/package_manager_controller_base.ts
index 4d9786b3910..c6fae5f2bae 100644
--- a/packages/cli-core/src/package-manager-controller/package_manager_controller_base.ts
+++ b/packages/cli-core/src/package-manager-controller/package_manager_controller_base.ts
@@ -96,7 +96,8 @@ export abstract class PackageManagerControllerBase
     const tsConfigTemplate = {
       compilerOptions: {
         target: 'es2022',
-        module: 'es2022',
+        module: 'preserve',
+        moduleDetection: 'force',
         moduleResolution: 'bundler',
         resolveJsonModule: true,
         esModuleInterop: true,
diff --git a/packages/create-amplify/src/amplify_project_creator.ts b/packages/create-amplify/src/amplify_project_creator.ts
index 45cfc9d5949..ed998afa391 100644
--- a/packages/create-amplify/src/amplify_project_creator.ts
+++ b/packages/create-amplify/src/amplify_project_creator.ts
@@ -18,7 +18,7 @@ export class AmplifyProjectCreator {
     'aws-cdk@^2',
     'aws-cdk-lib@^2',
     'constructs@^10.0.0',
-    'typescript@^5.0.0',
+    'typescript@^5.4.0',
     'tsx',
     'esbuild',
   ];
diff --git a/packages/create-amplify/src/initial_project_file_generator.test.ts b/packages/create-amplify/src/initial_project_file_generator.test.ts
index 8fcfb9190ac..e6e37b1770b 100644
--- a/packages/create-amplify/src/initial_project_file_generator.test.ts
+++ b/packages/create-amplify/src/initial_project_file_generator.test.ts
@@ -40,14 +40,6 @@ void describe('InitialProjectFileGenerator', () => {
       path.join(process.cwd(), 'testDir', 'amplify'),
       { recursive: true },
     ]);
-    assert.equal(
-      fsMock.writeFile.mock.calls[0].arguments[0],
-      path.join(process.cwd(), 'testDir', 'amplify', 'package.json')
-    );
-    assert.deepStrictEqual(
-      JSON.parse(fsMock.writeFile.mock.calls[0].arguments[1]),
-      { type: 'module' }
-    );
   });
 
   void it('creates default tsconfig file', async () => {
diff --git a/packages/create-amplify/src/initial_project_file_generator.ts b/packages/create-amplify/src/initial_project_file_generator.ts
index 0c782726e56..fcba7b319a2 100644
--- a/packages/create-amplify/src/initial_project_file_generator.ts
+++ b/packages/create-amplify/src/initial_project_file_generator.ts
@@ -29,12 +29,6 @@ export class InitialProjectFileGenerator {
       { recursive: true }
     );
 
-    const packageJsonContent = { type: 'module' };
-    await this.fsp.writeFile(
-      this.path.resolve(targetDir, 'package.json'),
-      JSON.stringify(packageJsonContent, null, 2)
-    );
-
     await this.packageManagerController.initializeTsConfig(targetDir);
   };
 }