diff --git a/cmake/ConfigurationTypes.cmake b/cmake/ConfigurationTypes.cmake
new file mode 100644
index 0000000000..fe9c2daa51
--- /dev/null
+++ b/cmake/ConfigurationTypes.cmake
@@ -0,0 +1,14 @@
+#
+# Copyright (c) Contributors to the Open 3D Engine Project.
+# For complete copyright and license terms please see the LICENSE at the root of this distribution.
+#
+# SPDX-License-Identifier: Apache-2.0 OR MIT
+#
+#
+
+include_guard(GLOBAL)
+
+# By default, CMAKE_CONFIGURATION_TYPES = LY_CONFIGURATION_TYPES, but in installed SDKs, this
+# file will be replaced with cmake/install/ConfigurationTypes.cmake and discover configurations
+# that are available from the SDK
+set(CMAKE_CONFIGURATION_TYPES ${LY_CONFIGURATION_TYPES} CACHE STRING "" FORCE)
diff --git a/cmake/Configurations.cmake b/cmake/Configurations.cmake
index 693cc23c7d..51dee2f07b 100644
--- a/cmake/Configurations.cmake
+++ b/cmake/Configurations.cmake
@@ -8,6 +8,17 @@
 
 include_guard(GLOBAL)
 
+# LY_CONFIGURATION_TYPES defines all the configuration types that O3DE supports
+# We dont set CMAKE_CONFIGURATION_TYPES directly because we want to be able to configure which 
+# configuration types are supported in an SDK installation. SDK installations will fill a 
+# CMAKE_CONFIGURATION_TYPES based on the configurations that were generated during the install process.
+# ly_append_configurations_options depends on LY_CONFIGURATION_TYPES being
+# set in order to successfully parse the arguments. Even for non-multi-config
+# generators, it needs to be set.
+set(LY_CONFIGURATION_TYPES "debug;profile;release" CACHE STRING "" FORCE)
+
+include(cmake/ConfigurationTypes.cmake)
+
 #! ly_append_configurations_options: adds options to the different configurations (debug, profile, release, etc)
 #
 # \arg:DEFINES
@@ -43,7 +54,9 @@ function(ly_append_configurations_options)
     )
     foreach(arg IN LISTS multiArgs)
         list(APPEND multiValueArgs ${arg})
-        foreach(conf IN LISTS CMAKE_CONFIGURATION_TYPES)
+        # we parse the parameters based on all configuration types so unknown configurations
+        # are not passed as values to other parameters
+        foreach(conf IN LISTS LY_CONFIGURATION_TYPES)
             string(TOUPPER ${conf} UCONF)
             list(APPEND multiValueArgs ${arg}_${UCONF})
         endforeach()
@@ -96,6 +109,7 @@ function(ly_append_configurations_options)
         set(CMAKE_SHARED_LINKER_FLAGS "${CMAKE_SHARED_LINKER_FLAGS} ${LINK_STR}" PARENT_SCOPE)
     endif()
 
+    # We only iterate for the actual configuration types
     foreach(conf IN LISTS CMAKE_CONFIGURATION_TYPES)
 
         string(TOUPPER ${conf} UCONF)
@@ -143,11 +157,6 @@ endfunction()
 set(CMAKE_CXX_STANDARD 17 CACHE STRING "C++ Standard to target")
 ly_set(CMAKE_CXX_STANDARD_REQUIRED ON)
 
-# ly_append_configurations_options depends on CMAKE_CONFIGURATION_TYPES being
-# set in order to successfully parse the arguments. Even for non-multi-config
-# generators, it needs to be set.
-set(CMAKE_CONFIGURATION_TYPES "debug;profile;release" CACHE STRING "" FORCE)
-
 get_property(_isMultiConfig GLOBAL PROPERTY GENERATOR_IS_MULTI_CONFIG)
 if(NOT _isMultiConfig)
     # No reason set CMAKE_BUILD_TYPE if it's a multiconfig generator.
diff --git a/cmake/Platform/Common/Install_common.cmake b/cmake/Platform/Common/Install_common.cmake
index 9a0fbbd872..86f46a6e0b 100644
--- a/cmake/Platform/Common/Install_common.cmake
+++ b/cmake/Platform/Common/Install_common.cmake
@@ -350,8 +350,26 @@ function(ly_setup_cmake_install)
         DESTINATION .
         COMPONENT ${CMAKE_INSTALL_DEFAULT_COMPONENT_NAME}
         PATTERN "__pycache__" EXCLUDE
-        REGEX "Findo3de.cmake" EXCLUDE
-        REGEX "Platform\/.*\/BuiltInPackages_.*\.cmake" EXCLUDE
+        PATTERN "Findo3de.cmake" EXCLUDE
+        PATTERN "ConfigurationTypes.cmake" EXCLUDE
+        REGEX "3rdParty/Platform\/.*\/BuiltInPackages_.*\.cmake" EXCLUDE
+    )
+    # Connect configuration types
+    install(FILES "${LY_ROOT_FOLDER}/cmake/install/ConfigurationTypes.cmake"
+        DESTINATION cmake
+        COMPONENT ${CMAKE_INSTALL_DEFAULT_COMPONENT_NAME}
+    )
+    # Inject code that will generate each ConfigurationType_<CONFIG>.cmake file
+    set(install_configuration_type_template [=[
+        configure_file(@LY_ROOT_FOLDER@/cmake/install/ConfigurationType_config.cmake.in
+            ${CMAKE_INSTALL_PREFIX}/cmake/ConfigurationTypes_${CMAKE_INSTALL_CONFIG_NAME}.cmake
+            @ONLY
+        )
+        message(STATUS "Generated ${CMAKE_INSTALL_PREFIX}/cmake/ConfigurationTypes_${CMAKE_INSTALL_CONFIG_NAME}.cmake")
+    ]=])
+    string(CONFIGURE "${install_configuration_type_template}" install_configuration_type @ONLY)
+    install(CODE "${install_configuration_type}"
+        COMPONENT ${CMAKE_INSTALL_DEFAULT_COMPONENT_NAME}
     )
 
     # Transform the LY_EXTERNAL_SUBDIRS list into a json array
diff --git a/cmake/install/ConfigurationType_config.cmake.in b/cmake/install/ConfigurationType_config.cmake.in
new file mode 100644
index 0000000000..074e034899
--- /dev/null
+++ b/cmake/install/ConfigurationType_config.cmake.in
@@ -0,0 +1,11 @@
+#
+# Copyright (c) Contributors to the Open 3D Engine Project.
+# For complete copyright and license terms please see the LICENSE at the root of this distribution.
+#
+# SPDX-License-Identifier: Apache-2.0 OR MIT
+#
+#
+
+include_guard(GLOBAL)
+
+list(APPEND CMAKE_CONFIGURATION_TYPES @CMAKE_INSTALL_CONFIG_NAME@)
diff --git a/cmake/install/ConfigurationTypes.cmake b/cmake/install/ConfigurationTypes.cmake
new file mode 100644
index 0000000000..709f3e71ab
--- /dev/null
+++ b/cmake/install/ConfigurationTypes.cmake
@@ -0,0 +1,22 @@
+#
+# Copyright (c) Contributors to the Open 3D Engine Project.
+# For complete copyright and license terms please see the LICENSE at the root of this distribution.
+#
+# SPDX-License-Identifier: Apache-2.0 OR MIT
+#
+#
+
+include_guard(GLOBAL)
+
+
+# In SDK builds CMAKE_CONFIGURATION_TYPES will be filled by entries generated per configuration build.
+# At install time we generate `cmake/ConfigurationTypes_<config>.cmake` files that append the configuration
+# to CMAKE_CONFIGURATION_TYPES
+set(CMAKE_CONFIGURATION_TYPES "" CACHE STRING "" FORCE)
+
+# For the SDK case, we want to only define the confiuguration types that have been added to the SDK
+file(GLOB configuration_type_files "cmake/ConfigurationTypes_*.cmake")
+foreach(configuration_type_file ${configuration_type_files})
+    include(${configuration_type_file})
+endforeach()
+ly_set(CMAKE_CONFIGURATION_TYPES ${CMAKE_CONFIGURATION_TYPES}) # propagate to parent
\ No newline at end of file