diff --git a/Templates/DefaultProject/Template/project.json b/Templates/DefaultProject/Template/project.json
index 7f6b5d3b78..b52b0baf27 100644
--- a/Templates/DefaultProject/Template/project.json
+++ b/Templates/DefaultProject/Template/project.json
@@ -11,5 +11,6 @@
         "${Name}"
     ],
     "icon_path": "preview.png",
-    "engine": "o3de"
+    "engine": "o3de",
+    "external_subdirectories": []
 }
diff --git a/Templates/MinimalProject/Template/project.json b/Templates/MinimalProject/Template/project.json
index 7f6b5d3b78..b52b0baf27 100644
--- a/Templates/MinimalProject/Template/project.json
+++ b/Templates/MinimalProject/Template/project.json
@@ -11,5 +11,6 @@
         "${Name}"
     ],
     "icon_path": "preview.png",
-    "engine": "o3de"
+    "engine": "o3de",
+    "external_subdirectories": []
 }