diff --git a/pkg/bundler/template_bundler.go b/pkg/bundler/template_bundler.go
new file mode 100644
index 000000000..63de967d3
--- /dev/null
+++ b/pkg/bundler/template_bundler.go
@@ -0,0 +1,74 @@
+package bundler
+
+import (
+	"fmt"
+	"os"
+	"path/filepath"
+)
+
+// The TemplateBundler handles bundling of jsonnet templates and related template files.
+// It copies template files from the contexts/_template directory to the artifact build
+// directory. The TemplateBundler ensures that all template dependencies are properly
+// bundled for distribution with the artifact.
+
+// =============================================================================
+// Types
+// =============================================================================
+
+// TemplateBundler handles bundling of template files
+type TemplateBundler struct {
+	BaseBundler
+}
+
+// =============================================================================
+// Constructor
+// =============================================================================
+
+// NewTemplateBundler creates a new TemplateBundler instance
+func NewTemplateBundler() *TemplateBundler {
+	return &TemplateBundler{
+		BaseBundler: *NewBaseBundler(),
+	}
+}
+
+// =============================================================================
+// Public Methods
+// =============================================================================
+
+// Bundle adds template files from contexts/_template directory to the artifact by recursively walking the directory tree.
+// It validates that the templates directory exists, then walks through all files preserving the directory structure.
+// Each file is read and added to the artifact with the path prefix "_template/" to maintain organization.
+// Directories are skipped and only regular files are processed for bundling.
+func (t *TemplateBundler) Bundle(artifact Artifact) error {
+	templatesSource := filepath.Join("contexts", "_template")
+
+	if _, err := t.shims.Stat(templatesSource); os.IsNotExist(err) {
+		return fmt.Errorf("templates directory not found: %s", templatesSource)
+	}
+
+	return t.shims.Walk(templatesSource, func(path string, info os.FileInfo, err error) error {
+		if err != nil {
+			return err
+		}
+
+		if info.IsDir() {
+			return nil
+		}
+
+		relPath, err := t.shims.FilepathRel(templatesSource, path)
+		if err != nil {
+			return fmt.Errorf("failed to get relative path: %w", err)
+		}
+
+		data, err := t.shims.ReadFile(path)
+		if err != nil {
+			return fmt.Errorf("failed to read template file %s: %w", path, err)
+		}
+
+		artifactPath := "_template/" + filepath.ToSlash(relPath)
+		return artifact.AddFile(artifactPath, data)
+	})
+}
+
+// Ensure TemplateBundler implements Bundler interface
+var _ Bundler = (*TemplateBundler)(nil)
diff --git a/pkg/bundler/template_bundler_test.go b/pkg/bundler/template_bundler_test.go
new file mode 100644
index 000000000..af665053e
--- /dev/null
+++ b/pkg/bundler/template_bundler_test.go
@@ -0,0 +1,327 @@
+package bundler
+
+import (
+	"fmt"
+	"os"
+	"path/filepath"
+	"testing"
+)
+
+// =============================================================================
+// Test TemplateBundler
+// =============================================================================
+
+func TestTemplateBundler_NewTemplateBundler(t *testing.T) {
+	setup := func(t *testing.T) *TemplateBundler {
+		t.Helper()
+		return NewTemplateBundler()
+	}
+
+	t.Run("CreatesInstanceWithBaseBundler", func(t *testing.T) {
+		// Given no preconditions
+		// When creating a new template bundler
+		bundler := setup(t)
+
+		// Then it should not be nil
+		if bundler == nil {
+			t.Fatal("Expected non-nil bundler")
+		}
+		// And it should have inherited BaseBundler properties
+		if bundler.shims == nil {
+			t.Error("Expected shims to be inherited from BaseBundler")
+		}
+		// And other fields should be nil until Initialize
+		if bundler.shell != nil {
+			t.Error("Expected shell to be nil before Initialize")
+		}
+		if bundler.injector != nil {
+			t.Error("Expected injector to be nil before Initialize")
+		}
+	})
+}
+
+func TestTemplateBundler_Bundle(t *testing.T) {
+	setup := func(t *testing.T) (*TemplateBundler, *BundlerMocks) {
+		t.Helper()
+		mocks := setupBundlerMocks(t)
+		bundler := NewTemplateBundler()
+		bundler.shims = mocks.Shims
+		bundler.Initialize(mocks.Injector)
+		return bundler, mocks
+	}
+
+	t.Run("SuccessWithValidTemplateFiles", func(t *testing.T) {
+		// Given a template bundler with valid template files
+		bundler, mocks := setup(t)
+
+		// Set up mocks to simulate finding template files
+		filesAdded := make(map[string][]byte)
+		mocks.Artifact.AddFileFunc = func(path string, content []byte) error {
+			filesAdded[path] = content
+			return nil
+		}
+
+		bundler.shims.Walk = func(root string, fn filepath.WalkFunc) error {
+			// Simulate finding multiple files in templates directory
+			// Use filepath.Join to ensure cross-platform compatibility
+			templatesDir := filepath.Join("contexts", "_template")
+			fn(filepath.Join(templatesDir, "metadata.yaml"), &mockFileInfo{name: "metadata.yaml", isDir: false}, nil)
+			fn(filepath.Join(templatesDir, "template.jsonnet"), &mockFileInfo{name: "template.jsonnet", isDir: false}, nil)
+			fn(filepath.Join(templatesDir, "subdir"), &mockFileInfo{name: "subdir", isDir: true}, nil)
+			fn(filepath.Join(templatesDir, "subdir", "nested.yaml"), &mockFileInfo{name: "nested.yaml", isDir: false}, nil)
+			return nil
+		}
+
+		bundler.shims.FilepathRel = func(basepath, targpath string) (string, error) {
+			templatesDir := filepath.Join("contexts", "_template")
+			switch targpath {
+			case filepath.Join(templatesDir, "metadata.yaml"):
+				return "metadata.yaml", nil
+			case filepath.Join(templatesDir, "template.jsonnet"):
+				return "template.jsonnet", nil
+			case filepath.Join(templatesDir, "subdir", "nested.yaml"):
+				return filepath.Join("subdir", "nested.yaml"), nil
+			default:
+				return "", fmt.Errorf("unexpected path: %s", targpath)
+			}
+		}
+
+		bundler.shims.ReadFile = func(filename string) ([]byte, error) {
+			templatesDir := filepath.Join("contexts", "_template")
+			switch filename {
+			case filepath.Join(templatesDir, "metadata.yaml"):
+				return []byte("name: test\nversion: v1.0.0"), nil
+			case filepath.Join(templatesDir, "template.jsonnet"):
+				return []byte("local test = 'value';"), nil
+			case filepath.Join(templatesDir, "subdir", "nested.yaml"):
+				return []byte("nested: content"), nil
+			default:
+				return nil, fmt.Errorf("unexpected file: %s", filename)
+			}
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then no error should be returned
+		if err != nil {
+			t.Errorf("Expected nil error, got %v", err)
+		}
+
+		// And files should be added with correct paths
+		expectedFiles := map[string]string{
+			"_template/metadata.yaml":      "name: test\nversion: v1.0.0",
+			"_template/template.jsonnet":   "local test = 'value';",
+			"_template/subdir/nested.yaml": "nested: content",
+		}
+
+		for expectedPath, expectedContent := range expectedFiles {
+			if content, exists := filesAdded[expectedPath]; !exists {
+				t.Errorf("Expected file %s to be added", expectedPath)
+			} else if string(content) != expectedContent {
+				t.Errorf("Expected content %q for %s, got %q", expectedContent, expectedPath, string(content))
+			}
+		}
+
+		// And directories should be skipped (only 3 files should be added)
+		if len(filesAdded) != 3 {
+			t.Errorf("Expected 3 files to be added, got %d", len(filesAdded))
+		}
+	})
+
+	t.Run("ErrorWhenTemplatesDirectoryNotFound", func(t *testing.T) {
+		// Given a template bundler with missing templates directory
+		bundler, mocks := setup(t)
+		bundler.shims.Stat = func(name string) (os.FileInfo, error) {
+			templatesDir := filepath.Join("contexts", "_template")
+			if name == templatesDir {
+				return nil, os.ErrNotExist
+			}
+			return &mockFileInfo{name: name, isDir: true}, nil
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then an error should be returned
+		if err == nil {
+			t.Error("Expected error when templates directory not found")
+		}
+		expectedMsg := "templates directory not found: " + filepath.Join("contexts", "_template")
+		if err.Error() != expectedMsg {
+			t.Errorf("Expected error %q, got %q", expectedMsg, err.Error())
+		}
+	})
+
+	t.Run("ErrorWhenWalkFails", func(t *testing.T) {
+		// Given a template bundler with failing filesystem walk
+		bundler, mocks := setup(t)
+		bundler.shims.Walk = func(root string, fn filepath.WalkFunc) error {
+			return fmt.Errorf("permission denied")
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then the walk error should be returned
+		if err == nil {
+			t.Error("Expected error when walk fails")
+		}
+		if err.Error() != "permission denied" {
+			t.Errorf("Expected walk error, got: %v", err)
+		}
+	})
+
+	t.Run("ErrorWhenWalkCallbackFails", func(t *testing.T) {
+		// Given a template bundler with walk callback returning error
+		bundler, mocks := setup(t)
+		bundler.shims.Walk = func(root string, fn filepath.WalkFunc) error {
+			// Simulate walk callback being called with an error
+			templatesDir := filepath.Join("contexts", "_template")
+			return fn(filepath.Join(templatesDir, "test.txt"), &mockFileInfo{name: "test.txt", isDir: false}, fmt.Errorf("callback error"))
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then the callback error should be returned
+		if err == nil {
+			t.Error("Expected error when walk callback fails")
+		}
+		if err.Error() != "callback error" {
+			t.Errorf("Expected callback error, got: %v", err)
+		}
+	})
+
+	t.Run("ErrorWhenFilepathRelFails", func(t *testing.T) {
+		// Given a template bundler with failing relative path calculation
+		bundler, mocks := setup(t)
+		bundler.shims.Walk = func(root string, fn filepath.WalkFunc) error {
+			templatesDir := filepath.Join("contexts", "_template")
+			return fn(filepath.Join(templatesDir, "test.txt"), &mockFileInfo{name: "test.txt", isDir: false}, nil)
+		}
+		bundler.shims.FilepathRel = func(basepath, targpath string) (string, error) {
+			return "", fmt.Errorf("relative path error")
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then the relative path error should be returned
+		if err == nil {
+			t.Error("Expected error when filepath rel fails")
+		}
+		expectedMsg := "failed to get relative path: relative path error"
+		if err.Error() != expectedMsg {
+			t.Errorf("Expected error %q, got %q", expectedMsg, err.Error())
+		}
+	})
+
+	t.Run("ErrorWhenReadFileFails", func(t *testing.T) {
+		// Given a template bundler with failing file read
+		bundler, mocks := setup(t)
+		bundler.shims.Walk = func(root string, fn filepath.WalkFunc) error {
+			templatesDir := filepath.Join("contexts", "_template")
+			return fn(filepath.Join(templatesDir, "test.txt"), &mockFileInfo{name: "test.txt", isDir: false}, nil)
+		}
+		bundler.shims.FilepathRel = func(basepath, targpath string) (string, error) {
+			return "test.txt", nil
+		}
+		bundler.shims.ReadFile = func(filename string) ([]byte, error) {
+			return nil, fmt.Errorf("read permission denied")
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then the read error should be returned
+		if err == nil {
+			t.Error("Expected error when read file fails")
+		}
+		expectedMsg := "failed to read template file " + filepath.Join("contexts", "_template", "test.txt") + ": read permission denied"
+		if err.Error() != expectedMsg {
+			t.Errorf("Expected error %q, got %q", expectedMsg, err.Error())
+		}
+	})
+
+	t.Run("ErrorWhenArtifactAddFileFails", func(t *testing.T) {
+		// Given a template bundler with failing artifact add file
+		bundler, mocks := setup(t)
+		bundler.shims.Walk = func(root string, fn filepath.WalkFunc) error {
+			templatesDir := filepath.Join("contexts", "_template")
+			return fn(filepath.Join(templatesDir, "test.txt"), &mockFileInfo{name: "test.txt", isDir: false}, nil)
+		}
+		bundler.shims.FilepathRel = func(basepath, targpath string) (string, error) {
+			return "test.txt", nil
+		}
+		bundler.shims.ReadFile = func(filename string) ([]byte, error) {
+			return []byte("content"), nil
+		}
+		mocks.Artifact.AddFileFunc = func(path string, content []byte) error {
+			return fmt.Errorf("artifact storage full")
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then the add file error should be returned
+		if err == nil {
+			t.Error("Expected error when artifact add file fails")
+		}
+		if err.Error() != "artifact storage full" {
+			t.Errorf("Expected add file error, got: %v", err)
+		}
+	})
+
+	t.Run("SkipsDirectoriesInWalk", func(t *testing.T) {
+		// Given a template bundler with mix of files and directories
+		bundler, mocks := setup(t)
+
+		filesAdded := make([]string, 0)
+		mocks.Artifact.AddFileFunc = func(path string, content []byte) error {
+			filesAdded = append(filesAdded, path)
+			return nil
+		}
+
+		bundler.shims.Walk = func(root string, fn filepath.WalkFunc) error {
+			// Mix of directories and files
+			templatesDir := filepath.Join("contexts", "_template")
+			fn(filepath.Join(templatesDir, "dir1"), &mockFileInfo{name: "dir1", isDir: true}, nil)
+			fn(filepath.Join(templatesDir, "file1.txt"), &mockFileInfo{name: "file1.txt", isDir: false}, nil)
+			fn(filepath.Join(templatesDir, "dir2"), &mockFileInfo{name: "dir2", isDir: true}, nil)
+			fn(filepath.Join(templatesDir, "file2.yaml"), &mockFileInfo{name: "file2.yaml", isDir: false}, nil)
+			return nil
+		}
+
+		bundler.shims.FilepathRel = func(basepath, targpath string) (string, error) {
+			templatesDir := filepath.Join("contexts", "_template")
+			if targpath == filepath.Join(templatesDir, "file1.txt") {
+				return "file1.txt", nil
+			}
+			if targpath == filepath.Join(templatesDir, "file2.yaml") {
+				return "file2.yaml", nil
+			}
+			return "", nil
+		}
+
+		// When calling Bundle
+		err := bundler.Bundle(mocks.Artifact)
+
+		// Then no error should be returned
+		if err != nil {
+			t.Errorf("Expected nil error, got %v", err)
+		}
+
+		// And only files should be added (not directories)
+		expectedFiles := []string{"_template/file1.txt", "_template/file2.yaml"}
+		if len(filesAdded) != len(expectedFiles) {
+			t.Errorf("Expected %d files added, got %d", len(expectedFiles), len(filesAdded))
+		}
+
+		for i, expected := range expectedFiles {
+			if i < len(filesAdded) && filesAdded[i] != expected {
+				t.Errorf("Expected file %s at index %d, got %s", expected, i, filesAdded[i])
+			}
+		}
+	})
+}