feat(policy): implement project-level policy support (#18682)

packages/cli/src/config/config.ts

@@ -56,7 +56,10 @@ import { resolvePath } from '../utils/resolvePath.js';
 import { RESUME_LATEST } from '../utils/sessionUtils.js';
 
 import { isWorkspaceTrusted } from './trustedFolders.js';
-import { createPolicyEngineConfig } from './policy.js';
+import {
+  createPolicyEngineConfig,
+  resolveWorkspacePolicyState,
+} from './policy.js';
 import { ExtensionManager } from './extension-manager.js';
 import { McpServerEnablementManager } from './mcp/mcpServerEnablement.js';
 import type { ExtensionEvents } from '@google/gemini-cli-core/src/utils/extensionLoader.js';
@@ -692,9 +695,17 @@ export async function loadCliConfig(
     policyPaths: argv.policy,
   };
 
+  const { workspacePoliciesDir, policyUpdateConfirmationRequest } =
+    await resolveWorkspacePolicyState({
+      cwd,
+      trustedFolder,
+      interactive,
+    });
+
   const policyEngineConfig = await createPolicyEngineConfig(
     effectiveSettings,
     approvalMode,
+    workspacePoliciesDir,
   );
   policyEngineConfig.nonInteractive = !interactive;
 
@@ -758,6 +769,7 @@ export async function loadCliConfig(
     coreTools: settings.tools?.core || undefined,
     allowedTools: allowedTools.length > 0 ? allowedTools : undefined,
     policyEngineConfig,
+    policyUpdateConfirmationRequest,
     excludeTools,
     toolDiscoveryCommand: settings.tools?.discoveryCommand,
     toolCallCommand: settings.tools?.callCommand,

packages/cli/src/config/policy-engine.integration.test.ts

@@ -148,13 +148,13 @@ describe('Policy Engine Integration Tests', () => {
       );
       const engine = new PolicyEngine(config);
 
-      // MCP server allowed (priority 2.1) provides general allow for server
-      // MCP server allowed (priority 2.1) provides general allow for server
+      // MCP server allowed (priority 3.1) provides general allow for server
+      // MCP server allowed (priority 3.1) provides general allow for server
       expect(
         (await engine.check({ name: 'my-server__safe-tool' }, undefined))
           .decision,
       ).toBe(PolicyDecision.ALLOW);
-      // But specific tool exclude (priority 2.4) wins over server allow
+      // But specific tool exclude (priority 3.4) wins over server allow
       expect(
         (await engine.check({ name: 'my-server__dangerous-tool' }, undefined))
           .decision,
@@ -412,25 +412,25 @@ describe('Policy Engine Integration Tests', () => {
 
       // Find rules and verify their priorities
       const blockedToolRule = rules.find((r) => r.toolName === 'blocked-tool');
-      expect(blockedToolRule?.priority).toBe(2.4); // Command line exclude
+      expect(blockedToolRule?.priority).toBe(3.4); // Command line exclude
 
       const blockedServerRule = rules.find(
         (r) => r.toolName === 'blocked-server__*',
       );
-      expect(blockedServerRule?.priority).toBe(2.9); // MCP server exclude
+      expect(blockedServerRule?.priority).toBe(3.9); // MCP server exclude
 
       const specificToolRule = rules.find(
         (r) => r.toolName === 'specific-tool',
       );
-      expect(specificToolRule?.priority).toBe(2.3); // Command line allow
+      expect(specificToolRule?.priority).toBe(3.3); // Command line allow
 
       const trustedServerRule = rules.find(
         (r) => r.toolName === 'trusted-server__*',
       );
-      expect(trustedServerRule?.priority).toBe(2.2); // MCP trusted server
+      expect(trustedServerRule?.priority).toBe(3.2); // MCP trusted server
 
       const mcpServerRule = rules.find((r) => r.toolName === 'mcp-server__*');
-      expect(mcpServerRule?.priority).toBe(2.1); // MCP allowed server
+      expect(mcpServerRule?.priority).toBe(3.1); // MCP allowed server
 
       const readOnlyToolRule = rules.find((r) => r.toolName === 'glob');
       // Priority 70 in default tier → 1.07 (Overriding Plan Mode Deny)
@@ -577,16 +577,16 @@ describe('Policy Engine Integration Tests', () => {
 
       // Verify each rule has the expected priority
       const tool3Rule = rules.find((r) => r.toolName === 'tool3');
-      expect(tool3Rule?.priority).toBe(2.4); // Excluded tools (user tier)
+      expect(tool3Rule?.priority).toBe(3.4); // Excluded tools (user tier)
 
       const server2Rule = rules.find((r) => r.toolName === 'server2__*');
-      expect(server2Rule?.priority).toBe(2.9); // Excluded servers (user tier)
+      expect(server2Rule?.priority).toBe(3.9); // Excluded servers (user tier)
 
       const tool1Rule = rules.find((r) => r.toolName === 'tool1');
-      expect(tool1Rule?.priority).toBe(2.3); // Allowed tools (user tier)
+      expect(tool1Rule?.priority).toBe(3.3); // Allowed tools (user tier)
 
       const server1Rule = rules.find((r) => r.toolName === 'server1__*');
-      expect(server1Rule?.priority).toBe(2.1); // Allowed servers (user tier)
+      expect(server1Rule?.priority).toBe(3.1); // Allowed servers (user tier)
 
       const globRule = rules.find((r) => r.toolName === 'glob');
       // Priority 70 in default tier → 1.07

packages/cli/src/config/policy.test.ts

@@ -0,0 +1,145 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
+import * as fs from 'node:fs';
+import * as path from 'node:path';
+import * as os from 'node:os';
+import { resolveWorkspacePolicyState } from './policy.js';
+import { writeToStderr } from '@google/gemini-cli-core';
+
+// Mock debugLogger to avoid noise in test output
+vi.mock('@google/gemini-cli-core', async (importOriginal) => {
+  const actual =
+    await importOriginal<typeof import('@google/gemini-cli-core')>();
+  return {
+    ...actual,
+    debugLogger: {
+      warn: vi.fn(),
+      error: vi.fn(),
+      debug: vi.fn(),
+    },
+    writeToStderr: vi.fn(),
+  };
+});
+
+describe('resolveWorkspacePolicyState', () => {
+  let tempDir: string;
+  let workspaceDir: string;
+  let policiesDir: string;
+
+  beforeEach(() => {
+    // Create a temporary directory for the test
+    tempDir = fs.mkdtempSync(path.join(os.tmpdir(), 'gemini-cli-test-'));
+    // Redirect GEMINI_CLI_HOME to the temp directory to isolate integrity storage
+    vi.stubEnv('GEMINI_CLI_HOME', tempDir);
+
+    workspaceDir = path.join(tempDir, 'workspace');
+    fs.mkdirSync(workspaceDir);
+    policiesDir = path.join(workspaceDir, '.gemini', 'policies');
+
+    vi.clearAllMocks();
+  });
+
+  afterEach(() => {
+    // Clean up temporary directory
+    fs.rmSync(tempDir, { recursive: true, force: true });
+    vi.unstubAllEnvs();
+  });
+
+  it('should return empty state if folder is not trusted', async () => {
+    const result = await resolveWorkspacePolicyState({
+      cwd: workspaceDir,
+      trustedFolder: false,
+      interactive: true,
+    });
+
+    expect(result).toEqual({
+      workspacePoliciesDir: undefined,
+      policyUpdateConfirmationRequest: undefined,
+    });
+  });
+
+  it('should return policy directory if integrity matches', async () => {
+    // Set up policies directory with a file
+    fs.mkdirSync(policiesDir, { recursive: true });
+    fs.writeFileSync(path.join(policiesDir, 'policy.toml'), 'rules = []');
+
+    // First call to establish integrity (interactive accept)
+    const firstResult = await resolveWorkspacePolicyState({
+      cwd: workspaceDir,
+      trustedFolder: true,
+      interactive: true,
+    });
+    expect(firstResult.policyUpdateConfirmationRequest).toBeDefined();
+
+    // Establish integrity manually as if accepted
+    const { PolicyIntegrityManager } = await import('@google/gemini-cli-core');
+    const integrityManager = new PolicyIntegrityManager();
+    await integrityManager.acceptIntegrity(
+      'workspace',
+      workspaceDir,
+      firstResult.policyUpdateConfirmationRequest!.newHash,
+    );
+
+    // Second call should match
+    const result = await resolveWorkspacePolicyState({
+      cwd: workspaceDir,
+      trustedFolder: true,
+      interactive: true,
+    });
+
+    expect(result.workspacePoliciesDir).toBe(policiesDir);
+    expect(result.policyUpdateConfirmationRequest).toBeUndefined();
+  });
+
+  it('should return undefined if integrity is NEW but fileCount is 0', async () => {
+    const result = await resolveWorkspacePolicyState({
+      cwd: workspaceDir,
+      trustedFolder: true,
+      interactive: true,
+    });
+
+    expect(result.workspacePoliciesDir).toBeUndefined();
+    expect(result.policyUpdateConfirmationRequest).toBeUndefined();
+  });
+
+  it('should return confirmation request if changed in interactive mode', async () => {
+    fs.mkdirSync(policiesDir, { recursive: true });
+    fs.writeFileSync(path.join(policiesDir, 'policy.toml'), 'rules = []');
+
+    const result = await resolveWorkspacePolicyState({
+      cwd: workspaceDir,
+      trustedFolder: true,
+      interactive: true,
+    });
+
+    expect(result.workspacePoliciesDir).toBeUndefined();
+    expect(result.policyUpdateConfirmationRequest).toEqual({
+      scope: 'workspace',
+      identifier: workspaceDir,
+      policyDir: policiesDir,
+      newHash: expect.any(String),
+    });
+  });
+
+  it('should warn and auto-accept if changed in non-interactive mode', async () => {
+    fs.mkdirSync(policiesDir, { recursive: true });
+    fs.writeFileSync(path.join(policiesDir, 'policy.toml'), 'rules = []');
+
+    const result = await resolveWorkspacePolicyState({
+      cwd: workspaceDir,
+      trustedFolder: true,
+      interactive: false,
+    });
+
+    expect(result.workspacePoliciesDir).toBe(policiesDir);
+    expect(result.policyUpdateConfirmationRequest).toBeUndefined();
+    expect(writeToStderr).toHaveBeenCalledWith(
+      expect.stringContaining('Automatically accepting and loading'),
+    );
+  });
+});

packages/cli/src/config/policy.ts

@@ -12,12 +12,18 @@ import {
   type PolicySettings,
   createPolicyEngineConfig as createCorePolicyEngineConfig,
   createPolicyUpdater as createCorePolicyUpdater,
+  PolicyIntegrityManager,
+  IntegrityStatus,
+  Storage,
+  type PolicyUpdateConfirmationRequest,
+  writeToStderr,
 } from '@google/gemini-cli-core';
 import { type Settings } from './settings.js';
 
 export async function createPolicyEngineConfig(
   settings: Settings,
   approvalMode: ApprovalMode,
+  workspacePoliciesDir?: string,
 ): Promise<PolicyEngineConfig> {
   // Explicitly construct PolicySettings from Settings to ensure type safety
   // and avoid accidental leakage of other settings properties.
@@ -26,6 +32,7 @@ export async function createPolicyEngineConfig(
     tools: settings.tools,
     mcpServers: settings.mcpServers,
     policyPaths: settings.policyPaths,
+    workspacePoliciesDir,
   };
 
   return createCorePolicyEngineConfig(policySettings, approvalMode);
@@ -37,3 +44,68 @@ export function createPolicyUpdater(
 ) {
   return createCorePolicyUpdater(policyEngine, messageBus);
 }
+
+export interface WorkspacePolicyState {
+  workspacePoliciesDir?: string;
+  policyUpdateConfirmationRequest?: PolicyUpdateConfirmationRequest;
+}
+
+/**
+ * Resolves the workspace policy state by checking folder trust and policy integrity.
+ */
+export async function resolveWorkspacePolicyState(options: {
+  cwd: string;
+  trustedFolder: boolean;
+  interactive: boolean;
+}): Promise<WorkspacePolicyState> {
+  const { cwd, trustedFolder, interactive } = options;
+
+  let workspacePoliciesDir: string | undefined;
+  let policyUpdateConfirmationRequest:
+    | PolicyUpdateConfirmationRequest
+    | undefined;
+
+  if (trustedFolder) {
+    const potentialWorkspacePoliciesDir = new Storage(
+      cwd,
+    ).getWorkspacePoliciesDir();
+    const integrityManager = new PolicyIntegrityManager();
+    const integrityResult = await integrityManager.checkIntegrity(
+      'workspace',
+      cwd,
+      potentialWorkspacePoliciesDir,
+    );
+
+    if (integrityResult.status === IntegrityStatus.MATCH) {
+      workspacePoliciesDir = potentialWorkspacePoliciesDir;
+    } else if (
+      integrityResult.status === IntegrityStatus.NEW &&
+      integrityResult.fileCount === 0
+    ) {
+      // No workspace policies found
+      workspacePoliciesDir = undefined;
+    } else if (interactive) {
+      // Policies changed or are new, and we are in interactive mode
+      policyUpdateConfirmationRequest = {
+        scope: 'workspace',
+        identifier: cwd,
+        policyDir: potentialWorkspacePoliciesDir,
+        newHash: integrityResult.hash,
+      };
+    } else {
+      // Non-interactive mode: warn and automatically accept/load
+      await integrityManager.acceptIntegrity(
+        'workspace',
+        cwd,
+        integrityResult.hash,
+      );
+      workspacePoliciesDir = potentialWorkspacePoliciesDir;
+      // debugLogger.warn here doesn't show up in the terminal. It is showing up only in debug mode on the debug console
+      writeToStderr(
+        'WARNING: Workspace policies changed or are new. Automatically accepting and loading them in non-interactive mode.\n',
+      );
+    }
+  }
+
+  return { workspacePoliciesDir, policyUpdateConfirmationRequest };
+}

packages/cli/src/config/workspace-policy-cli.test.ts

@@ -0,0 +1,239 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { describe, it, expect, vi, beforeEach } from 'vitest';
+import * as path from 'node:path';
+import { loadCliConfig, type CliArgs } from './config.js';
+import { createTestMergedSettings } from './settings.js';
+import * as ServerConfig from '@google/gemini-cli-core';
+import { isWorkspaceTrusted } from './trustedFolders.js';
+
+// Mock dependencies
+vi.mock('./trustedFolders.js', () => ({
+  isWorkspaceTrusted: vi.fn(),
+}));
+
+const mockCheckIntegrity = vi.fn();
+const mockAcceptIntegrity = vi.fn();
+
+vi.mock('@google/gemini-cli-core', async () => {
+  const actual = await vi.importActual<typeof ServerConfig>(
+    '@google/gemini-cli-core',
+  );
+  return {
+    ...actual,
+    loadServerHierarchicalMemory: vi.fn().mockResolvedValue({
+      memoryContent: '',
+      fileCount: 0,
+      filePaths: [],
+    }),
+    createPolicyEngineConfig: vi.fn().mockResolvedValue({
+      rules: [],
+      checkers: [],
+    }),
+    getVersion: vi.fn().mockResolvedValue('test-version'),
+    PolicyIntegrityManager: vi.fn().mockImplementation(() => ({
+      checkIntegrity: mockCheckIntegrity,
+      acceptIntegrity: mockAcceptIntegrity,
+    })),
+    IntegrityStatus: { MATCH: 'match', NEW: 'new', MISMATCH: 'mismatch' },
+    debugLogger: {
+      warn: vi.fn(),
+      error: vi.fn(),
+    },
+    isHeadlessMode: vi.fn().mockReturnValue(false), // Default to interactive
+  };
+});
+
+describe('Workspace-Level Policy CLI Integration', () => {
+  const MOCK_CWD = process.cwd();
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+    // Default to MATCH for existing tests
+    mockCheckIntegrity.mockResolvedValue({
+      status: 'match',
+      hash: 'test-hash',
+      fileCount: 1,
+    });
+    vi.mocked(ServerConfig.isHeadlessMode).mockReturnValue(false);
+  });
+
+  it('should have getWorkspacePoliciesDir on Storage class', () => {
+    const storage = new ServerConfig.Storage(MOCK_CWD);
+    expect(storage.getWorkspacePoliciesDir).toBeDefined();
+    expect(typeof storage.getWorkspacePoliciesDir).toBe('function');
+  });
+
+  it('should pass workspacePoliciesDir to createPolicyEngineConfig when folder is trusted', async () => {
+    vi.mocked(isWorkspaceTrusted).mockReturnValue({
+      isTrusted: true,
+      source: 'file',
+    });
+
+    const settings = createTestMergedSettings();
+    const argv = { query: 'test' } as unknown as CliArgs;
+
+    await loadCliConfig(settings, 'test-session', argv, { cwd: MOCK_CWD });
+
+    expect(ServerConfig.createPolicyEngineConfig).toHaveBeenCalledWith(
+      expect.objectContaining({
+        workspacePoliciesDir: expect.stringContaining(
+          path.join('.gemini', 'policies'),
+        ),
+      }),
+      expect.anything(),
+    );
+  });
+
+  it('should NOT pass workspacePoliciesDir to createPolicyEngineConfig when folder is NOT trusted', async () => {
+    vi.mocked(isWorkspaceTrusted).mockReturnValue({
+      isTrusted: false,
+      source: 'file',
+    });
+
+    const settings = createTestMergedSettings();
+    const argv = { query: 'test' } as unknown as CliArgs;
+
+    await loadCliConfig(settings, 'test-session', argv, { cwd: MOCK_CWD });
+
+    expect(ServerConfig.createPolicyEngineConfig).toHaveBeenCalledWith(
+      expect.objectContaining({
+        workspacePoliciesDir: undefined,
+      }),
+      expect.anything(),
+    );
+  });
+
+  it('should NOT pass workspacePoliciesDir if integrity is NEW but fileCount is 0', async () => {
+    vi.mocked(isWorkspaceTrusted).mockReturnValue({
+      isTrusted: true,
+      source: 'file',
+    });
+    mockCheckIntegrity.mockResolvedValue({
+      status: 'new',
+      hash: 'hash',
+      fileCount: 0,
+    });
+
+    const settings = createTestMergedSettings();
+    const argv = { query: 'test' } as unknown as CliArgs;
+
+    await loadCliConfig(settings, 'test-session', argv, { cwd: MOCK_CWD });
+
+    expect(ServerConfig.createPolicyEngineConfig).toHaveBeenCalledWith(
+      expect.objectContaining({
+        workspacePoliciesDir: undefined,
+      }),
+      expect.anything(),
+    );
+  });
+
+  it('should automatically accept and load workspacePoliciesDir if integrity MISMATCH in non-interactive mode', async () => {
+    vi.mocked(isWorkspaceTrusted).mockReturnValue({
+      isTrusted: true,
+      source: 'file',
+    });
+    mockCheckIntegrity.mockResolvedValue({
+      status: 'mismatch',
+      hash: 'new-hash',
+      fileCount: 1,
+    });
+    vi.mocked(ServerConfig.isHeadlessMode).mockReturnValue(true); // Non-interactive
+
+    const settings = createTestMergedSettings();
+    const argv = { prompt: 'do something' } as unknown as CliArgs;
+
+    await loadCliConfig(settings, 'test-session', argv, { cwd: MOCK_CWD });
+
+    expect(mockAcceptIntegrity).toHaveBeenCalledWith(
+      'workspace',
+      MOCK_CWD,
+      'new-hash',
+    );
+    expect(ServerConfig.createPolicyEngineConfig).toHaveBeenCalledWith(
+      expect.objectContaining({
+        workspacePoliciesDir: expect.stringContaining(
+          path.join('.gemini', 'policies'),
+        ),
+      }),
+      expect.anything(),
+    );
+  });
+
+  it('should set policyUpdateConfirmationRequest if integrity MISMATCH in interactive mode', async () => {
+    vi.mocked(isWorkspaceTrusted).mockReturnValue({
+      isTrusted: true,
+      source: 'file',
+    });
+    mockCheckIntegrity.mockResolvedValue({
+      status: 'mismatch',
+      hash: 'new-hash',
+      fileCount: 1,
+    });
+    vi.mocked(ServerConfig.isHeadlessMode).mockReturnValue(false); // Interactive
+
+    const settings = createTestMergedSettings();
+    const argv = {
+      query: 'test',
+      promptInteractive: 'test',
+    } as unknown as CliArgs;
+
+    const config = await loadCliConfig(settings, 'test-session', argv, {
+      cwd: MOCK_CWD,
+    });
+
+    expect(config.getPolicyUpdateConfirmationRequest()).toEqual({
+      scope: 'workspace',
+      identifier: MOCK_CWD,
+      policyDir: expect.stringContaining(path.join('.gemini', 'policies')),
+      newHash: 'new-hash',
+    });
+    // In interactive mode without accept flag, it waits for user confirmation (handled by UI),
+    // so it currently DOES NOT pass the directory to createPolicyEngineConfig yet.
+    // The UI will handle the confirmation and reload/update.
+    expect(ServerConfig.createPolicyEngineConfig).toHaveBeenCalledWith(
+      expect.objectContaining({
+        workspacePoliciesDir: undefined,
+      }),
+      expect.anything(),
+    );
+  });
+
+  it('should set policyUpdateConfirmationRequest if integrity is NEW with files (first time seen) in interactive mode', async () => {
+    vi.mocked(isWorkspaceTrusted).mockReturnValue({
+      isTrusted: true,
+      source: 'file',
+    });
+    mockCheckIntegrity.mockResolvedValue({
+      status: 'new',
+      hash: 'new-hash',
+      fileCount: 5,
+    });
+    vi.mocked(ServerConfig.isHeadlessMode).mockReturnValue(false); // Interactive
+
+    const settings = createTestMergedSettings();
+    const argv = { query: 'test' } as unknown as CliArgs;
+
+    const config = await loadCliConfig(settings, 'test-session', argv, {
+      cwd: MOCK_CWD,
+    });
+
+    expect(config.getPolicyUpdateConfirmationRequest()).toEqual({
+      scope: 'workspace',
+      identifier: MOCK_CWD,
+      policyDir: expect.stringContaining(path.join('.gemini', 'policies')),
+      newHash: 'new-hash',
+    });
+
+    expect(ServerConfig.createPolicyEngineConfig).toHaveBeenCalledWith(
+      expect.objectContaining({
+        workspacePoliciesDir: undefined,
+      }),
+      expect.anything(),
+    );
+  });
+});

packages/cli/src/test-utils/render.tsx

@@ -506,6 +506,7 @@ const mockUIActions: UIActions = {
   vimHandleInput: vi.fn(),
   handleIdePromptComplete: vi.fn(),
   handleFolderTrustSelect: vi.fn(),
+  setIsPolicyUpdateDialogOpen: vi.fn(),
   setConstrainHeight: vi.fn(),
   onEscapePromptChange: vi.fn(),
   refreshStatic: vi.fn(),

packages/cli/src/ui/AppContainer.tsx

@@ -1438,6 +1438,13 @@ Logging in with Google... Restarting Gemini CLI to continue.
 
   const { isFolderTrustDialogOpen, handleFolderTrustSelect, isRestarting } =
     useFolderTrust(settings, setIsTrustedFolder, historyManager.addItem);
+
+  const policyUpdateConfirmationRequest =
+    config.getPolicyUpdateConfirmationRequest();
+  const [isPolicyUpdateDialogOpen, setIsPolicyUpdateDialogOpen] = useState(
+    !!policyUpdateConfirmationRequest,
+  );
+
   const {
     needsRestart: ideNeedsRestart,
     restartReason: ideTrustRestartReason,
@@ -1910,6 +1917,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
     (shouldShowRetentionWarning && retentionCheckComplete) ||
     shouldShowIdePrompt ||
     isFolderTrustDialogOpen ||
+    isPolicyUpdateDialogOpen ||
     adminSettingsChanged ||
     !!commandConfirmationRequest ||
     !!authConsentRequest ||
@@ -2137,6 +2145,8 @@ Logging in with Google... Restarting Gemini CLI to continue.
       isResuming,
       shouldShowIdePrompt,
       isFolderTrustDialogOpen: isFolderTrustDialogOpen ?? false,
+      isPolicyUpdateDialogOpen,
+      policyUpdateConfirmationRequest,
       isTrustedFolder,
       constrainHeight,
       showErrorDetails,
@@ -2259,6 +2269,8 @@ Logging in with Google... Restarting Gemini CLI to continue.
       isResuming,
       shouldShowIdePrompt,
       isFolderTrustDialogOpen,
+      isPolicyUpdateDialogOpen,
+      policyUpdateConfirmationRequest,
       isTrustedFolder,
       constrainHeight,
       showErrorDetails,
@@ -2356,6 +2368,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
       vimHandleInput,
       handleIdePromptComplete,
       handleFolderTrustSelect,
+      setIsPolicyUpdateDialogOpen,
       setConstrainHeight,
       onEscapePromptChange: handleEscapePromptChange,
       refreshStatic,
@@ -2440,6 +2453,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
       vimHandleInput,
       handleIdePromptComplete,
       handleFolderTrustSelect,
+      setIsPolicyUpdateDialogOpen,
       setConstrainHeight,
       handleEscapePromptChange,
       refreshStatic,

packages/cli/src/ui/components/DialogManager.tsx

@@ -37,6 +37,7 @@ import { AgentConfigDialog } from './AgentConfigDialog.js';
 import { SessionRetentionWarningDialog } from './SessionRetentionWarningDialog.js';
 import { useCallback } from 'react';
 import { SettingScope } from '../../config/settings.js';
+import { PolicyUpdateDialog } from './PolicyUpdateDialog.js';
 
 interface DialogManagerProps {
   addItem: UseHistoryManagerReturn['addItem'];
@@ -166,6 +167,15 @@ export const DialogManager = ({
       />
     );
   }
+  if (uiState.isPolicyUpdateDialogOpen) {
+    return (
+      <PolicyUpdateDialog
+        config={config}
+        request={uiState.policyUpdateConfirmationRequest!}
+        onClose={() => uiActions.setIsPolicyUpdateDialogOpen(false)}
+      />
+    );
+  }
   if (uiState.loopDetectionConfirmationRequest) {
     return (
       <LoopDetectionConfirmation

packages/cli/src/ui/components/PolicyUpdateDialog.test.tsx

@@ -0,0 +1,141 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { describe, it, expect, vi, afterEach, beforeEach } from 'vitest';
+import { act } from 'react';
+import { renderWithProviders } from '../../test-utils/render.js';
+import { waitFor } from '../../test-utils/async.js';
+import { PolicyUpdateDialog } from './PolicyUpdateDialog.js';
+import {
+  type Config,
+  type PolicyUpdateConfirmationRequest,
+  PolicyIntegrityManager,
+} from '@google/gemini-cli-core';
+
+const { mockAcceptIntegrity } = vi.hoisted(() => ({
+  mockAcceptIntegrity: vi.fn(),
+}));
+
+// Mock PolicyIntegrityManager
+vi.mock('@google/gemini-cli-core', async (importOriginal) => {
+  const original =
+    await importOriginal<typeof import('@google/gemini-cli-core')>();
+  return {
+    ...original,
+    PolicyIntegrityManager: vi.fn().mockImplementation(() => ({
+      acceptIntegrity: mockAcceptIntegrity,
+      checkIntegrity: vi.fn(),
+    })),
+  };
+});
+
+describe('PolicyUpdateDialog', () => {
+  let mockConfig: Config;
+  let mockRequest: PolicyUpdateConfirmationRequest;
+  let onClose: () => void;
+
+  beforeEach(() => {
+    mockConfig = {
+      loadWorkspacePolicies: vi.fn().mockResolvedValue(undefined),
+    } as unknown as Config;
+
+    mockRequest = {
+      scope: 'workspace',
+      identifier: '/test/workspace/.gemini/policies',
+      policyDir: '/test/workspace/.gemini/policies',
+      newHash: 'test-hash',
+    } as PolicyUpdateConfirmationRequest;
+
+    onClose = vi.fn();
+  });
+
+  afterEach(() => {
+    vi.clearAllMocks();
+  });
+
+  it('renders correctly and matches snapshot', async () => {
+    const { lastFrame, waitUntilReady } = renderWithProviders(
+      <PolicyUpdateDialog
+        config={mockConfig}
+        request={mockRequest}
+        onClose={onClose}
+      />,
+    );
+
+    await waitUntilReady();
+    const output = lastFrame();
+    expect(output).toMatchSnapshot();
+    expect(output).toContain('New or changed workspace policies detected');
+    expect(output).toContain('Location: /test/workspace/.gemini/policies');
+    expect(output).toContain('Accept and Load');
+    expect(output).toContain('Ignore');
+  });
+
+  it('handles ACCEPT correctly', async () => {
+    const { stdin } = renderWithProviders(
+      <PolicyUpdateDialog
+        config={mockConfig}
+        request={mockRequest}
+        onClose={onClose}
+      />,
+    );
+
+    // Accept is the first option, so pressing enter should select it
+    await act(async () => {
+      stdin.write('\r');
+    });
+
+    await waitFor(() => {
+      expect(PolicyIntegrityManager).toHaveBeenCalled();
+      expect(mockConfig.loadWorkspacePolicies).toHaveBeenCalledWith(
+        mockRequest.policyDir,
+      );
+      expect(onClose).toHaveBeenCalled();
+    });
+  });
+
+  it('handles IGNORE correctly', async () => {
+    const { stdin } = renderWithProviders(
+      <PolicyUpdateDialog
+        config={mockConfig}
+        request={mockRequest}
+        onClose={onClose}
+      />,
+    );
+
+    // Move down to Ignore option
+    await act(async () => {
+      stdin.write('\x1B[B'); // Down arrow
+    });
+    await act(async () => {
+      stdin.write('\r'); // Enter
+    });
+
+    await waitFor(() => {
+      expect(PolicyIntegrityManager).not.toHaveBeenCalled();
+      expect(mockConfig.loadWorkspacePolicies).not.toHaveBeenCalled();
+      expect(onClose).toHaveBeenCalled();
+    });
+  });
+
+  it('calls onClose when Escape key is pressed', async () => {
+    const { stdin } = renderWithProviders(
+      <PolicyUpdateDialog
+        config={mockConfig}
+        request={mockRequest}
+        onClose={onClose}
+      />,
+    );
+
+    await act(async () => {
+      stdin.write('\x1B'); // Escape key (matches Command.ESCAPE default)
+    });
+
+    await waitFor(() => {
+      expect(onClose).toHaveBeenCalled();
+    });
+  });
+});

packages/cli/src/ui/components/PolicyUpdateDialog.tsx

@@ -0,0 +1,116 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { Box, Text } from 'ink';
+import { useCallback, useRef } from 'react';
+import type React from 'react';
+import {
+  type Config,
+  type PolicyUpdateConfirmationRequest,
+  PolicyIntegrityManager,
+} from '@google/gemini-cli-core';
+import { theme } from '../semantic-colors.js';
+import type { RadioSelectItem } from './shared/RadioButtonSelect.js';
+import { RadioButtonSelect } from './shared/RadioButtonSelect.js';
+import { useKeypress } from '../hooks/useKeypress.js';
+import { keyMatchers, Command } from '../keyMatchers.js';
+
+export enum PolicyUpdateChoice {
+  ACCEPT = 'accept',
+  IGNORE = 'ignore',
+}
+
+interface PolicyUpdateDialogProps {
+  config: Config;
+  request: PolicyUpdateConfirmationRequest;
+  onClose: () => void;
+}
+
+export const PolicyUpdateDialog: React.FC<PolicyUpdateDialogProps> = ({
+  config,
+  request,
+  onClose,
+}) => {
+  const isProcessing = useRef(false);
+
+  const handleSelect = useCallback(
+    async (choice: PolicyUpdateChoice) => {
+      if (isProcessing.current) {
+        return;
+      }
+
+      isProcessing.current = true;
+      try {
+        if (choice === PolicyUpdateChoice.ACCEPT) {
+          const integrityManager = new PolicyIntegrityManager();
+          await integrityManager.acceptIntegrity(
+            request.scope,
+            request.identifier,
+            request.newHash,
+          );
+          await config.loadWorkspacePolicies(request.policyDir);
+        }
+        onClose();
+      } finally {
+        isProcessing.current = false;
+      }
+    },
+    [config, request, onClose],
+  );
+
+  useKeypress(
+    (key) => {
+      if (keyMatchers[Command.ESCAPE](key)) {
+        onClose();
+        return true;
+      }
+      return false;
+    },
+    { isActive: true },
+  );
+
+  const options: Array<RadioSelectItem<PolicyUpdateChoice>> = [
+    {
+      label: 'Accept and Load',
+      value: PolicyUpdateChoice.ACCEPT,
+      key: 'accept',
+    },
+    {
+      label: 'Ignore (Use Default Policies)',
+      value: PolicyUpdateChoice.IGNORE,
+      key: 'ignore',
+    },
+  ];
+
+  return (
+    <Box flexDirection="column" width="100%">
+      <Box
+        flexDirection="column"
+        borderStyle="round"
+        borderColor={theme.status.warning}
+        padding={1}
+        marginLeft={1}
+        marginRight={1}
+      >
+        <Box flexDirection="column" marginBottom={1}>
+          <Text bold color={theme.text.primary}>
+            New or changed {request.scope} policies detected
+          </Text>
+          <Text color={theme.text.primary}>Location: {request.identifier}</Text>
+          <Text color={theme.text.primary}>
+            Do you want to accept and load these policies?
+          </Text>
+        </Box>
+
+        <RadioButtonSelect
+          items={options}
+          onSelect={handleSelect}
+          isFocused={true}
+        />
+      </Box>
+    </Box>
+  );
+};

packages/cli/src/ui/components/__snapshots__/PolicyUpdateDialog.test.tsx.snap

@@ -0,0 +1,15 @@
+// Vitest Snapshot v1, https://vitest.dev/guide/snapshot.html
+
+exports[`PolicyUpdateDialog > renders correctly and matches snapshot 1`] = `
+" ╭────────────────────────────────────────────────────────────────────────────────────────────────╮
+ │                                                                                                │
+ │ New or changed workspace policies detected                                                     │
+ │ Location: /test/workspace/.gemini/policies                                                     │
+ │ Do you want to accept and load these policies?                                                 │
+ │                                                                                                │
+ │ ● 1. Accept and Load                                                                           │
+ │   2. Ignore (Use Default Policies)                                                             │
+ │                                                                                                │
+ ╰────────────────────────────────────────────────────────────────────────────────────────────────╯
+"
+`;

packages/cli/src/ui/contexts/UIActionsContext.tsx

@@ -1,6 +1,6 @@
 /**
  * @license
- * Copyright 2025 Google LLC
+ * Copyright 2026 Google LLC
  * SPDX-License-Identifier: Apache-2.0
  */
 
@@ -52,6 +52,7 @@ export interface UIActions {
   vimHandleInput: (key: Key) => boolean;
   handleIdePromptComplete: (result: IdeIntegrationNudgeResult) => void;
   handleFolderTrustSelect: (choice: FolderTrustChoice) => void;
+  setIsPolicyUpdateDialogOpen: (value: boolean) => void;
   setConstrainHeight: (value: boolean) => void;
   onEscapePromptChange: (show: boolean) => void;
   refreshStatic: () => void;

packages/cli/src/ui/contexts/UIStateContext.tsx

@@ -27,6 +27,7 @@ import type {
   FallbackIntent,
   ValidationIntent,
   AgentDefinition,
+  PolicyUpdateConfirmationRequest,
 } from '@google/gemini-cli-core';
 import { type TransientMessageType } from '../../utils/events.js';
 import type { DOMElement } from 'ink';
@@ -112,6 +113,8 @@ export interface UIState {
   isResuming: boolean;
   shouldShowIdePrompt: boolean;
   isFolderTrustDialogOpen: boolean;
+  isPolicyUpdateDialogOpen: boolean;
+  policyUpdateConfirmationRequest: PolicyUpdateConfirmationRequest | undefined;
   isTrustedFolder: boolean | undefined;
   constrainHeight: boolean;
   showErrorDetails: boolean;