diff --git a/Documentation/config/extensions.adoc b/Documentation/config/extensions.adoc
index f4f57c9114..e8d9d9a19a 100644
--- a/Documentation/config/extensions.adoc
+++ b/Documentation/config/extensions.adoc
@@ -95,6 +95,10 @@ Git will error out if a module does not have a corresponding
 Existing (pre-extension) submodules need to be migrated by adding the missing
 config entries. This is done manually for now, e.g. for each submodule:
 `git config submodule.<name>.gitdir .git/modules/<name>`.
++
+The extension can be enabled automatically for new repositories by setting
+`init.defaultSubmodulePathConfig` to `true`, for example by running
+`git config --global init.defaultSubmodulePathConfig true`.
 
 worktreeConfig:::
 	If enabled, then worktrees will load config settings from the
diff --git a/Documentation/config/init.adoc b/Documentation/config/init.adoc
index e45b2a8121..7b4abdaf8b 100644
--- a/Documentation/config/init.adoc
+++ b/Documentation/config/init.adoc
@@ -18,3 +18,9 @@ endif::[]
 	See `--ref-format=` in linkgit:git-init[1]. Both the command line
 	option and the `GIT_DEFAULT_REF_FORMAT` environment variable take
 	precedence over this config.
+
+init.defaultSubmodulePathConfig::
+	A boolean that specifies if `git init` and `git clone` should
+	automatically set `extensions.submodulePathConfig` to `true`. This
+	allows all new repositories to automatically use the submodule path
+	extension. Defaults to `false` when unset.
diff --git a/setup.c b/setup.c
index 207fa36e10..3f91a4aaec 100644
--- a/setup.c
+++ b/setup.c
@@ -2228,6 +2228,7 @@ void initialize_repository_version(int hash_algo,
 {
 	struct strbuf repo_version = STRBUF_INIT;
 	int target_version = GIT_REPO_VERSION;
+	int default_submodule_path_config = 0;
 
 	/*
 	 * Note that we initialize the repository version to 1 when the ref
@@ -2266,6 +2267,15 @@ void initialize_repository_version(int hash_algo,
 		clear_repository_format(&repo_fmt);
 	}
 
+	repo_config_get_bool(the_repository, "init.defaultSubmodulePathConfig",
+			     &default_submodule_path_config);
+	if (default_submodule_path_config) {
+		/* extensions.submodulepathconfig requires at least version 1 */
+		if (target_version == 0)
+			target_version = 1;
+		repo_config_set(the_repository, "extensions.submodulepathconfig", "true");
+	}
+
 	strbuf_addf(&repo_version, "%d", target_version);
 	repo_config_set(the_repository, "core.repositoryformatversion", repo_version.buf);
 
diff --git a/t/t7425-submodule-gitdir-path-extension.sh b/t/t7425-submodule-gitdir-path-extension.sh
index 453183e27c..6cb844e809 100755
--- a/t/t7425-submodule-gitdir-path-extension.sh
+++ b/t/t7425-submodule-gitdir-path-extension.sh
@@ -157,4 +157,129 @@ test_expect_success 'fetch mixed submodule changes and verify updates' '
 	)
 '
 
+test_expect_success '`git init` respects init.defaultSubmodulePathConfig' '
+	git config --global init.defaultSubmodulePathConfig true &&
+	git init repo-init &&
+	git -C repo-init config extensions.submodulePathConfig > actual &&
+	echo true > expect &&
+	test_cmp expect actual &&
+	# create a submodule and check gitdir
+	(
+		cd repo-init &&
+		git init -b main sub &&
+		test_commit -C sub sub-initial &&
+		git submodule add ./sub sub &&
+		git config submodule.sub.gitdir > actual &&
+		echo ".git/modules/sub" > expect &&
+		test_cmp expect actual
+	) &&
+	git config --global --unset init.defaultSubmodulePathConfig
+'
+
+test_expect_success '`git init` does not set extension by default' '
+	git init upstream &&
+	test_commit -C upstream initial &&
+	test_must_fail git -C upstream config extensions.submodulePathConfig &&
+	# create a pair of submodules and check gitdir is not created
+	git init -b main sub &&
+	test_commit -C sub sub-initial &&
+	(
+		cd upstream &&
+		git submodule add ../sub sub1 &&
+		test_path_is_dir .git/modules/sub1 &&
+		test_must_fail git config submodule.sub1.gitdir &&
+		git submodule add ../sub sub2 &&
+		test_path_is_dir .git/modules/sub2 &&
+		test_must_fail git config submodule.sub2.gitdir &&
+		git commit -m "Add submodules"
+	)
+'
+
+test_expect_success '`git clone` does not set extension by default' '
+	test_when_finished "rm -rf repo-clone-no-ext" &&
+	git clone upstream repo-clone-no-ext &&
+	(
+		cd repo-clone-no-ext &&
+
+		test_must_fail git config extensions.submodulePathConfig &&
+		test_path_is_missing .git/modules/sub1 &&
+		test_path_is_missing .git/modules/sub2 &&
+
+		# create a submodule and check gitdir is not created
+		git submodule add ../sub sub3 &&
+		test_must_fail git config submodule.sub3.gitdir
+	)
+'
+
+test_expect_success '`git clone --recurse-submodules` does not set extension by default' '
+	test_when_finished "rm -rf repo-clone-no-ext" &&
+	git clone --recurse-submodules upstream repo-clone-no-ext &&
+	(
+		cd repo-clone-no-ext &&
+
+		# verify that that submodules do not have gitdir set
+		test_must_fail git config extensions.submodulePathConfig &&
+		test_path_is_dir .git/modules/sub1 &&
+		test_must_fail git config submodule.sub1.gitdir &&
+		test_path_is_dir .git/modules/sub2 &&
+		test_must_fail git config submodule.sub2.gitdir &&
+
+		# create another submodule and check that gitdir is not created
+		git submodule add ../sub sub3 &&
+		test_path_is_dir .git/modules/sub3 &&
+		test_must_fail git config submodule.sub3.gitdir
+	)
+
+'
+
+test_expect_success '`git clone` respects init.defaultSubmodulePathConfig' '
+	test_when_finished "rm -rf repo-clone" &&
+	git config --global init.defaultSubmodulePathConfig true &&
+	git clone upstream repo-clone &&
+	(
+		cd repo-clone &&
+
+		# verify new repo extension is inherited from global config
+		git config extensions.submodulePathConfig > actual &&
+		echo true > expect &&
+		test_cmp expect actual &&
+
+		# new submodule has a gitdir config
+		git submodule add ../sub sub &&
+		test_path_is_dir .git/modules/sub &&
+		git config submodule.sub.gitdir > actual &&
+		echo ".git/modules/sub" > expect &&
+		test_cmp expect actual
+	) &&
+	git config --global --unset init.defaultSubmodulePathConfig
+'
+
+test_expect_success '`git clone --recurse-submodules` respects init.defaultSubmodulePathConfig' '
+	test_when_finished "rm -rf repo-clone-recursive" &&
+	git config --global init.defaultSubmodulePathConfig true &&
+	git clone  --recurse-submodules upstream repo-clone-recursive &&
+	(
+		cd repo-clone-recursive &&
+
+		# verify new repo extension is inherited from global config
+		git config extensions.submodulePathConfig > actual &&
+		echo true > expect &&
+		test_cmp expect actual &&
+
+		# previous submodules should exist
+		git config submodule.sub1.gitdir &&
+		git config submodule.sub2.gitdir &&
+		test_path_is_dir .git/modules/sub1 &&
+		test_path_is_dir .git/modules/sub2 &&
+
+		# create another submodule and check that gitdir is created
+		git submodule add ../sub new-sub &&
+		test_path_is_dir .git/modules/new-sub &&
+		git config submodule.new-sub.gitdir > actual &&
+		echo ".git/modules/new-sub" > expect &&
+		test_cmp expect actual
+	) &&
+	git config --global --unset init.defaultSubmodulePathConfig
+'
+
 test_done