diff --git a/sdk/python/feast/errors.py b/sdk/python/feast/errors.py
index 84a9f12ec4..abd195f8a3 100644
--- a/sdk/python/feast/errors.py
+++ b/sdk/python/feast/errors.py
@@ -210,6 +210,14 @@ def __init__(self, registry_type: str):
         )
 
 
+class FeastFileRegistryPathNotAbsoluteError(FeastError):
+    def __init__(self, path: str):
+        super().__init__(
+            f"File registry path was set to {path}, which is a relative path. "
+            "Please, specify the absolute path of the registry file in the feature_store.yaml"
+        )
+
+
 class FeastModuleImportError(FeastError):
     def __init__(self, module_name: str, class_name: str):
         super().__init__(
diff --git a/sdk/python/feast/repo_config.py b/sdk/python/feast/repo_config.py
index 185a8723ad..f231071a79 100644
--- a/sdk/python/feast/repo_config.py
+++ b/sdk/python/feast/repo_config.py
@@ -20,6 +20,7 @@
 
 from feast.errors import (
     FeastFeatureServerTypeInvalidError,
+    FeastFileRegistryPathNotAbsoluteError,
     FeastInvalidAuthConfigClass,
     FeastOfflineStoreInvalidName,
     FeastOnlineStoreInvalidName,
@@ -166,6 +167,15 @@ def validate_path(cls, path: str, values: ValidationInfo) -> str:
                     "explicitely to `path`."
                 )
                 return path.replace("postgresql://", "postgresql+psycopg://")
+
+        if values.data.get("registry_type") == "file":
+            is_local_file_registry = not (
+                path.startswith("s3://") or path.startswith("gs://")
+            )
+            is_relative_path = not os.path.isabs(path)
+            if is_local_file_registry and is_relative_path:
+                raise FeastFileRegistryPathNotAbsoluteError(str(path))
+
         return path
 
 
diff --git a/sdk/python/feast/repo_operations.py b/sdk/python/feast/repo_operations.py
index 4db0bbc6fd..ef45bbafa6 100644
--- a/sdk/python/feast/repo_operations.py
+++ b/sdk/python/feast/repo_operations.py
@@ -486,11 +486,28 @@ def init_repo(repo_name: str, template: str):
         os.remove(bootstrap_path)
 
     # Template the feature_store.yaml file
-    feature_store_yaml_path = repo_path / "feature_repo" / "feature_store.yaml"
+    feature_repo_path = repo_path / "feature_repo"
+    feature_store_yaml_path = feature_repo_path / "feature_store.yaml"
+
+    # user-defined project name
     replace_str_in_file(
         feature_store_yaml_path, "project: my_project", f"project: {repo_name}"
     )
 
+    # registry: replace relative path from template with absolute path
+    replace_str_in_file(
+        feature_store_yaml_path,
+        "registry: data/registry.db",
+        f"registry: {feature_repo_path}/data/registry.db",
+    )
+
+    # online store: replace relative path from template with absolute path
+    replace_str_in_file(
+        feature_store_yaml_path,
+        "path: data/online_store.db",
+        f"path: {feature_repo_path}/data/online_store.db",
+    )
+
     # Remove the __pycache__ folder if it exists
     import shutil