diff --git a/changelog/18.added.md b/changelog/18.added.md
new file mode 100644
index 0000000..4d5f73b
--- /dev/null
+++ b/changelog/18.added.md
@@ -0,0 +1 @@
+Improved release automation: Added workflow that builds the changelog and creates/updates a PR on pushes to the default branch. Added trigger for release workflow when this PR is merged.
diff --git a/data/versions.yaml b/data/versions.yaml
index 14dfc16..cad6a6d 100644
--- a/data/versions.yaml
+++ b/data/versions.yaml
@@ -72,6 +72,12 @@ dorny/paths-filter: 'de90cc6fb38fc0963ad72b210f1f284cd68cea36  # v3.0.2'
 # renovate: datasource=git-tags depName=https://github.com/geekyeggo/delete-artifact depType=action
 geekyeggo/delete-artifact: '7ee91e82b4a7f3339cd8b14beace3d826a2aac39  # v5.1.0'
 
+# renovate: datasource=git-tags depName=https://github.com/mathieudutour/github-tag-action depType=action
+mathieudutour/github-tag-action: 'd28fa2ccfbd16e871a4bdf35e11b3ad1bd56c0c1  # v6.2'
+
+# renovate: datasource=git-tags depName=https://github.com/peter-evans/create-pull-request depType=action
+peter-evans/create-pull-request:
+
 # renovate: datasource=git-tags depName=https://github.com/pypa/gh-action-pypi-publish depType=action
 pypa/gh-action-pypi-publish: 'c44d2f0e52f028349e3ecafbf7f32561da677277  # v1.10.3'
 
diff --git a/project/tools/version.py b/project/tools/version.py
new file mode 100644
index 0000000..040c8d6
--- /dev/null
+++ b/project/tools/version.py
@@ -0,0 +1,92 @@
+"""
+Very simple heuristic to generate the next version number
+based on the current changelog news fragments.
+
+This looks for the most recent version by parsing the
+CHANGELOG.md file and increments a specific part,
+depending on the fragment types present and their contents.
+
+Major bumps are caused by:
+  * files named `.removed.md`
+  * files named `.breaking.md`
+  * files containing `BREAKING:`
+
+Minor bumps are caused by:
+  * files named `.added.md`
+
+Otherwise, only the patch version is bumped.
+"""
+
+import re
+import sys
+from pathlib import Path
+
+PROJECT_ROOT = Path(__file__).parent.parent.resolve()
+CHANGELOG_DIR = PROJECT_ROOT / "changelog"
+CHANGELOG_FILE = PROJECT_ROOT / "CHANGELOG.md"
+
+
+class Version:
+    def __init__(self, version):
+        match = re.search(r"v?(?P<release>[0-9]+(?:\.[0-9]+)*)", version)
+        if not match:
+            raise ValueError(f"Invalid version: '{version}'")
+        self.release = tuple(int(i) for i in match.group("release").split("."))
+
+    @property
+    def major(self):
+        return self._ret(0)
+
+    @property
+    def minor(self):
+        return self._ret(1)
+
+    @property
+    def patch(self):
+        return self._ret(2)
+
+    def __str__(self):
+        return ".".join(str(i) for i in self.release)
+
+    def _ret(self, cnt):
+        try:
+            return self.release[cnt]
+        except IndexError:
+            return 0
+
+
+def last_release():
+    for line in CHANGELOG_FILE.read_text(encoding="utf-8").splitlines():
+        if line.startswith("## "):
+            return Version(line.split(" ")[1])
+    return Version("0.0.0")
+
+
+def get_next_version(last):
+    major = minor = False
+
+    for fragment in CHANGELOG_DIR.glob("[!.]*"):
+        name = fragment.name.lower()
+        if ".added" in name:
+            minor = True
+        elif ".breaking" in name or ".removed" in name:
+            major = True
+            break
+        if "breaking:" in fragment.read_text(encoding="utf-8").lower():
+            major = True
+            break
+    if major:
+        return Version(f"{last.major + 1}.0.0")
+    if minor:
+        return Version(f"{last.major}.{last.minor + 1}.0")
+    return Version(f"{last.major}.{last.minor}.{last.patch + 1}")
+
+
+if __name__ == "__main__":
+    try:
+        if sys.argv[1] == "next":
+            print(get_next_version(last_release()))
+            raise SystemExit(0)
+    except IndexError:
+        pass
+    print(last_release())
diff --git a/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/ci.yml.j2 b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/ci.yml.j2
index 37bf693..c5a3bb1 100644
--- a/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/ci.yml.j2	
+++ b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/ci.yml.j2	
@@ -48,6 +48,46 @@ jobs:
       - pre-commit
     uses: ./.github/workflows/docs-action.yml
 
+  check-prepare-release:
+    name: Check if we can prepare release PR
+    if: >-
+      github.event_name == 'push' &&
+      github.ref == format('refs/heads/{0}', github.event.repository.default_branch)
+    needs:
+      - docs
+      - test
+{%- endraw %}
+    runs-on: ubuntu-{{ versions["ubuntu"] }}
+{%- raw %}
+    outputs:
+      news-fragments-available: ${{ steps.check-available.outputs.available }}
+
+    steps:
+{%- endraw %}
+      - uses: actions/checkout@{{ versions["actions/checkout"] }}
+{%- raw %}
+
+      - name: Check if news fragments are available
+        id: check-available
+        run: |
+          if [ -n "$(find changelog -type f -not -name '.*' -print -quit)" ]; then
+            echo "available=1" >> "$GITHUB_OUTPUT"
+          else
+            echo "available=0" >> "$GITHUB_OUTPUT"
+          fi
+
+  prepare-release:
+    name: Prepare Release PR
+    if: ${{ needs.check-prepare-release.outputs.news-fragments-available == '1' }}
+    needs:
+      - check-prepare-release
+      - docs
+      - test
+    permissions:
+      contents: write
+      pull-requests: write
+    uses: ./.github/workflows/prepare-release-action.yml
+
   deploy-docs:
     name: Deploy Docs
     uses: ./.github/workflows/deploy-docs-action.yml
diff --git a/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/pr.yml.j2 b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/pr.yml.j2
index d91c417..f1c8ea9 100644
--- a/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/pr.yml.j2	
+++ b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/pr.yml.j2	
@@ -22,5 +22,5 @@ jobs:
       contents: write
       id-token: write
       pages: write
-      pull-requests: read
+      pull-requests: write
 {%- endraw %}
diff --git a/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/prepare-release-action.yml.j2 b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/prepare-release-action.yml.j2
new file mode 100644
index 0000000..e9781d4
--- /dev/null
+++ b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/prepare-release-action.yml.j2	
@@ -0,0 +1,67 @@
+name: Prepare Release PR
+
+on:
+  workflow_call:
+  workflow_dispatch:
+    inputs:
+      version:
+        description: Override the autogenerated version.
+        required: false
+        default: ''
+        type: string
+
+jobs:
+  update-release:
+    name: Render changelog and create/update PR
+{%- endraw %}
+    runs-on: ubuntu-{{ versions["ubuntu"] }}
+{%- raw %}
+    if: github.ref == format('refs/heads/{0}', github.event.repository.default_branch)
+    permissions:
+      contents: write
+      pull-requests: write
+
+    steps:
+      - name: Checkout code
+{%- endraw %}
+        uses: actions/checkout@{{ versions["actions/checkout"] }}
+{%- raw %}
+
+      - name: Set up Python 3.10
+{%- endraw %}
+        uses: actions/setup-python@{{ versions["actions/setup-python"] }}
+{%- raw %}
+        with:
+          python-version: '3.10'
+
+      - name: Install project
+        run: |
+          python -m pip install --upgrade pip
+          python -m pip install -e '.[dev,docs]'
+
+      - name: Get next version
+        if: github.event_name == 'push' || inputs.version == ''
+        id: next-version
+        run: echo "version=$(python tools/version.py next)" >> "$GITHUB_OUTPUT"
+
+      - name: Update CHANGELOG.md and push to release PR
+        env:
+          NEXT_VERSION: ${{ (github.event_name == 'workflow_dispatch' && inputs.version != '') && inputs.version || steps.next-version.outputs.version }}
+        run: towncrier build --yes --version "${NEXT_VERSION}"
+
+      - name: Create/update release PR
+{%- endraw %}
+        uses: peter-evans/create-pull-request@{{ versions["peter-evans/create-pull-request"] }}
+{%- raw %}
+        with:
+          commit-message: Release v${{ (github.event_name == 'workflow_dispatch' && inputs.version != '') && inputs.version || steps.next-version.outputs.version }}
+          branch: release/auto
+          sign-commits: true
+          title: Release v${{ (github.event_name == 'workflow_dispatch' && inputs.version != '') && inputs.version || steps.next-version.outputs.version }}
+          body: |
+            This automated PR builds the latest changelog. When merged, a new release is published automatically.
+
+            If you want to rebuild this PR with a custom version or the current date, you can also trigger the corresponding workflow manually in Actions > Prepare Release > Run workflow.
+
+            You can still follow the manual release procedure outlined in: https://salt-extensions.github.io/salt-extension-copier/topics/publishing.html
+{%- endraw %}
diff --git a/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/tag.yml.j2 b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/tag.yml.j2
index 102798d..78be93c 100644
--- a/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/tag.yml.j2	
+++ b/project/{% if 'github.com' in source_url %}.github{% endif %}/workflows/tag.yml.j2	
@@ -6,37 +6,105 @@ on:
   push:
     tags:
       - "v*"  # Only tags starting with "v" for "v1.0.0", etc.
+  pull_request:
+    types:
+      - closed
 
 jobs:
-  get_tag_version:
-{%-   endraw %}
+  get_version_tag:
+    name: Extract version from tag
+{%- endraw %}
     runs-on: ubuntu-{{ versions["ubuntu"] }}
-{%-   raw %}
+{%- raw %}
+    if: github.event_name == 'push'
     outputs:
-      version: ${{ steps.get_version.outputs.version }}
+      version: ${{ steps.get_version_tag.outputs.version }}
+
     steps:
       - name: Checkout code
-{%-   endraw %}
+{%- endraw %}
         uses: actions/checkout@{{ versions["actions/checkout"] }}
-{%-   raw %}
+{%- raw %}
 
       - name: Extract tag name
-        id: get_version
+        id: get_version_tag
         run: echo "version=${GITHUB_REF#refs/tags/v}" >> "$GITHUB_OUTPUT"
 
-  call_central_workflow:
-    needs: get_tag_version
+      - name: Ensure changelog was rendered
+        run: test "${{ steps.get_version_tag.outputs.version }}" = "$(python tools/version.py)"
+
+  get_version_pr:
+    name: Extract version from merged release PR
+{%- endraw %}
+    runs-on: ubuntu-{{ versions["ubuntu"] }}
+{%- raw %}
+    permissions:
+      contents: write  # To push the new tag. This does not cause a tag event.
+
+    # Only trigger this on closed pull requests if:
+    #   - The originating branch is from the same repository as the one running this workflow.
+    #   - The originating branch is called `release/auto`
+    #   - The PR was merged, not just closed.
+    #   - The PR targeted the default branch of the repository this workflow is running from.
+    if: >-
+      github.event_name == 'pull_request' &&
+      github.repository == github.event.pull_request.head.repo.full_name &&
+      github.head_ref == 'release/auto' &&
+      github.event.pull_request.merged == true &&
+      github.base_ref == github.event.repository.default_branch
+
+    outputs:
+      version: ${{ steps.get_version_pr.outputs.version }}
+
+    steps:
+      - name: Checkout code
+{%- endraw %}
+        uses: actions/checkout@{{ versions["actions/checkout"] }}
+{%- raw %}
+
+      - name: Extract version of merged release PR
+        id: get_version_pr
+        run: echo "version=$(python tools/version.py)" >> "$GITHUB_OUTPUT"
+
+      - name: Ensure no news fragments are left
+        run: test -z "$(find changelog -type f -not -path '*/.*' -print -quit)"
+
+      - name: Check extracted version matches PR title
+        env:
+          TITLE: ${{ github.event.pull_request.title }}
+        run: >-
+          [[ "$TITLE" == "Release v${{ steps.get_version_pr.outputs.version }}" ]] || exit 1
+
+      - name: Create tag for release
 {%- endraw %}
+        uses: mathieudutour/github-tag-action@{{ versions["mathieudutour/github-tag-action"] }}
+{%- raw %}
+        with:
+          github_token: ${{ github.token }}
+          custom_tag: ${{ steps.get_version_pr.outputs.version }}
+
+  call_central_workflow:
+    # Only call the central workflow if either of the above jobs report success.
+    if: >-
+      always() &&
+      (
+        needs.get_version_tag.result == 'success' ||
+        needs.get_version_pr.result == 'success'
+      )
+    needs:
+      - get_version_tag
+      - get_version_pr
     uses: ./.github/workflows/ci.yml
+{%- endraw %}
     with:
       deploy-docs: {{ (deploy_docs in ["rolling", "release"]) | lower }}
 {%- raw %}
       release: true
-      version: ${{ needs.get_tag_version.outputs.version }}
+      version: ${{ github.event_name == 'push' && needs.get_version_tag.outputs.version || needs.get_version_pr.outputs.version }}
     permissions:
       contents: write
       id-token: write
       pages: write
-      pull-requests: read
+      pull-requests: write
     secrets: inherit
 {%- endraw %}