diff --git a/.wsignore b/.wsignore
index 56898bdba3..245b66b555 100644
--- a/.wsignore
+++ b/.wsignore
@@ -25,7 +25,6 @@ acceptance/bundle/artifacts/shell/err-sh/output.txt
 acceptance/bundle/templates-machinery/helpers-error/output.txt
 
 # "bundle deploy" with apps has trailing whitespace:
-acceptance/bundle/apps/config_section/output.txt
 integration/bundle/testdata/apps/bundle_deploy.txt
 
 # Extra whitespace in test output:
diff --git a/NEXT_CHANGELOG.md b/NEXT_CHANGELOG.md
index 22aef9f5a6..2cfb16d1e9 100644
--- a/NEXT_CHANGELOG.md
+++ b/NEXT_CHANGELOG.md
@@ -9,6 +9,7 @@
 ### Dependency updates
 
 ### Bundles
+* Remove resources.apps.config section ([#3680](https://github.com/databricks/cli/pull/3680))
 * Prompt for serverless compute in `dbt-sql` template (defaults to `yes`) ([#3668](https://github.com/databricks/cli/pull/3668))
 
 ### API Changes
diff --git a/acceptance/bundle/apps/config_section/app/app.py b/acceptance/bundle/apps/config_section/app/app.py
deleted file mode 100644
index f1a18139c8..0000000000
--- a/acceptance/bundle/apps/config_section/app/app.py
+++ /dev/null
@@ -1 +0,0 @@
-print("Hello world!")
diff --git a/acceptance/bundle/apps/config_section/databricks.yml b/acceptance/bundle/apps/config_section/databricks.yml
deleted file mode 100644
index 2662d75f00..0000000000
--- a/acceptance/bundle/apps/config_section/databricks.yml
+++ /dev/null
@@ -1,9 +0,0 @@
-resources:
-  apps:
-    myapp:
-      name: myapp
-      source_code_path: ./app
-      config:
-        command:
-          - python
-          - app.py
diff --git a/acceptance/bundle/apps/config_section/out.app.yml.txt b/acceptance/bundle/apps/config_section/out.app.yml.txt
deleted file mode 100644
index 6d74c282a2..0000000000
--- a/acceptance/bundle/apps/config_section/out.app.yml.txt
+++ /dev/null
@@ -1,5 +0,0 @@
-{
-  "method": "POST",
-  "path": "/api/2.0/workspace-files/import-file/Workspace/Users/[USERNAME]/.bundle/test-bundle/default/files/app/app.yml",
-  "raw_body": "command:\n  - python\n  - app.py\n"
-}
diff --git a/acceptance/bundle/apps/config_section/out.test.toml b/acceptance/bundle/apps/config_section/out.test.toml
deleted file mode 100644
index e092fd5ed6..0000000000
--- a/acceptance/bundle/apps/config_section/out.test.toml
+++ /dev/null
@@ -1,5 +0,0 @@
-Local = true
-Cloud = false
-
-[EnvMatrix]
-  DATABRICKS_BUNDLE_ENGINE = ["terraform", "direct-exp"]
diff --git a/acceptance/bundle/apps/config_section/output.txt b/acceptance/bundle/apps/config_section/output.txt
deleted file mode 100644
index 32776248d0..0000000000
--- a/acceptance/bundle/apps/config_section/output.txt
+++ /dev/null
@@ -1,23 +0,0 @@
-
->>> [CLI] bundle validate
-Warning: App config section detected
-
-remove 'config' from app resource 'myapp' section and use app.yml file in the root of this app instead
-
-Name: test-bundle
-Target: default
-Workspace:
-  User: [USERNAME]
-  Path: /Workspace/Users/[USERNAME]/.bundle/test-bundle/default
-
-Found 1 warning
-
->>> [CLI] bundle deploy
-Warning: App config section detected
-
-remove 'config' from app resource 'myapp' section and use app.yml file in the root of this app instead
-
-Uploading bundle files to /Workspace/Users/[USERNAME]/.bundle/test-bundle/default/files...
-Deploying resources...
-Updating deployment state...
-Deployment complete!
diff --git a/acceptance/bundle/apps/config_section/script b/acceptance/bundle/apps/config_section/script
deleted file mode 100644
index b80cd910c0..0000000000
--- a/acceptance/bundle/apps/config_section/script
+++ /dev/null
@@ -1,4 +0,0 @@
-trace $CLI bundle validate
-trace $CLI bundle deploy
-jq 'select(.path | test("default/files/app/app.yml"))' out.requests.txt  > out.app.yml.txt
-rm out.requests.txt
diff --git a/acceptance/bundle/refschema/out.fields.txt b/acceptance/bundle/refschema/out.fields.txt
index 513ecea1f1..874b95e3db 100644
--- a/acceptance/bundle/refschema/out.fields.txt
+++ b/acceptance/bundle/refschema/out.fields.txt
@@ -74,8 +74,6 @@ resources.apps.*.budget_policy_id	string	ALL
 resources.apps.*.compute_status	*apps.ComputeStatus	ALL
 resources.apps.*.compute_status.message	string	ALL
 resources.apps.*.compute_status.state	apps.ComputeState	ALL
-resources.apps.*.config	map[string]any	INPUT
-resources.apps.*.config.*	any	INPUT
 resources.apps.*.create_time	string	ALL
 resources.apps.*.creator	string	ALL
 resources.apps.*.default_source_code_path	string	ALL
diff --git a/bundle/apps/interpolate_variables.go b/bundle/apps/interpolate_variables.go
deleted file mode 100644
index da7dadf471..0000000000
--- a/bundle/apps/interpolate_variables.go
+++ /dev/null
@@ -1,45 +0,0 @@
-package apps
-
-import (
-	"context"
-
-	"github.com/databricks/cli/bundle"
-	"github.com/databricks/cli/bundle/deploy/terraform"
-	"github.com/databricks/cli/libs/diag"
-	"github.com/databricks/cli/libs/dyn"
-	"github.com/databricks/cli/libs/dyn/dynvar"
-)
-
-type interpolateVariables struct{}
-
-func (i *interpolateVariables) Apply(ctx context.Context, b *bundle.Bundle) diag.Diagnostics {
-	pattern := dyn.NewPattern(
-		dyn.Key("resources"),
-		dyn.Key("apps"),
-		dyn.AnyKey(),
-		dyn.Key("config"),
-	)
-
-	err := b.Config.Mutate(func(root dyn.Value) (dyn.Value, error) {
-		return dyn.MapByPattern(root, pattern, func(p dyn.Path, v dyn.Value) (dyn.Value, error) {
-			return dynvar.Resolve(v, func(path dyn.Path) (dyn.Value, error) {
-				key, ok := terraform.TerraformToGroupName[path[0].Key()]
-				if ok {
-					path = dyn.NewPath(dyn.Key("resources"), dyn.Key(key)).Append(path[1:]...)
-				}
-
-				return dyn.GetByPath(root, path)
-			})
-		})
-	})
-
-	return diag.FromErr(err)
-}
-
-func (i *interpolateVariables) Name() string {
-	return "apps.InterpolateVariables"
-}
-
-func InterpolateVariables() bundle.Mutator {
-	return &interpolateVariables{}
-}
diff --git a/bundle/apps/interpolate_variables_test.go b/bundle/apps/interpolate_variables_test.go
deleted file mode 100644
index 05fc26dd95..0000000000
--- a/bundle/apps/interpolate_variables_test.go
+++ /dev/null
@@ -1,49 +0,0 @@
-package apps
-
-import (
-	"context"
-	"testing"
-
-	"github.com/databricks/cli/bundle"
-	"github.com/databricks/cli/bundle/config"
-	"github.com/databricks/cli/bundle/config/resources"
-	"github.com/databricks/databricks-sdk-go/service/apps"
-	"github.com/stretchr/testify/require"
-)
-
-func TestAppInterpolateVariables(t *testing.T) {
-	b := &bundle.Bundle{
-		Config: config.Root{
-			Resources: config.Resources{
-				Apps: map[string]*resources.App{
-					"my_app_1": {
-						App: apps.App{
-							Name: "my_app_1",
-						},
-						Config: map[string]any{
-							"command": []string{"echo", "hello"},
-							"env": []map[string]string{
-								{"name": "JOB_ID", "value": "${databricks_job.my_job.id}"},
-							},
-						},
-					},
-					"my_app_2": {
-						App: apps.App{
-							Name: "my_app_2",
-						},
-					},
-				},
-				Jobs: map[string]*resources.Job{
-					"my_job": {
-						BaseResource: resources.BaseResource{ID: "123"},
-					},
-				},
-			},
-		},
-	}
-
-	diags := bundle.Apply(context.Background(), b, InterpolateVariables())
-	require.Empty(t, diags)
-	require.Equal(t, []any{map[string]any{"name": "JOB_ID", "value": "123"}}, b.Config.Resources.Apps["my_app_1"].Config["env"])
-	require.Nil(t, b.Config.Resources.Apps["my_app_2"].Config)
-}
diff --git a/bundle/apps/upload_config.go b/bundle/apps/upload_config.go
deleted file mode 100644
index 82d4a76301..0000000000
--- a/bundle/apps/upload_config.go
+++ /dev/null
@@ -1,93 +0,0 @@
-package apps
-
-import (
-	"bytes"
-	"context"
-	"fmt"
-	"path"
-	"strings"
-
-	"github.com/databricks/cli/bundle"
-	"github.com/databricks/cli/bundle/config/resources"
-	"github.com/databricks/cli/bundle/deploy"
-	"github.com/databricks/cli/libs/diag"
-	"github.com/databricks/cli/libs/filer"
-	"github.com/databricks/cli/libs/logdiag"
-	"golang.org/x/sync/errgroup"
-
-	"gopkg.in/yaml.v3"
-)
-
-type uploadConfig struct {
-	filerFactory deploy.FilerFactory
-}
-
-func (u *uploadConfig) Apply(ctx context.Context, b *bundle.Bundle) diag.Diagnostics {
-	errGroup, ctx := errgroup.WithContext(ctx)
-
-	for key, app := range b.Config.Resources.Apps {
-		// If the app has a config, we need to deploy it first.
-		// It means we need to write app.yml file with the content of the config field
-		// to the remote source code path of the app.
-		if app.Config != nil {
-			appPath := strings.TrimPrefix(app.SourceCodePath, b.Config.Workspace.FilePath)
-
-			buf, err := configToYaml(app)
-			if err != nil {
-				return diag.FromErr(err)
-			}
-
-			f, err := u.filerFactory(b)
-			if err != nil {
-				return diag.FromErr(err)
-			}
-
-			errGroup.Go(func() error {
-				err := f.Write(ctx, path.Join(appPath, "app.yml"), buf, filer.OverwriteIfExists)
-				if err != nil {
-					logdiag.LogDiag(ctx, diag.Diagnostic{
-						Severity:  diag.Error,
-						Summary:   "Failed to save config",
-						Detail:    fmt.Sprintf("Failed to write %s file: %s", path.Join(app.SourceCodePath, "app.yml"), err),
-						Locations: b.Config.GetLocations("resources.apps." + key),
-					})
-				}
-				return nil
-			})
-		}
-	}
-
-	if err := errGroup.Wait(); err != nil {
-		logdiag.LogError(ctx, err)
-	}
-
-	return nil
-}
-
-// Name implements bundle.Mutator.
-func (u *uploadConfig) Name() string {
-	return "apps:UploadConfig"
-}
-
-func UploadConfig() bundle.Mutator {
-	return &uploadConfig{
-		filerFactory: func(b *bundle.Bundle) (filer.Filer, error) {
-			return filer.NewWorkspaceFilesClient(b.WorkspaceClient(), b.Config.Workspace.FilePath)
-		},
-	}
-}
-
-func configToYaml(app *resources.App) (*bytes.Buffer, error) {
-	buf := bytes.NewBuffer(nil)
-	enc := yaml.NewEncoder(buf)
-	enc.SetIndent(2)
-
-	err := enc.Encode(app.Config)
-	defer enc.Close()
-
-	if err != nil {
-		return nil, fmt.Errorf("failed to encode app config to yaml: %w", err)
-	}
-
-	return buf, nil
-}
diff --git a/bundle/apps/upload_config_test.go b/bundle/apps/upload_config_test.go
deleted file mode 100644
index cf481336cb..0000000000
--- a/bundle/apps/upload_config_test.go
+++ /dev/null
@@ -1,75 +0,0 @@
-package apps
-
-import (
-	"bytes"
-	"context"
-	"os"
-	"path/filepath"
-	"testing"
-
-	"github.com/databricks/cli/bundle"
-	"github.com/databricks/cli/bundle/config"
-	"github.com/databricks/cli/bundle/config/mutator"
-	"github.com/databricks/cli/bundle/config/resources"
-	"github.com/databricks/cli/bundle/internal/bundletest"
-	mockfiler "github.com/databricks/cli/internal/mocks/libs/filer"
-	"github.com/databricks/cli/libs/dyn"
-	"github.com/databricks/cli/libs/filer"
-	"github.com/databricks/cli/libs/vfs"
-	"github.com/databricks/databricks-sdk-go/service/apps"
-	"github.com/stretchr/testify/mock"
-	"github.com/stretchr/testify/require"
-)
-
-func TestAppUploadConfig(t *testing.T) {
-	root := t.TempDir()
-	err := os.MkdirAll(filepath.Join(root, "my_app"), 0o700)
-	require.NoError(t, err)
-
-	b := &bundle.Bundle{
-		BundleRootPath: root,
-		SyncRootPath:   root,
-		SyncRoot:       vfs.MustNew(root),
-		Config: config.Root{
-			Workspace: config.Workspace{
-				RootPath: "/Workspace/Users/foo@bar.com/",
-			},
-			Resources: config.Resources{
-				Apps: map[string]*resources.App{
-					"my_app": {
-						App: apps.App{
-							Name: "my_app",
-						},
-						SourceCodePath: "./my_app",
-						Config: map[string]any{
-							"command": []string{"echo", "hello"},
-							"env": []map[string]string{
-								{"name": "MY_APP", "value": "my value"},
-							},
-						},
-					},
-				},
-			},
-		},
-	}
-
-	mockFiler := mockfiler.NewMockFiler(t)
-	mockFiler.EXPECT().Write(mock.Anything, "my_app/app.yml", bytes.NewBufferString(`command:
-  - echo
-  - hello
-env:
-  - name: MY_APP
-    value: my value
-`), filer.OverwriteIfExists).Return(nil)
-
-	u := uploadConfig{
-		filerFactory: func(b *bundle.Bundle) (filer.Filer, error) {
-			return mockFiler, nil
-		},
-	}
-
-	bundletest.SetLocation(b, ".", []dyn.Location{{File: filepath.Join(root, "databricks.yml")}})
-
-	diags := bundle.ApplySeq(context.Background(), b, mutator.TranslatePaths(), &u)
-	require.NoError(t, diags.Error())
-}
diff --git a/bundle/apps/validate.go b/bundle/apps/validate.go
index 4e743c00a9..33de3cf77e 100644
--- a/bundle/apps/validate.go
+++ b/bundle/apps/validate.go
@@ -34,14 +34,6 @@ func (v *validate) Apply(ctx context.Context, b *bundle.Bundle) diag.Diagnostics
 			})
 		}
 		usedSourceCodePaths[app.SourceCodePath] = key
-
-		if app.Config != nil {
-			diags = append(diags, diag.Diagnostic{
-				Severity: diag.Warning,
-				Summary:  "App config section detected",
-				Detail:   fmt.Sprintf("remove 'config' from app resource '%s' section and use app.yml file in the root of this app instead", key),
-			})
-		}
 	}
 
 	return diags
diff --git a/bundle/config/mutator/log_resource_references_test.go b/bundle/config/mutator/log_resource_references_test.go
index d91885cb0a..c22b50e9ca 100644
--- a/bundle/config/mutator/log_resource_references_test.go
+++ b/bundle/config/mutator/log_resource_references_test.go
@@ -28,13 +28,6 @@ func TestConvertReferenceToMetric_Table(t *testing.T) {
 
 				"niljob": nil,
 			},
-			Apps: map[string]*cres.App{
-				"app1": {
-					Config: map[string]any{
-						"k": "v",
-					},
-				},
-			},
 		},
 	}
 
@@ -73,11 +66,6 @@ func TestConvertReferenceToMetric_Table(t *testing.T) {
 			ref:  "resources.jobs",
 			want: "",
 		},
-		{
-			name: "mapkey censor on app config",
-			ref:  "resources.apps.app1.config.foo",
-			want: "resref_apps.config.*",
-		},
 		{
 			name: "nil job pointer yields plain id",
 			ref:  "resources.jobs.niljob.id",
diff --git a/bundle/config/resources/apps.go b/bundle/config/resources/apps.go
index 177c242e5b..875ecfe476 100644
--- a/bundle/config/resources/apps.go
+++ b/bundle/config/resources/apps.go
@@ -30,12 +30,6 @@ type App struct {
 	// on local disk and to the corresponding workspace path during app deployment.
 	SourceCodePath string `json:"source_code_path"`
 
-	// Config is an optional field which allows configuring the app following Databricks app configuration format like in app.yml.
-	// When this field is set, DABs read the configuration set in this field and write
-	// it to app.yml in the root of the source code folder in Databricks workspace.
-	// If there's app.yml defined locally, DABs will raise an error.
-	Config map[string]any `json:"config,omitempty"`
-
 	Permissions []AppPermission `json:"permissions,omitempty"`
 }
 
diff --git a/bundle/deploy/terraform/tfdyn/convert_app_test.go b/bundle/deploy/terraform/tfdyn/convert_app_test.go
index f95a6419a5..662c172fb9 100644
--- a/bundle/deploy/terraform/tfdyn/convert_app_test.go
+++ b/bundle/deploy/terraform/tfdyn/convert_app_test.go
@@ -16,9 +16,6 @@ import (
 func TestConvertApp(t *testing.T) {
 	src := resources.App{
 		SourceCodePath: "./app",
-		Config: map[string]any{
-			"command": []string{"python", "app.py"},
-		},
 		App: apps.App{
 			Name:        "app_id",
 			Description: "app description",
@@ -101,9 +98,6 @@ func TestConvertApp(t *testing.T) {
 func TestConvertAppWithNoDescription(t *testing.T) {
 	src := resources.App{
 		SourceCodePath: "./app",
-		Config: map[string]any{
-			"command": []string{"python", "app.py"},
-		},
 		App: apps.App{
 			Name: "app_id",
 			Resources: []apps.AppResource{
diff --git a/bundle/phases/deploy.go b/bundle/phases/deploy.go
index 40d930b6f4..ea012d057e 100644
--- a/bundle/phases/deploy.go
+++ b/bundle/phases/deploy.go
@@ -5,7 +5,6 @@ import (
 	"errors"
 
 	"github.com/databricks/cli/bundle"
-	"github.com/databricks/cli/bundle/apps"
 	"github.com/databricks/cli/bundle/artifacts"
 	"github.com/databricks/cli/bundle/config"
 	"github.com/databricks/cli/bundle/deploy"
@@ -114,13 +113,6 @@ func deployCore(ctx context.Context, b *bundle.Bundle, plan *deployplan.Plan) {
 
 	bundle.ApplySeqContext(ctx, b,
 		statemgmt.Load(),
-
-		// TODO: this does terraform specific transformation.
-		apps.InterpolateVariables(),
-
-		// TODO: this should either be part of app resource or separate AppConfig resource that depends on main resource.
-		apps.UploadConfig(),
-
 		metadata.Compute(),
 		metadata.Upload(),
 	)
diff --git a/bundle/run/app_test.go b/bundle/run/app_test.go
index 0d3d325d93..d1ca6c0adc 100644
--- a/bundle/run/app_test.go
+++ b/bundle/run/app_test.go
@@ -59,12 +59,6 @@ func setupBundle(t *testing.T) (context.Context, *bundle.Bundle, *mocks.MockWork
 							Name: "my_app",
 						},
 						SourceCodePath: "./my_app",
-						Config: map[string]any{
-							"command": []string{"echo", "hello"},
-							"env": []map[string]string{
-								{"name": "MY_APP", "value": "my value"},
-							},
-						},
 					},
 				},
 			},
diff --git a/bundle/schema/jsonschema.json b/bundle/schema/jsonschema.json
index 6a64910fcd..769bb94427 100644
--- a/bundle/schema/jsonschema.json
+++ b/bundle/schema/jsonschema.json
@@ -80,9 +80,6 @@
                         "$ref": "#/$defs/github.com/databricks/databricks-sdk-go/service/apps.ComputeStatus",
                         "doNotSuggest": true
                       },
-                      "config": {
-                        "$ref": "#/$defs/map/interface"
-                      },
                       "create_time": {
                         "description": "The creation time of the app. Formatted timestamp in ISO 6801.",
                         "$ref": "#/$defs/string",
@@ -9634,20 +9631,6 @@
           }
         }
       },
-      "interface": {
-        "oneOf": [
-          {
-            "type": "object",
-            "additionalProperties": {
-              "$ref": "#/$defs/interface"
-            }
-          },
-          {
-            "type": "string",
-            "pattern": "\\$\\{(var(\\.[a-zA-Z]+([-_]?[a-zA-Z0-9]+)*(\\[[0-9]+\\])*)+)\\}"
-          }
-        ]
-      },
       "string": {
         "oneOf": [
           {