diff --git a/common/changes/@microsoft/rush/add-useDirectFileTransfersForBuildCache-to-template_2026-07-20-18-21-19.json b/common/changes/@microsoft/rush/add-useDirectFileTransfersForBuildCache-to-template_2026-07-20-18-21-19.json
new file mode 100644
index 0000000000..f7376a0188
--- /dev/null
+++ b/common/changes/@microsoft/rush/add-useDirectFileTransfersForBuildCache-to-template_2026-07-20-18-21-19.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@microsoft/rush",
+      "comment": "Add `useDirectFileTransfersForBuildCache` to the `experiments.json` `rush init` template.",
+      "type": "none"
+    }
+  ],
+  "packageName": "@microsoft/rush"
+}
\ No newline at end of file
diff --git a/libraries/rush-lib/assets/rush-init/common/config/rush/experiments.json b/libraries/rush-lib/assets/rush-init/common/config/rush/experiments.json
index b5b8d5797a..1bead4b105 100644
--- a/libraries/rush-lib/assets/rush-init/common/config/rush/experiments.json
+++ b/libraries/rush-lib/assets/rush-init/common/config/rush/experiments.json
@@ -132,5 +132,14 @@
    * exist in the Rush configuration, or if change files target a project that belongs to a lockstepped
    * version policy but is not the policy's main project.
    */
-  /*[LINE "HYPOTHETICAL"]*/ "strictChangefileValidation": true
+  /*[LINE "HYPOTHETICAL"]*/ "strictChangefileValidation": true,
+
+  /**
+   * If true, the build cache will use file-based APIs to transfer cache entries to and from cloud storage.
+   * This avoids loading the entire cache entry into memory, which can prevent out-of-memory errors for large
+   * build outputs and allow cache entries to exceed the limit of a single Buffer. The cloud cache provider plugin
+   * must implement the optional file-based methods for this to take effect; otherwise it falls back to the
+   * buffer-based approach.
+   */
+  /*[LINE "HYPOTHETICAL"]*/ "useDirectFileTransfersForBuildCache": true
 }