diff --git a/src/init-action.ts b/src/init-action.ts
index 8d02aafe1..b6884dc34 100644
--- a/src/init-action.ts
+++ b/src/init-action.ts
@@ -58,7 +58,7 @@ import {
 } from "./overlay/caching";
 import { OverlayDatabaseMode } from "./overlay/overlay-database-mode";
 import { getRepositoryNwo } from "./repository";
-import { resolveToolsInput } from "./resolve-tools-input";
+import { resolveToolsInput } from "./config/resolve-tools-input";
 import { ToolsSource } from "./setup-codeql";
 import {
   ActionName,
diff --git a/src/resolve-tools-input.test.ts b/src/resolve-tools-input.test.ts
deleted file mode 100644
index c9c00beba..000000000
--- a/src/resolve-tools-input.test.ts
+++ /dev/null
@@ -1,145 +0,0 @@
-import test from "ava";
-
-import { RepositoryPropertyName } from "./feature-flags/properties";
-import type { RepositoryProperties } from "./feature-flags/properties";
-import { resolveToolsInput } from "./resolve-tools-input";
-import { getRecordingLogger, LoggedMessage, setupTests } from "./testing-utils";
-
-setupTests(test);
-
-test("resolveToolsInput returns undefined when no tools input or repository property is set", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const result = resolveToolsInput(undefined, true, {}, logger);
-
-  t.is(result, undefined);
-  t.is(loggedMessages.length, 0);
-});
-
-test("resolveToolsInput returns workflow input when only workflow input is provided", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const result = resolveToolsInput("latest", true, {}, logger);
-
-  t.is(result, "latest");
-  t.is(loggedMessages.length, 1);
-  t.is(
-    loggedMessages[0].message,
-    "Setting tools: latest based on workflow input.",
-  );
-});
-
-test("resolveToolsInput returns repository property when only repository property is provided", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const repositoryProperties: RepositoryProperties = {
-    [RepositoryPropertyName.TOOLS]: "toolcache",
-  };
-  const result = resolveToolsInput(
-    undefined,
-    true,
-    repositoryProperties,
-    logger,
-  );
-
-  t.is(result, "toolcache");
-  t.is(loggedMessages.length, 1);
-  t.is(
-    loggedMessages[0].message,
-    "Setting tools: toolcache based on the 'github-codeql-tools' repository property.",
-  );
-});
-
-test("resolveToolsInput prioritizes workflow input over repository property", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const repositoryProperties: RepositoryProperties = {
-    [RepositoryPropertyName.TOOLS]: "toolcache",
-  };
-  const result = resolveToolsInput(
-    "nightly",
-    true,
-    repositoryProperties,
-    logger,
-  );
-
-  t.is(result, "nightly");
-  t.is(loggedMessages.length, 1);
-  t.is(
-    loggedMessages[0].message,
-    "Setting tools: nightly based on workflow input.",
-  );
-});
-
-test("resolveToolsInput treats empty string workflow input as not set", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const repositoryProperties: RepositoryProperties = {
-    [RepositoryPropertyName.TOOLS]: "toolcache",
-  };
-  const result = resolveToolsInput("", true, repositoryProperties, logger);
-
-  t.is(result, "toolcache");
-  t.is(loggedMessages.length, 1);
-  t.is(
-    loggedMessages[0].message,
-    "Setting tools: toolcache based on the 'github-codeql-tools' repository property.",
-  );
-});
-
-test("resolveToolsInput returns undefined when repository property is undefined", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const repositoryProperties: RepositoryProperties = {
-    [RepositoryPropertyName.TOOLS]: undefined,
-  };
-  const result = resolveToolsInput(
-    undefined,
-    true,
-    repositoryProperties,
-    logger,
-  );
-
-  t.is(result, undefined);
-  t.is(loggedMessages.length, 0);
-});
-
-test("resolveToolsInput ignores repository property when fallback is disabled", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const repositoryProperties: RepositoryProperties = {
-    [RepositoryPropertyName.TOOLS]: "toolcache",
-  };
-  const result = resolveToolsInput(
-    undefined,
-    false,
-    repositoryProperties,
-    logger,
-  );
-
-  t.is(result, undefined);
-  t.is(loggedMessages.length, 1);
-  const fallbackDisabledMessage = String(loggedMessages[0].message);
-  t.true(
-    /Ignoring 'github-codeql-tools' repository property because it is only supported for dynamic workflows\./.test(
-      fallbackDisabledMessage,
-    ),
-  );
-});
-
-test("resolveToolsInput does not log when fallback is disabled and repository property is not set", (t) => {
-  const loggedMessages: LoggedMessage[] = [];
-  const logger = getRecordingLogger(loggedMessages);
-
-  const result = resolveToolsInput(undefined, false, {}, logger);
-
-  t.is(result, undefined);
-  t.is(loggedMessages.length, 0);
-});
diff --git a/src/resolve-tools-input.ts b/src/resolve-tools-input.ts
deleted file mode 100644
index 9ae25e5b9..000000000
--- a/src/resolve-tools-input.ts
+++ /dev/null
@@ -1,50 +0,0 @@
-import {
-  RepositoryProperties,
-  RepositoryPropertyName,
-} from "./feature-flags/properties";
-import { Logger } from "./logging";
-
-/**
- * Resolves the effective tools input by combining the workflow input and repository properties.
- * The explicit `tools` workflow input takes precedence. If none is provided,
- * falls back to the repository property (if set and enabled for this workflow).
- *
- * @param toolsWorkflowInput - The value of the `tools` workflow input, if provided.
- * @param allowRepositoryPropertyFallback - Whether the repository property fallback is enabled.
- * @param repositoryProperties - The parsed repository properties.
- * @param logger - Logger for outputting resolution messages.
- * @returns The effective tools input value.
- */
-export function resolveToolsInput(
-  toolsWorkflowInput: string | undefined,
-  allowRepositoryPropertyFallback: boolean,
-  repositoryProperties: RepositoryProperties,
-  logger: Logger,
-): string | undefined {
-  if (toolsWorkflowInput) {
-    logger.info(
-      `Setting tools: ${toolsWorkflowInput} based on workflow input.`,
-    );
-    return toolsWorkflowInput;
-  }
-
-  const toolsPropertyValue = repositoryProperties[RepositoryPropertyName.TOOLS];
-
-  if (!allowRepositoryPropertyFallback) {
-    if (toolsPropertyValue) {
-      logger.info(
-        `No explicit tools input was provided. Ignoring '${RepositoryPropertyName.TOOLS}' repository property because it is only supported for dynamic workflows.`,
-      );
-    }
-    return undefined;
-  }
-
-  if (toolsPropertyValue) {
-    logger.info(
-      `Setting tools: ${toolsPropertyValue} based on the '${RepositoryPropertyName.TOOLS}' repository property.`,
-    );
-    return toolsPropertyValue;
-  }
-
-  return undefined;
-}
diff --git a/src/setup-codeql-action.ts b/src/setup-codeql-action.ts
index ef30cebe8..f31605f88 100644
--- a/src/setup-codeql-action.ts
+++ b/src/setup-codeql-action.ts
@@ -18,7 +18,7 @@ import { loadRepositoryProperties } from "./feature-flags/properties";
 import { initCodeQL } from "./init";
 import { getActionsLogger, Logger } from "./logging";
 import { getRepositoryNwo } from "./repository";
-import { resolveToolsInput } from "./resolve-tools-input";
+import { resolveToolsInput } from "./config/resolve-tools-input";
 import { ToolsSource } from "./setup-codeql";
 import {
   ActionName,