diff --git a/CHANGELOG.md b/CHANGELOG.md
index 4b88b73895..5519d1df6c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -23,6 +23,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - feat!: refactor event collection configuration [#2444]
 - fix(logs): configure fluentbit to send data to metadata-logs [#2610]
 - feat(logs): Changing the default logs metadata provider to otel [#2621]
+- chore!: remove replacing values in configuration marked by 'replace' suffix [#2615]
 
 ### Changed
 
@@ -73,6 +74,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 [#2610]: https://github.com/SumoLogic/sumologic-kubernetes-collection/pull/2610
 [#2619]: https://github.com/SumoLogic/sumologic-kubernetes-collection/pull/2619
 [#2621]: https://github.com/SumoLogic/sumologic-kubernetes-collection/pull/2621
+[#2615]: https://github.com/SumoLogic/sumologic-kubernetes-collection/pull/2615
 [Unreleased]: https://github.com/SumoLogic/sumologic-kubernetes-collection/compare/v2.17.0...main
 [telegraf_operator_comapare_1.3.5_and_1.3.10]: https://github.com/influxdata/helm-charts/compare/telegraf-operator-1.3.5...telegraf-operator-1.3.10
 [cert-manager-1.4]: https://github.com/cert-manager/cert-manager/releases/tag/v1.4.0
diff --git a/deploy/docs/v3_migration_doc.md b/deploy/docs/v3_migration_doc.md
index da94f13b66..229444c3f1 100644
--- a/deploy/docs/v3_migration_doc.md
+++ b/deploy/docs/v3_migration_doc.md
@@ -1,3 +1,119 @@
 # Kubernetes Collection `v3.0.0` - Breaking Changes
 
+<<<<<<< HEAD
 Moved to [/docs/v3-migration-doc.md](/docs/v3-migration-doc.md)
+=======
+- [Changes](#changes)
+- [How to upgrade](#how-to-upgrade)
+  - [Requirements](#requirements)
+  - [Manual steps](#manual-steps)
+    - [Upgrade kube-prometheus-stack](#upgrade-kube-prometheus-stack)
+  - [Replace special configuration values marked by 'replace' suffix](#replace-special-configuration-values-marked-by-replace-suffix)
+
+Based on the feedback from our users, we will be introducing several changes
+to the Sumo Logic Kubernetes Collection solution.
+
+In this document we detail the changes as well as the exact steps for migration.
+
+## Changes
+
+- Upgrading kube-prometheus stack
+
+  We are updating Kube-prometheus-stack to newest available version.
+  Major feature related to that change is upgrading kube-state-metrics to v2
+
+- Removing mechanism to replace values in configuration for traces marked by 'replace' suffix,
+  following special values in configuration are no longer automatically replaced and they need to be changed:
+
+  - `exporters.otlptraces.endpoint.replace`
+  - `exporters.otlpmetrics.endpoint.replace`
+  - `processors.source.collector.replace`
+  - `processors.source.name.replace`
+  - `processors.source.category.replace`
+  - `processors.source.category_prefix.replace`
+  - `processors.source.category_replace_dash.replace`
+  - `processors.source.exclude_namespace_regex.replace`
+  - `processors.source.exclude_pod_regex.replace`
+  - `processors.source.exclude_container_regex.replace`
+  - `processors.source.exclude_host_regex.replace`
+  - `processors.resource.cluster.replace`
+  - `exporters.sumologic.source_name.replace`
+  - `exporters.sumologic.source_category.replace`
+
+## How to upgrade
+
+### Requirements
+
+- `helm3`
+- `kubectl`
+- `jq`
+
+### Manual steps
+
+1. Perform required manual steps:
+    - [Upgrade kube-prometheus-stack](#upgrade-kube-prometheus-stack)
+
+#### Upgrade kube-prometheus-stack
+
+Upgrade of kube-prometheus-stack is a breaking change and requires manual steps:
+
+- Upgrading prometheus CRDs:
+
+  ```bash
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_alertmanagerconfigs.yaml
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_alertmanagers.yaml
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_podmonitors.yaml
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_probes.yaml
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_prometheuses.yaml
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_prometheusrules.yaml
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_servicemonitors.yaml
+  kubectl apply --server-side -f https://raw.githubusercontent.com/prometheus-operator/prometheus-operator/v0.58.0/example/prometheus-operator-crd/monitoring.coreos.com_thanosrulers.yaml
+  ```
+
+  due to:
+
+  ```text
+  Error: UPGRADE FAILED: error validating "": error validating data: ValidationError(Prometheus.spec): unknown field "shards" in com.coreos.monitoring.v1.Prometheus.spec
+  ```
+
+- Patching `kube-state-metrics` deployment:
+
+  ```bash
+  kubectl get deployment \
+    --namespace="${NAMESPACE}" \
+    --selector 'app.kubernetes.io/name=kube-state-metrics' \
+    -o json | \
+  jq ". | .items[].spec.selector.matchLabels[\"app.kubernetes.io/instance\"] |= \"${HELM_RELEASE_NAME}\"" | \
+  kubectl apply \
+    --namespace="${NAMESPACE}" \
+    --force \
+    --filename -
+  ```
+
+  due to:
+
+  ```text
+  Error: UPGRADE FAILED: cannot patch "collection-kube-state-metrics" with kind Deployment: Deployment.apps "collection-kube-state-metrics" is invalid: spec.selector: Invalid value: v1.LabelSelector{MatchLabels:map[string]string{"app.kubernetes.io/instance":"collection", "app.kubernetes.io/name":"kube-state-metrics"}, MatchExpressions:[]v1.LabelSelectorRequirement(nil)}: field is immutable
+  ```
+
+### Replace special configuration values marked by 'replace' suffix
+
+Mechanism to replace special configuration values for traces marked by 'replace' suffix was removed and following special values in configuration are no longer automatically replaced and they need to be changed:
+
+- `exporters.otlptraces.endpoint.replace`
+- `exporters.otlpmetrics.endpoint.replace`
+- `processors.source.collector.replace`
+- `processors.source.name.replace`
+- `processors.source.category.replace`
+- `processors.source.category_prefix.replace`
+- `processors.source.category_replace_dash.replace`
+- `processors.source.exclude_namespace_regex.replace`
+- `processors.source.exclude_pod_regex.replace`
+- `processors.source.exclude_container_regex.replace`
+- `processors.source.exclude_host_regex.replace`
+- `processors.resource.cluster.replace`
+- `exporters.sumologic.source_name.replace`
+- `exporters.sumologic.source_category.replace`
+
+Above special configuration values can be replaced either to direct values or be set as reference to other parameters form `values.yaml`.
+>>>>>>> 4892a552 (chore!: remove replacing values in configuration marked by 'replace' suffix)
diff --git a/deploy/helm/sumologic/conf/traces/traces.otelagent.conf.yaml b/deploy/helm/sumologic/conf/traces/traces.otelagent.conf.yaml
index d7fa87a6bd..3cc86d1ec1 100644
--- a/deploy/helm/sumologic/conf/traces/traces.otelagent.conf.yaml
+++ b/deploy/helm/sumologic/conf/traces/traces.otelagent.conf.yaml
@@ -1,6 +1 @@
-{{- $yamlFile := toYaml $.Values.otelagent.config }}
-{{- $otelTracesService := include "traces.otelagent.exporter.endpoint" . }}
-{{- $yamlFile = replace "exporters.otlptraces.endpoint.replace" $otelTracesService $yamlFile }}
-{{- $otelMetricsService := printf "%s.%s" ( include "sumologic.metadata.name.otelcol.service-metrics" . ) .Release.Namespace }}
-{{- $yamlFile = replace "exporters.otlpmetrics.endpoint.replace" $otelMetricsService $yamlFile }}
-{{ tpl ($yamlFile | replace ": '{{" ": {{" | replace "}}'" "}}") . | nindent 2 }}
+{{ tpl (toYaml .Values.otelagent.config | replace ": '{{" ": {{" | replace "}}'" "}}") . | nindent 2 }}
diff --git a/deploy/helm/sumologic/conf/traces/traces.otelcol.conf.yaml b/deploy/helm/sumologic/conf/traces/traces.otelcol.conf.yaml
index c899cb193d..c36af0b9a0 100644
--- a/deploy/helm/sumologic/conf/traces/traces.otelcol.conf.yaml
+++ b/deploy/helm/sumologic/conf/traces/traces.otelcol.conf.yaml
@@ -1,26 +1 @@
-{{- $yamlFile := toYaml $.Values.otelcol.config }}
-{{- $_collector := .Values.sumologic.collectorName | default .Values.sumologic.clusterName | quote }}
-{{- $sourceName := .Values.otelcol.sourceMetadata.sourceName | quote }}
-{{- $sourceCategory := .Values.otelcol.sourceMetadata.sourceCategory | quote }}
-{{- $sourceCategoryPrefix := .Values.otelcol.sourceMetadata.sourceCategoryPrefix | quote }}
-{{- $sourceCategoryReplaceDash := .Values.otelcol.sourceMetadata.sourceCategoryReplaceDash | quote }}
-{{- $excludeNamespaceRegex := .Values.otelcol.sourceMetadata.excludeNamespaceRegex | quote }}
-{{- $excludePodRegex := .Values.otelcol.sourceMetadata.excludePodRegex | quote }}
-{{- $excludeContainerRegex := .Values.otelcol.sourceMetadata.excludeContainerRegex | quote }}
-{{- $excludeHostRegex := .Values.otelcol.sourceMetadata.excludeHostRegex | quote }}
-{{- $clusterName := include "sumologic.clusterNameReplaceSpaceWithDash" . }}
-
-{{- $yamlFile := replace "processors.source.collector.replace" $_collector $yamlFile }}
-{{- $yamlFile := replace "processors.source.name.replace" $sourceName $yamlFile }}
-{{- $yamlFile := replace "processors.source.category.replace" $sourceCategory $yamlFile }}
-{{- $yamlFile := replace "processors.source.category_prefix.replace" $sourceCategoryPrefix $yamlFile }}
-{{- $yamlFile := replace "processors.source.category_replace_dash.replace" $sourceCategoryReplaceDash $yamlFile }}
-{{- $yamlFile := replace "processors.source.exclude_namespace_regex.replace" $excludeNamespaceRegex $yamlFile }}
-{{- $yamlFile := replace "processors.source.exclude_pod_regex.replace" $excludePodRegex $yamlFile }}
-{{- $yamlFile := replace "processors.source.exclude_container_regex.replace" $excludeContainerRegex $yamlFile }}
-{{- $yamlFile := replace "processors.source.exclude_host_regex.replace" $excludeHostRegex $yamlFile }}
-{{- $yamlFile := replace "processors.resource.cluster.replace" $clusterName $yamlFile }}
-{{- $yamlFile := replace "exporters.sumologic.source_name.replace" $sourceName $yamlFile }}
-{{- $yamlFile := replace "exporters.sumologic.source_category.replace" $sourceCategory $yamlFile }}
-
-{{- tpl ($yamlFile | replace ": '{{" ": {{" | replace "}}'" "}}") . | nindent 2 }}
+{{- tpl (toYaml .Values.otelcol.config | replace ": '{{" ": {{" | replace "}}'" "}}") . | nindent 2 }}
diff --git a/deploy/helm/sumologic/templates/_helpers.tpl b/deploy/helm/sumologic/templates/_helpers.tpl
index 001a5898d2..67ce07636d 100644
--- a/deploy/helm/sumologic/templates/_helpers.tpl
+++ b/deploy/helm/sumologic/templates/_helpers.tpl
@@ -1240,19 +1240,6 @@ Example:
 {{- print $annotations_match }}
 {{- end -}}
 
-
-{{/*
-Return k8s.cluster.name for opentelemetry collector
-
-Example:
-
-{{ include "otelcol.k8s.cluster.name" . }}
-*/}}
-{{- define "otelcol.k8s.cluster.name" -}}
-{{ .Values.sumologic.collectorName | default .Values.sumologic.clusterName | quote }}
-{{- end -}}
-
-
 {{/*
 Returns list of namespaces to exclude
 
diff --git a/deploy/helm/sumologic/values.yaml b/deploy/helm/sumologic/values.yaml
index 802c232711..ede25149ed 100644
--- a/deploy/helm/sumologic/values.yaml
+++ b/deploy/helm/sumologic/values.yaml
@@ -3452,9 +3452,9 @@ otelagent:
       pprof: {}
     exporters:
       otlphttp/traces:
-        endpoint: 'http://exporters.otlptraces.endpoint.replace:4318'
+        endpoint: 'http://{{ include "traces.otelagent.exporter.endpoint" . }}:4318'
       otlphttp/metrics:
-        endpoint: 'http://exporters.otlpmetrics.endpoint.replace:4318'
+        endpoint: 'http://{{ printf "%s.%s" ( include "sumologic.metadata.name.otelcol.service-metrics" . ) .Release.Namespace }}:4318'
     service:
       extensions: [health_check, memory_ballast, pprof]
       pipelines:
@@ -3569,26 +3569,26 @@ otelcol:
       ## Source processor adds Sumo Logic related metadata
       source:
         annotation_prefix: "k8s.pod.annotation."
-        collector: "processors.source.collector.replace"
+        collector: '{{ .Values.sumologic.collectorName | default .Values.sumologic.clusterName | quote }}'
         exclude:
-          k8s.container.name: "processors.source.exclude_container_regex.replace"
-          k8s.host.name: "processors.source.exclude_host_regex.replace"
-          k8s.namespace.name: "processors.source.exclude_namespace_regex.replace"
-          k8s.pod.name: "processors.source.exclude_pod_regex.replace"
+          k8s.container.name: '{{ .Values.otelcol.sourceMetadata.excludeContainerRegex  | quote }}'
+          k8s.host.name: '{{ .Values.otelcol.sourceMetadata.excludeHostRegex | quote }}'
+          k8s.namespace.name: '{{ .Values.otelcol.sourceMetadata.excludeNamespaceRegex | quote }}'
+          k8s.pod.name: '{{  .Values.otelcol.sourceMetadata.excludePodRegex| quote }}'
         pod_key: "k8s.pod.name"
         pod_name_key: "k8s.pod.pod_name"
         pod_template_hash_key: "k8s.pod.label.pod-template-hash"
-        source_category: "processors.source.category.replace"
-        source_category_prefix: "processors.source.category_prefix.replace"
-        source_category_replace_dash: "processors.source.category_replace_dash.replace"
+        source_category: '{{ .Values.otelcol.sourceMetadata.sourceCategory | quote }}'
+        source_category_prefix: '{{ .Values.otelcol.sourceMetadata.sourceCategoryPrefix | quote }}'
+        source_category_replace_dash: '{{ .Values.otelcol.sourceMetadata.sourceCategoryReplaceDash | quote }}'
         source_host: "%{k8s.pod.hostname}"
-        source_name: "processors.source.name.replace"
+        source_name: '{{ .Values.otelcol.sourceMetadata.sourceName | quote }}'
 
       ## Resource processor sets the associted cluster attribute
       resource:
         attributes:
           - key: k8s.cluster.name
-            value: "processors.resource.cluster.replace"
+            value: '{{ include "sumologic.clusterNameReplaceSpaceWithDash" . }}'
             action: upsert
 
       ## The memory_limiter processor is used to prevent out of memory situations on the collector.
@@ -3653,9 +3653,9 @@ otelcol:
         ## carbon2 and graphite are going to be supported soon.
         metric_format: prometheus
         ## Desired source category. Useful if you want to override the source category configured for the source.
-        source_category: "exporters.sumologic.source_category.replace"
+        source_category: '{{ .Values.otelcol.sourceMetadata.sourceCategory| quote }}'
         ## Desired source name. Useful if you want to override the source name configured for the source.
-        source_name: "exporters.sumologic.source_name.replace"
+        source_name: '{{ .Values.otelcol.sourceMetadata.sourceName | quote }}'
         ## Desired host name. Useful if you want to override the source host configured for the source.
         source_host: "%{k8s.pod.hostname}"
         ## Timeout for every attempt to send data to Sumo Logic backend. Maximum connection timeout is 55s.
diff --git a/docs/v3-migration-doc.md b/docs/v3-migration-doc.md
index 6af7258d22..e49ed24334 100644
--- a/docs/v3-migration-doc.md
+++ b/docs/v3-migration-doc.md
@@ -5,6 +5,7 @@
   - [Requirements](#requirements)
   - [Manual steps](#manual-steps)
     - [Upgrade kube-prometheus-stack](#upgrade-kube-prometheus-stack)
+  - [Replace special configuration values marked by 'replace' suffix](#replace-special-configuration-values-marked-by-replace-suffix)
 
 Based on the feedback from our users, we will be introducing several changes
 to the Sumo Logic Kubernetes Collection solution.
@@ -18,6 +19,24 @@ In this document we detail the changes as well as the exact steps for migration.
   We are updating Kube-prometheus-stack to newest available version.
   Major feature related to that change is upgrading kube-state-metrics to v2
 
+- Removing mechanism to replace values in configuration for traces marked by 'replace' suffix,
+  following special values in configuration are no longer automatically replaced and they need to be changed:
+
+  - `exporters.otlptraces.endpoint.replace`
+  - `exporters.otlpmetrics.endpoint.replace`
+  - `processors.source.collector.replace`
+  - `processors.source.name.replace`
+  - `processors.source.category.replace`
+  - `processors.source.category_prefix.replace`
+  - `processors.source.category_replace_dash.replace`
+  - `processors.source.exclude_namespace_regex.replace`
+  - `processors.source.exclude_pod_regex.replace`
+  - `processors.source.exclude_container_regex.replace`
+  - `processors.source.exclude_host_regex.replace`
+  - `processors.resource.cluster.replace`
+  - `exporters.sumologic.source_name.replace`
+  - `exporters.sumologic.source_category.replace`
+
 ## How to upgrade
 
 ### Requirements
@@ -73,3 +92,24 @@ Upgrade of kube-prometheus-stack is a breaking change and requires manual steps:
   ```text
   Error: UPGRADE FAILED: cannot patch "collection-kube-state-metrics" with kind Deployment: Deployment.apps "collection-kube-state-metrics" is invalid: spec.selector: Invalid value: v1.LabelSelector{MatchLabels:map[string]string{"app.kubernetes.io/instance":"collection", "app.kubernetes.io/name":"kube-state-metrics"}, MatchExpressions:[]v1.LabelSelectorRequirement(nil)}: field is immutable
   ```
+
+### Replace special configuration values marked by 'replace' suffix
+
+Mechanism to replace special configuration values for traces marked by 'replace' suffix was removed and following special values in configuration are no longer automatically replaced and they need to be changed:
+
+- `exporters.otlptraces.endpoint.replace`
+- `exporters.otlpmetrics.endpoint.replace`
+- `processors.source.collector.replace`
+- `processors.source.name.replace`
+- `processors.source.category.replace`
+- `processors.source.category_prefix.replace`
+- `processors.source.category_replace_dash.replace`
+- `processors.source.exclude_namespace_regex.replace`
+- `processors.source.exclude_pod_regex.replace`
+- `processors.source.exclude_container_regex.replace`
+- `processors.source.exclude_host_regex.replace`
+- `processors.resource.cluster.replace`
+- `exporters.sumologic.source_name.replace`
+- `exporters.sumologic.source_category.replace`
+
+Above special configuration values can be replaced either to direct values or be set as reference to other parameters form `values.yaml`.
\ No newline at end of file