diff --git a/.chloggen/mx-psi_as-string.yaml b/.chloggen/mx-psi_as-string.yaml
new file mode 100644
index 00000000000..cc4c3b4cff1
--- /dev/null
+++ b/.chloggen/mx-psi_as-string.yaml
@@ -0,0 +1,26 @@
+# Use this changelog template to create an entry for release notes.
+
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: bug_fix
+
+# The name of the component, or a single word describing the area of concern, (e.g. otlpreceiver)
+component: confmap
+
+# A brief description of the change.  Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: When passing value to a string field through the `${<provider>:URI}` or `${URI}` syntax, the original raw string value is now preserved.
+
+# One or more tracking issues or pull requests related to the change
+issues: [10603]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext: |
+  - This change only applies under the `confmap.unifyEnvVarExpansion` feature gate.
+
+# Optional: The change log or logs in which this entry should be included.
+# e.g. '[user]' or '[user, api]'
+# Include 'user' if the change is relevant to end users.
+# Include 'api' if there is a change to a library API.
+# Default: '[user]'
+change_logs: []
diff --git a/confmap/internal/e2e/types_test.go b/confmap/internal/e2e/types_test.go
index e57d3f8af53..c5d38630c33 100644
--- a/confmap/internal/e2e/types_test.go
+++ b/confmap/internal/e2e/types_test.go
@@ -98,27 +98,22 @@ func TestTypeCasting(t *testing.T) {
 		{
 			value:       "\"0123\"",
 			targetField: TargetFieldString,
-			expected:    "0123",
-		},
-		{
-			value:       "\"0123\"",
-			targetField: TargetFieldInt,
-			expected:    83,
+			expected:    "\"0123\"",
 		},
 		{
 			value:       "\"0123\"",
 			targetField: TargetFieldInlineString,
-			expected:    "inline field with 0123 expansion",
+			expected:    "inline field with \"0123\" expansion",
 		},
 		{
 			value:       "!!str 0123",
 			targetField: TargetFieldString,
-			expected:    "0123",
+			expected:    "!!str 0123",
 		},
 		{
 			value:       "!!str 0123",
 			targetField: TargetFieldInlineString,
-			expected:    "inline field with 0123 expansion",
+			expected:    "inline field with !!str 0123 expansion",
 		},
 		{
 			value:       "t",
@@ -228,27 +223,27 @@ func TestStrictTypeCasting(t *testing.T) {
 		{
 			value:       "\"0123\"",
 			targetField: TargetFieldString,
-			expected:    "0123",
+			expected:    "\"0123\"",
 		},
 		{
 			value:        "\"0123\"",
 			targetField:  TargetFieldInt,
-			unmarshalErr: "'field' expected type 'int', got unconvertible type 'string', value: '0123'",
+			unmarshalErr: "'field' expected type 'int', got unconvertible type 'string', value: '\"0123\"'",
 		},
 		{
 			value:       "\"0123\"",
 			targetField: TargetFieldInlineString,
-			expected:    "inline field with 0123 expansion",
+			expected:    "inline field with \"0123\" expansion",
 		},
 		{
 			value:       "!!str 0123",
 			targetField: TargetFieldString,
-			expected:    "0123",
+			expected:    "!!str 0123",
 		},
 		{
 			value:       "!!str 0123",
 			targetField: TargetFieldInlineString,
-			expected:    "inline field with 0123 expansion",
+			expected:    "inline field with !!str 0123 expansion",
 		},
 		{
 			value:        "t",
diff --git a/confmap/provider.go b/confmap/provider.go
index f774cca3834..ea94aec3f87 100644
--- a/confmap/provider.go
+++ b/confmap/provider.go
@@ -9,6 +9,8 @@ import (
 
 	"go.uber.org/zap"
 	"gopkg.in/yaml.v3"
+
+	"go.opentelemetry.io/collector/internal/featuregates"
 )
 
 // ProviderSettings are the settings to initialize a Provider.
@@ -138,9 +140,14 @@ func NewRetrievedFromYAML(yamlBytes []byte, opts ...RetrievedOption) (*Retrieved
 		return nil, err
 	}
 
-	switch v := rawConf.(type) {
+	switch rawConf.(type) {
 	case string:
-		opts = append(opts, withStringRepresentation(v))
+		if featuregates.UseUnifiedEnvVarExpansionRules.IsEnabled() {
+			// If rawConf is a string, we override it with the raw yamlBytes.
+			// This is the original ${ENV} expansion behavior.
+			rawConf = string(yamlBytes)
+		}
+		opts = append(opts, withStringRepresentation(string(yamlBytes)))
 	case int, int32, int64, float32, float64, bool:
 		opts = append(opts, withStringRepresentation(string(yamlBytes)))
 	}
diff --git a/confmap/provider_test.go b/confmap/provider_test.go
index e43b5608096..791b6d81f15 100644
--- a/confmap/provider_test.go
+++ b/confmap/provider_test.go
@@ -85,8 +85,8 @@ func TestNewRetrievedFromYAMLString(t *testing.T) {
 		},
 		{
 			yaml:       "\"string\"",
-			value:      "string",
-			altStrRepr: "string",
+			value:      "\"string\"",
+			altStrRepr: "\"string\"",
 		},
 		{
 			yaml:  "123",
diff --git a/docs/rfcs/env-vars.md b/docs/rfcs/env-vars.md
index a2709412788..7f17b933a52 100644
--- a/docs/rfcs/env-vars.md
+++ b/docs/rfcs/env-vars.md
@@ -216,7 +216,7 @@ loading a field with the braces syntax, `env` syntax.
 | `0123`       | integer    | 83                                       | 83                                             | 83                             | n/a                                   |
 | `0123`       | string     | 0123                                     | 83                                             | 0123                           | 0123                                  |
 | `0xdeadbeef` | string     | 0xdeadbeef                               | 3735928559                                     | 0xdeadbeef                     | 0xdeadbeef                            |
-| `"0123"`     | string     | "0123"                                   | 0123                                           | 0123                           | 0123                                  |
-| `!!str 0123` | string     | !!str 0123                               | 0123                                           | 0123                           | 0123                                  |
+| `"0123"`     | string     | "0123"                                   | 0123                                           | "0123"                         | "0123"                                |
+| `!!str 0123` | string     | !!str 0123                               | 0123                                           | !!str 0123                     | !!str 0123                            |
 | `t`          | boolean    | true                                     | true                                           | Error: mapping string to bool  | n/a                                   |
 | `23`         | boolean    | true                                     | true                                           | Error: mapping integer to bool | n/a                                   |