diff --git a/composer.json b/composer.json
index 0ff50a2e8..5fc595478 100755
--- a/composer.json
+++ b/composer.json
@@ -2,7 +2,7 @@
     "name": "magento/magento2-functional-testing-framework",
     "description": "Magento2 Functional Testing Framework",
     "type": "library",
-    "version": "2.6.3",
+    "version": "3.0.0",
     "license": "AGPL-3.0",
     "keywords": ["magento", "automation", "functional", "testing"],
     "config": {
diff --git a/composer.lock b/composer.lock
index 6f370593b..cd692f7e6 100644
--- a/composer.lock
+++ b/composer.lock
@@ -4,7 +4,7 @@
         "Read more about it at https://getcomposer.org/doc/01-basic-usage.md#installing-dependencies",
         "This file is @generated automatically"
     ],
-    "content-hash": "83e4e17679bff5fdd472c246dca8ac48",
+    "content-hash": "21ca9c7fef683977c7a1bbb0591c54b0",
     "packages": [
         {
             "name": "allure-framework/allure-codeception",
diff --git a/dev/tests/unit/Magento/FunctionalTestFramework/Util/ModuleResolverTest.php b/dev/tests/unit/Magento/FunctionalTestFramework/Util/ModuleResolverTest.php
index 07e1ee7fa..ad0b1769d 100644
--- a/dev/tests/unit/Magento/FunctionalTestFramework/Util/ModuleResolverTest.php
+++ b/dev/tests/unit/Magento/FunctionalTestFramework/Util/ModuleResolverTest.php
@@ -146,20 +146,6 @@ function ($arg) {
                 'Test' . DIRECTORY_SEPARATOR .'Mftf'
             ]
         );
-        $mockResolver->verifyInvoked(
-            'globRelevantPaths',
-            [
-                $magentoBaseCodePath
-                    . DIRECTORY_SEPARATOR . "dev"
-                    . DIRECTORY_SEPARATOR . "tests"
-                    . DIRECTORY_SEPARATOR . "acceptance"
-                    . DIRECTORY_SEPARATOR . "tests"
-                    . DIRECTORY_SEPARATOR . "functional"
-                    . DIRECTORY_SEPARATOR . "Magento"
-                    . DIRECTORY_SEPARATOR . "FunctionalTest"
-                , ''
-            ]
-        );
     }
 
     /**
diff --git a/docs/mftf-tests-packaging.md b/docs/mftf-tests-packaging.md
new file mode 100644
index 000000000..8a37b8013
--- /dev/null
+++ b/docs/mftf-tests-packaging.md
@@ -0,0 +1,58 @@
+<style>
+.mftf-dl {
+  margin-bottom: 2.5em;
+}
+dl dt{
+  font-weight:400;
+}
+</style>
+
+# MFTF functional test modules and packaging
+
+## MFTF predefined test module paths
+The Magento Functional Testing Framework can run tests from predefined paths and custom paths. The predefined paths are:
+```
+app/code/<Vendor>/<Module>/Test/Mftf
+dev/tests/acceptance/tests/functional/<Vendor>/<TestModule>
+vendor/<Vendor>/<Module>/Test/Mftf
+vendor/<Vendor>/<TestModule>
+```
+
+To support future service isolation, Test module in `dev/tests/acceptance/tests/functional/<Vendor>/<TestModule>` and 
+`vendor/<Vendor>/<TestModule>` must define the module type as `magento2-functional-test-module` in its `composer.json` file. 
+No `composer.json` file is required for tests in `app/code/<Vendor>/<Module>/Test/Mftf` and `vendor/<Vendor>/<Module>/Test/Mftf` 
+as they are part of the Magento modules.
+
+Test module for a specific Magento module can only be in one of the paths.
+
+## Test module composer.json format
+
+Test module `composer.json` file should use type `magento2-functional-test-module`.
+
+Test module `composer.json` file should define Magento module dependencies in suggests block. 
+MFTF will recognize the dependency if the suggest message of a module specifies `type` using `magento2-module` and `name` 
+using module name registered with Magento.
+
+Here is an example `composer.json` file for the test module `dev/tests/acceptance/tests/functional/Magento/ConfigurableProductCatalogSearch`:
+
+```json
+{
+    "name": "magento/module-configurable-product-catalog-search-functional-test",
+    "description": "MFTF test module for Magento_ConfigurableProduct and Magento_CatalogSearch",
+    "type": "magento2-functional-test-module",
+    "config": {
+        "sort-packages": true
+    },
+    "require": {
+        "magento/magento2-functional-testing-framework": ">=2.5"
+    },
+    "suggest": {
+        "magento/module-configurable-product": "type: magento2-module, name: Magento_ConfigurableProduct, version: *",
+        "magento/module-catalog-search": "type: magento2-module, name: Magento_CatalogSearch, version: *"
+    },
+    "license": [
+        "OSL-3.0",
+        "AFL-3.0"
+    ]
+}
+```
\ No newline at end of file
diff --git a/src/Magento/FunctionalTestingFramework/Util/ModuleResolver.php b/src/Magento/FunctionalTestingFramework/Util/ModuleResolver.php
index aa9a08ddb..d5e90841d 100644
--- a/src/Magento/FunctionalTestingFramework/Util/ModuleResolver.php
+++ b/src/Magento/FunctionalTestingFramework/Util/ModuleResolver.php
@@ -54,12 +54,6 @@ class ModuleResolver
     . 'tests'
     . DIRECTORY_SEPARATOR
     . 'functional';
-    const DEPRECATED_DEV_TESTS = DIRECTORY_SEPARATOR
-        . self:: DEV_TESTS
-        . DIRECTORY_SEPARATOR
-        . "Magento"
-        . DIRECTORY_SEPARATOR
-        . "FunctionalTest";
 
     /**
      * Enabled modules.
@@ -327,8 +321,7 @@ private function aggregateTestModulePaths()
         $codePathsToPattern = [
             $modulePath => '',
             $magentoBaseCodePath . $vendorCodePath => self::TEST_MFTF_PATTERN,
-            $magentoBaseCodePath . $appCodePath => self::TEST_MFTF_PATTERN,
-            $magentoBaseCodePath . self::DEPRECATED_DEV_TESTS => ''
+            $magentoBaseCodePath . $appCodePath => self::TEST_MFTF_PATTERN
         ];
 
         foreach ($codePathsToPattern as $codePath => $pattern) {
@@ -374,22 +367,6 @@ private function globRelevantPaths($testPath, $pattern)
             }
         }
 
-        /* TODO uncomment this to show deprecation warning when we ready to fully deliver test packaging feature
-        if (strpos($testPath, self::DEPRECATED_DEV_TESTS) !== false && !empty($modulePaths)) {
-            $deprecatedPath = ltrim(self::DEPRECATED_DEV_TESTS, DIRECTORY_SEPARATOR);
-            $suggestedPath = self::DEV_TESTS . DIRECTORY_SEPARATOR . 'Magento';
-            $message = "DEPRECATION: Found MFTF test modules in the deprecated path: $deprecatedPath."
-                . " Move these test modules to $suggestedPath.";
-
-            if (MftfApplicationConfig::getConfig()->verboseEnabled()) {
-                LoggingUtil::getInstance()->getLogger(ModuleResolver::class)->warning($message);
-            }
-            // Suppress print during unit testing
-            if (MftfApplicationConfig::getConfig()->getPhase() !== MftfApplicationConfig::UNIT_TEST_PHASE) {
-                print ("\n$message\n\n");
-            }
-        }
-        */
         return $modulePaths;
     }
 
diff --git a/src/Magento/FunctionalTestingFramework/_bootstrap.php b/src/Magento/FunctionalTestingFramework/_bootstrap.php
index a5ce1f931..214f6a34b 100644
--- a/src/Magento/FunctionalTestingFramework/_bootstrap.php
+++ b/src/Magento/FunctionalTestingFramework/_bootstrap.php
@@ -66,7 +66,7 @@
 // define TEST_PATH and TEST_MODULE_PATH
 defined('TESTS_BP') || define('TESTS_BP', realpath(MAGENTO_BP . DIRECTORY_SEPARATOR . 'dev/tests/acceptance'));
 
-$RELATIVE_TESTS_MODULE_PATH = '/tests/functional/Magento/FunctionalTest';
+$RELATIVE_TESTS_MODULE_PATH = '/tests/functional/Magento';
 defined('TESTS_MODULE_PATH') || define(
     'TESTS_MODULE_PATH',
     realpath(TESTS_BP . $RELATIVE_TESTS_MODULE_PATH)