diff --git a/.github/workflows/add-labels.yml b/.github/workflows/add-labels.yml
index 3566af9ec83..e0452a5631c 100644
--- a/.github/workflows/add-labels.yml
+++ b/.github/workflows/add-labels.yml
@@ -1,25 +1,53 @@
-name: 'Add labels for area found in bug issue descriptions'
+name: 'Add labels to issues and pull requests'
 on:
   issues:
-    types: [opened]
+    types: [ opened ]
+
+  pull_request:
+    branches: [ 'main*' ]
 
 permissions:
   issues: write
+  pull-requests: write
 
 jobs:
-  add-labels:
-    if: ${{ !github.event.issue.pull_request }}
+  add-labels-on-issues:
+    if: github.event_name == 'issues' && !github.event.issue.pull_request
 
     runs-on: ubuntu-latest
+
     steps:
       - name: check out code
         uses: actions/checkout@v4
 
-      - name: Add labels for areas found in bug issue descriptions
+      - name: Add labels for package found in bug issue descriptions
         shell: pwsh
         run: |
-          .\build\scripts\add-labels.ps1 -issueNumber $env:ISSUE_NUMBER -issueBody $env:ISSUE_BODY
+          Import-Module .\build\scripts\add-labels.psm1
+
+          AddLabelsOnIssuesForPackageFoundInBody `
+            -issueNumber ${{ github.event.issue.number }} `
+            -issueBody $env:ISSUE_BODY
         env:
           GH_TOKEN: ${{ github.token }}
-          ISSUE_NUMBER: ${{ github.event.issue.number }}
           ISSUE_BODY: ${{ github.event.issue.body }}
+
+  add-labels-on-pull-requests:
+    if: github.event_name == 'pull_request'
+
+    runs-on: ubuntu-latest
+
+    steps:
+      - name: check out code
+        uses: actions/checkout@v4
+
+      - name: Add labels for files changed on pull requests
+        shell: pwsh
+        run: |
+          Import-Module .\build\scripts\add-labels.psm1
+
+          AddLabelsOnPullRequestsBasedOnFilesChanged `
+            -pullRequestNumber ${{ github.event.pull_request.number }} `
+            -labelPackagePrefix 'pkg:'
+        env:
+          GH_TOKEN: ${{ github.token }}
diff --git a/.github/workflows/post-release.yml b/.github/workflows/post-release.yml
index 42c2ce11db7..e824e87d724 100644
--- a/.github/workflows/post-release.yml
+++ b/.github/workflows/post-release.yml
@@ -32,7 +32,7 @@ jobs:
       && github.event.issue.locked == true
       && github.event.comment.user.login != needs.automation.outputs.username
       && contains(github.event.comment.body, '/PushPackages')
-      && startsWith(github.event.issue.title, '[repo] Prepare release ')
+      && startsWith(github.event.issue.title, '[release] Prepare release ')
       && github.event.issue.pull_request.merged_at
       && needs.automation.outputs.enabled
 
diff --git a/.github/workflows/prepare-release.yml b/.github/workflows/prepare-release.yml
index 1225f098e96..bd8211e645e 100644
--- a/.github/workflows/prepare-release.yml
+++ b/.github/workflows/prepare-release.yml
@@ -67,7 +67,7 @@ jobs:
       && github.event.action == 'closed'
       && github.event.pull_request.user.login == needs.automation.outputs.username
       && github.event.pull_request.merged == true
-      && startsWith(github.event.pull_request.title, '[repo] Prepare release ')
+      && startsWith(github.event.pull_request.title, '[release] Prepare release ')
       && needs.automation.outputs.enabled
 
     env:
@@ -100,7 +100,7 @@ jobs:
       && github.event.issue.locked == true
       && github.event.comment.user.login != needs.automation.outputs.username
       && contains(github.event.comment.body, '/CreateReleaseTag')
-      && startsWith(github.event.issue.title, '[repo] Prepare release ')
+      && startsWith(github.event.issue.title, '[release] Prepare release ')
       && github.event.issue.pull_request.merged_at
       && needs.automation.outputs.enabled
 
diff --git a/OpenTelemetry.sln b/OpenTelemetry.sln
index d7d059b58cb..61963889e01 100644
--- a/OpenTelemetry.sln
+++ b/OpenTelemetry.sln
@@ -328,7 +328,7 @@ Project("{2150E333-8FDC-42A3-9474-1A3956D46DE8}") = "TagWriter", "TagWriter", "{
 EndProject
 Project("{2150E333-8FDC-42A3-9474-1A3956D46DE8}") = "scripts", "scripts", "{44982E0D-C8C6-42DC-9F8F-714981F27CE6}"
 	ProjectSection(SolutionItems) = preProject
-		build\scripts\add-labels.ps1 = build\scripts\add-labels.ps1
+		build\scripts\add-labels.psm1 = build\scripts\add-labels.psm1
 		build\scripts\finalize-publicapi.ps1 = build\scripts\finalize-publicapi.ps1
 		build\scripts\post-release.psm1 = build\scripts\post-release.psm1
 		build\scripts\prepare-release.psm1 = build\scripts\prepare-release.psm1
diff --git a/build/scripts/add-labels.ps1 b/build/scripts/add-labels.ps1
deleted file mode 100644
index 9b91ad9df87..00000000000
--- a/build/scripts/add-labels.ps1
+++ /dev/null
@@ -1,12 +0,0 @@
-param(
-  [Parameter(Mandatory=$true)][int]$issueNumber,
-  [Parameter(Mandatory=$true)][string]$issueBody
-)
-
-$match = [regex]::Match($issueBody, '^[#]+ Package\s*(OpenTelemetry(?:\.\w+)*)')
-if ($match.Success -eq $false)
-{
-    Return
-}
-
-gh issue edit $issueNumber --add-label $("pkg:" + $match.Groups[1].Value)
diff --git a/build/scripts/add-labels.psm1 b/build/scripts/add-labels.psm1
new file mode 100644
index 00000000000..ee82ae2ebf1
--- /dev/null
+++ b/build/scripts/add-labels.psm1
@@ -0,0 +1,148 @@
+function AddLabelsOnIssuesForPackageFoundInBody {
+  param(
+    [Parameter(Mandatory=$true)][int]$issueNumber,
+    [Parameter(Mandatory=$true)][string]$issueBody
+  )
+
+  $match = [regex]::Match($issueBody, '^[#]+ Package\s*(OpenTelemetry(?:\.\w+)*)')
+  if ($match.Success -eq $false)
+  {
+      Return
+  }
+
+  gh issue edit $issueNumber --add-label $("pkg:" + $match.Groups[1].Value)
+}
+
+Export-ModuleMember -Function AddLabelsOnIssuesForPackageFoundInBody
+
+function AddLabelsOnPullRequestsBasedOnFilesChanged {
+  param(
+    [Parameter(Mandatory=$true)][int]$pullRequestNumber,
+    [Parameter(Mandatory=$true)][string]$labelPackagePrefix # 'pkg:' on main repo, 'comp:' on contrib repo
+  )
+
+  # Note: This function is intended to work on main repo and on contrib. Please
+  # keep them in sync.
+
+  $repoLabels = gh label list --json name,id | ConvertFrom-Json
+
+  $filesChangedOnPullRequest = gh pr diff $pullRequestNumber --name-only
+
+  $labelsOnPullRequest = (gh pr view $pullRequestNumber --json labels | ConvertFrom-Json).labels
+
+  $visitedProjects = New-Object System.Collections.Generic.HashSet[string]
+  $labelsToAdd = New-Object System.Collections.Generic.HashSet[string]
+  $labelsToRemove = New-Object System.Collections.Generic.HashSet[string]
+
+  # Note: perf label may be added but it is kind of a guess so we don't remove
+  # it automatically in order to also allow manual inclusion after reviewing files
+  $managedLabels = 'infra', 'documentation', 'dependencies'
+  $rootInfraFiles = 'global.json', 'NuGet.config', 'codeowners'
+  $documentationFiles = 'readme.md', 'contributing.md', 'releasing.md', 'versioning.md'
+
+  foreach ($fileChanged in $filesChangedOnPullRequest)
+  {
+    $fileChanged = $fileChanged.ToLower()
+    $fullFileName = [System.IO.Path]::GetFileName($fileChanged)
+    $fileName = [System.IO.Path]::GetFileNameWithoutExtension($fileChanged)
+    $fileExtension = [System.IO.Path]::GetExtension($fileChanged)
+
+    if ($fileChanged.StartsWith('src/') -or $fileChanged.StartsWith('test/'))
+    {
+      $match = [regex]::Match($fileChanged, '^(?:(?:src)|(?:test))\/(.*?)\/.+$')
+      if ($match.Success -eq $false)
+      {
+          continue
+      }
+      $rawProjectName = $match.Groups[1].Value
+      if ($rawProjectName.Contains(".benchmarks") -or $rawProjectName.Contains(".stress"))
+      {
+        $added = $labelsToAdd.Add("perf")
+      }
+
+      $projectName = $rawProjectName.Replace(".tests", "").Replace(".benchmarks", "").Replace(".stress", "")
+      if ($visitedProjects.Contains($projectName))
+      {
+        continue
+      }
+
+      $added = $visitedProjects.Add($projectName);
+
+      foreach ($repoLabel in $repoLabels)
+      {
+        if ($repoLabel.name.StartsWith($labelPackagePrefix))
+        {
+            $package = $repoLabel.name.Substring($labelPackagePrefix.Length).ToLower()
+            if ($package.StartsWith('opentelemetry') -eq $false)
+            {
+                # Note: On contrib labels don't have "OpenTelemetry." prefix
+                $package = 'opentelemetry.' + $package
+            }
+            if ($package -eq $projectName)
+            {
+                $added = $labelsToAdd.Add($repoLabel.name)
+                break
+            }
+        }
+      }
+    }
+
+    if ($documentationFiles.Contains($fullFileName) -or
+        $fileChanged.StartsWith('docs/') -or
+        $fileChanged.StartsWith('examples/'))
+    {
+        $added = $labelsToAdd.Add("documentation")
+    }
+
+    if ($fileChanged.StartsWith('build/') -or
+        $fileChanged.StartsWith('.github/') -or
+        $rootInfraFiles.Contains($fullFileName) -or
+        $fileExtension -eq ".props" -or
+        $fileExtension -eq ".targets" -or
+        $fileChanged.StartsWith('test\openTelemetry.aotcompatibility'))
+    {
+        $added = $labelsToAdd.Add("infra")
+    }
+
+    if ($fileChanged.StartsWith('test\benchmarks'))
+    {
+        $added = $labelsToAdd.Add("perf")
+    }
+
+    if ($fullFileName -eq 'directory.packages.props')
+    {
+        $added = $labelsToAdd.Add("dependencies")
+    }
+  }
+
+  foreach ($labelOnPullRequest in $labelsOnPullRequest)
+  {
+     if ($labelsToAdd.Contains($labelOnPullRequest.name))
+     {
+        $removed = $labelsToAdd.Remove($labelOnPullRequest.name)
+     }
+     elseif ($labelOnPullRequest.name.StartsWith($labelPackagePrefix) -or
+        $managedLabels.Contains($labelOnPullRequest.name))
+     {
+        $added = $labelsToRemove.Add($labelOnPullRequest.name)
+     }
+  }
+
+  if ($labelsToAdd.Count -gt 0)
+  {
+      foreach ($label in $labelsToAdd)
+      {
+        gh pr edit $pullRequestNumber --add-label $label
+      }
+  }
+
+  if ($labelsToRemove.Count -gt 0)
+  {
+      foreach ($label in $labelsToRemove)
+      {
+        gh pr edit $pullRequestNumber --remove-label $label
+      }
+  }
+}
+
+Export-ModuleMember -Function AddLabelsOnPullRequestsBasedOnFilesChanged
diff --git a/build/scripts/post-release.psm1 b/build/scripts/post-release.psm1
index fa141ba0d80..57f0f341c8f 100644
--- a/build/scripts/post-release.psm1
+++ b/build/scripts/post-release.psm1
@@ -114,7 +114,7 @@ function TryPostPackagesReadyNoticeOnPrepareReleasePullRequest {
 
   foreach ($pr in $prListResponse)
   {
-    if ($pr.author.login -ne $botUserName -or $pr.title -ne "[repo] Prepare release $tag")
+    if ($pr.author.login -ne $botUserName -or $pr.title -ne "[release] Prepare release $tag")
     {
       continue
     }
@@ -169,7 +169,7 @@ function PushPackagesPublishReleaseUnlockAndPostNoticeOnPrepareReleasePullReques
       throw 'PR author was unexpected'
   }
 
-  $match = [regex]::Match($prViewResponse.title, '^\[repo\] Prepare release (.*)$')
+  $match = [regex]::Match($prViewResponse.title, '^\[release\] Prepare release (.*)$')
   if ($match.Success -eq $false)
   {
       throw 'Could not parse tag from PR title'
@@ -302,11 +302,11 @@ Merge once packages are available on NuGet and the build passes.
 "@
 
   gh pr create `
-    --title "[repo] Core stable release $packageVersion updates" `
+    --title "[release] Core stable release $packageVersion updates" `
     --body $body `
     --base $targetBranch `
     --head $branch `
-    --label infra
+    --label release
 }
 
 Export-ModuleMember -Function CreateStableVersionUpdatePullRequest
@@ -355,7 +355,7 @@ function TryPostReleasePublishedNoticeOnPrepareReleasePullRequest {
 
   foreach ($pr in $prListResponse)
   {
-    if ($pr.author.login -ne $botUserName -or $pr.title -ne "[repo] Prepare release $tag")
+    if ($pr.author.login -ne $botUserName -or $pr.title -ne "[release] Prepare release $tag")
     {
       continue
     }
diff --git a/build/scripts/prepare-release.psm1 b/build/scripts/prepare-release.psm1
index bc7809eb9e7..88e6f7ad11f 100644
--- a/build/scripts/prepare-release.psm1
+++ b/build/scripts/prepare-release.psm1
@@ -59,11 +59,11 @@ Note: This PR was opened automatically by the [prepare release workflow](https:/
   }
 
   gh pr create `
-    --title "[repo] Prepare release $tag" `
+    --title "[release] Prepare release $tag" `
     --body $body `
     --base $targetBranch `
     --head $branch `
-    --label infra
+    --label release
 }
 
 Export-ModuleMember -Function CreatePullRequestToUpdateChangelogsAndPublicApis
@@ -82,7 +82,7 @@ function LockPullRequestAndPostNoticeToCreateReleaseTag {
       throw 'PR author was unexpected'
   }
 
-  $match = [regex]::Match($prViewResponse.title, '^\[repo\] Prepare release (.*)$')
+  $match = [regex]::Match($prViewResponse.title, '^\[release\] Prepare release (.*)$')
   if ($match.Success -eq $false)
   {
       throw 'Could not parse tag from PR title'
@@ -126,7 +126,7 @@ function CreateReleaseTagAndPostNoticeOnPullRequest {
       throw 'PR author was unexpected'
   }
 
-  $match = [regex]::Match($prViewResponse.title, '^\[repo\] Prepare release (.*)$')
+  $match = [regex]::Match($prViewResponse.title, '^\[release\] Prepare release (.*)$')
   if ($match.Success -eq $false)
   {
       throw 'Could not parse tag from PR title'