diff --git a/NEXT_CHANGELOG.md b/NEXT_CHANGELOG.md
index e098fc190d3..665031fa09e 100644
--- a/NEXT_CHANGELOG.md
+++ b/NEXT_CHANGELOG.md
@@ -11,6 +11,7 @@
 ### Bundles
 * Fix processing short pip flags in environment dependencies ([#3708](https://github.com/databricks/cli/pull/3708))
 * Add support for referencing local files in -e pip flag for environment dependencies ([#3708](https://github.com/databricks/cli/pull/3708))
+* Add error for when an etag is specified in dashboard configuration. Setting etags was never supported / valid in bundles but now users will see this error during validation rather than deployment. ([#3723](https://github.com/databricks/cli/pull/3723))
 * Fix PIP flag processing in pipeline environment dependencies ([#3734](https://github.com/databricks/cli/pull/3734))
 
 ### API Changes
diff --git a/acceptance/bundle/validate/no_dashboard_etag/databricks.yml b/acceptance/bundle/validate/no_dashboard_etag/databricks.yml
new file mode 100644
index 00000000000..9a518ab88c7
--- /dev/null
+++ b/acceptance/bundle/validate/no_dashboard_etag/databricks.yml
@@ -0,0 +1,6 @@
+resources:
+  dashboards:
+    foobar:
+      display_name: foobar
+      etag: "1234567890"
+      serialized_dashboard: "{}"
diff --git a/acceptance/bundle/validate/no_dashboard_etag/out.test.toml b/acceptance/bundle/validate/no_dashboard_etag/out.test.toml
new file mode 100644
index 00000000000..e092fd5ed6a
--- /dev/null
+++ b/acceptance/bundle/validate/no_dashboard_etag/out.test.toml
@@ -0,0 +1,5 @@
+Local = true
+Cloud = false
+
+[EnvMatrix]
+  DATABRICKS_BUNDLE_ENGINE = ["terraform", "direct-exp"]
diff --git a/acceptance/bundle/validate/no_dashboard_etag/output.txt b/acceptance/bundle/validate/no_dashboard_etag/output.txt
new file mode 100644
index 00000000000..d7d3ca110bb
--- /dev/null
+++ b/acceptance/bundle/validate/no_dashboard_etag/output.txt
@@ -0,0 +1,15 @@
+
+>>> [CLI] bundle validate
+Error: dashboard "foobar" has an etag set. Etags must not be set in bundle configuration
+  at resources.dashboards.foobar
+  in databricks.yml:6:7
+
+Name: test-bundle
+Target: default
+Workspace:
+  User: [USERNAME]
+  Path: /Workspace/Users/[USERNAME]/.bundle/test-bundle/default
+
+Found 1 error
+
+Exit code: 1
diff --git a/acceptance/bundle/validate/no_dashboard_etag/script b/acceptance/bundle/validate/no_dashboard_etag/script
new file mode 100644
index 00000000000..5350876150f
--- /dev/null
+++ b/acceptance/bundle/validate/no_dashboard_etag/script
@@ -0,0 +1 @@
+trace $CLI bundle validate
diff --git a/bundle/config/validate/validate_dashboard_etags.go b/bundle/config/validate/validate_dashboard_etags.go
new file mode 100644
index 00000000000..53c428af1dd
--- /dev/null
+++ b/bundle/config/validate/validate_dashboard_etags.go
@@ -0,0 +1,37 @@
+package validate
+
+import (
+	"context"
+	"fmt"
+
+	"github.com/databricks/cli/bundle"
+	"github.com/databricks/cli/libs/diag"
+	"github.com/databricks/cli/libs/dyn"
+)
+
+func ValidateDashboardEtags() bundle.ReadOnlyMutator {
+	return &validateDashboardEtags{}
+}
+
+type validateDashboardEtags struct{ bundle.RO }
+
+func (v *validateDashboardEtags) Name() string {
+	return "validate:validate_dashboard_etags"
+}
+
+func (v *validateDashboardEtags) Apply(ctx context.Context, b *bundle.Bundle) diag.Diagnostics {
+	// No dashboards should have etags set. They are purely internal state.
+	for k, dashboard := range b.Config.Resources.Dashboards {
+		if dashboard.Etag != "" {
+			return diag.Diagnostics{
+				{
+					Severity:  diag.Error,
+					Summary:   fmt.Sprintf("dashboard %q has an etag set. Etags must not be set in bundle configuration", dashboard.DisplayName),
+					Paths:     []dyn.Path{dyn.MustPathFromString("resources.dashboards." + k)},
+					Locations: b.Config.GetLocations("resources.dashboards." + k),
+				},
+			}
+		}
+	}
+	return nil
+}
diff --git a/bundle/phases/initialize.go b/bundle/phases/initialize.go
index 9db68efb5a6..93a291bca33 100644
--- a/bundle/phases/initialize.go
+++ b/bundle/phases/initialize.go
@@ -142,6 +142,9 @@ func Initialize(ctx context.Context, b *bundle.Bundle) {
 		// Validate that all fields with enum values specified are set to a valid value.
 		validate.Enum(),
 
+		// Validate that no dashboard etags are set. They are purely internal state and should not be set by the user.
+		validate.ValidateDashboardEtags(),
+
 		// Reads (typed): b.Config.Permissions (checks if current user or their groups have CAN_MANAGE permissions)
 		// Reads (typed): b.Config.Workspace.CurrentUser (gets current user information)
 		// Provides diagnostic recommendations if the current deployment identity isn't explicitly granted CAN_MANAGE permissions