diff --git a/.changeset/pink-months-hammer.md b/.changeset/pink-months-hammer.md
new file mode 100644
index 0000000000..20a484a389
--- /dev/null
+++ b/.changeset/pink-months-hammer.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-permission-backend': patch
+---
+
+Moved `permissionModuleAllowAllPolicy` to `@backstage/plugin-permission-backend-module-allow-all-policy`
diff --git a/.changeset/tall-items-clap.md b/.changeset/tall-items-clap.md
new file mode 100644
index 0000000000..613c280cbe
--- /dev/null
+++ b/.changeset/tall-items-clap.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-permission-backend-module-allow-all-policy': minor
+---
+
+Created package with policy `permissionModuleAllowAllPolicy`
diff --git a/packages/backend-next/package.json b/packages/backend-next/package.json
index ea832c60fb..d8c90f6850 100644
--- a/packages/backend-next/package.json
+++ b/packages/backend-next/package.json
@@ -41,6 +41,7 @@
     "@backstage/plugin-lighthouse-backend": "workspace:^",
     "@backstage/plugin-linguist-backend": "workspace:^",
     "@backstage/plugin-permission-backend": "workspace:^",
+    "@backstage/plugin-permission-backend-module-allow-all-policy": "workspace:^",
     "@backstage/plugin-permission-common": "workspace:^",
     "@backstage/plugin-permission-node": "workspace:^",
     "@backstage/plugin-proxy-backend": "workspace:^",
diff --git a/packages/backend-next/src/index.ts b/packages/backend-next/src/index.ts
index f3b1ea06f8..6f736a2033 100644
--- a/packages/backend-next/src/index.ts
+++ b/packages/backend-next/src/index.ts
@@ -18,10 +18,8 @@ import { createBackend } from '@backstage/backend-defaults';
 import { appPlugin } from '@backstage/plugin-app-backend/alpha';
 import { catalogPlugin } from '@backstage/plugin-catalog-backend/alpha';
 import { kubernetesPlugin } from '@backstage/plugin-kubernetes-backend/alpha';
-import {
-  permissionModuleAllowAllPolicy,
-  permissionPlugin,
-} from '@backstage/plugin-permission-backend/alpha';
+import { permissionPlugin } from '@backstage/plugin-permission-backend/alpha';
+import { permissionModuleAllowAllPolicy } from '@backstage/plugin-permission-backend-module-allow-all-policy';
 import { scaffolderPlugin } from '@backstage/plugin-scaffolder-backend/alpha';
 import { catalogModuleTemplateKind } from '@backstage/plugin-scaffolder-backend/alpha';
 import { searchModuleCatalogCollator } from '@backstage/plugin-search-backend-module-catalog/alpha';
diff --git a/plugins/permission-backend-module-policy-allow-all/.eslintrc.js b/plugins/permission-backend-module-policy-allow-all/.eslintrc.js
new file mode 100644
index 0000000000..e2a53a6ad2
--- /dev/null
+++ b/plugins/permission-backend-module-policy-allow-all/.eslintrc.js
@@ -0,0 +1 @@
+module.exports = require('@backstage/cli/config/eslint-factory')(__dirname);
diff --git a/plugins/permission-backend-module-policy-allow-all/README.md b/plugins/permission-backend-module-policy-allow-all/README.md
new file mode 100644
index 0000000000..1cdeadcf95
--- /dev/null
+++ b/plugins/permission-backend-module-policy-allow-all/README.md
@@ -0,0 +1,5 @@
+# @backstage/plugin-permission-backend-module-allow-all-policy
+
+The allow all policy backend module for the permission plugin.
+
+_This plugin was created through the Backstage CLI_
diff --git a/plugins/permission-backend-module-policy-allow-all/api-report.md b/plugins/permission-backend-module-policy-allow-all/api-report.md
new file mode 100644
index 0000000000..a965e9fa54
--- /dev/null
+++ b/plugins/permission-backend-module-policy-allow-all/api-report.md
@@ -0,0 +1,10 @@
+## API Report File for "@backstage/plugin-permission-backend-module-allow-all-policy"
+
+> Do not edit this file. It is a report generated by [API Extractor](https://api-extractor.com/).
+
+```ts
+import { BackendFeature } from '@backstage/backend-plugin-api';
+
+// @public
+export const permissionModuleAllowAllPolicy: () => BackendFeature;
+```
diff --git a/plugins/permission-backend-module-policy-allow-all/package.json b/plugins/permission-backend-module-policy-allow-all/package.json
new file mode 100644
index 0000000000..71a02539af
--- /dev/null
+++ b/plugins/permission-backend-module-policy-allow-all/package.json
@@ -0,0 +1,39 @@
+{
+  "name": "@backstage/plugin-permission-backend-module-allow-all-policy",
+  "description": "Allow all policy backend module for the permission plugin.",
+  "version": "0.0.0",
+  "main": "src/index.ts",
+  "types": "src/index.ts",
+  "license": "Apache-2.0",
+  "publishConfig": {
+    "access": "public",
+    "main": "dist/index.cjs.js",
+    "types": "dist/index.d.ts"
+  },
+  "backstage": {
+    "role": "backend-plugin-module"
+  },
+  "scripts": {
+    "start": "backstage-cli package start",
+    "build": "backstage-cli package build",
+    "lint": "backstage-cli package lint",
+    "test": "backstage-cli package test",
+    "clean": "backstage-cli package clean",
+    "prepack": "backstage-cli package prepack",
+    "postpack": "backstage-cli package postpack"
+  },
+  "dependencies": {
+    "@backstage/backend-common": "workspace:^",
+    "@backstage/backend-plugin-api": "workspace:^",
+    "@backstage/plugin-auth-node": "workspace:^",
+    "@backstage/plugin-permission-common": "workspace:^",
+    "@backstage/plugin-permission-node": "workspace:^"
+  },
+  "devDependencies": {
+    "@backstage/backend-test-utils": "workspace:^",
+    "@backstage/cli": "workspace:^"
+  },
+  "files": [
+    "dist"
+  ]
+}
diff --git a/plugins/permission-backend-module-policy-allow-all/src/index.ts b/plugins/permission-backend-module-policy-allow-all/src/index.ts
new file mode 100644
index 0000000000..f2e9b46bb5
--- /dev/null
+++ b/plugins/permission-backend-module-policy-allow-all/src/index.ts
@@ -0,0 +1,23 @@
+/*
+ * Copyright 2023 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+/**
+ * The allow all policy backend module for the permission plugin.
+ *
+ * @packageDocumentation
+ */
+
+export { permissionModuleAllowAllPolicy } from './module';
diff --git a/plugins/permission-backend-module-policy-allow-all/src/module.ts b/plugins/permission-backend-module-policy-allow-all/src/module.ts
new file mode 100644
index 0000000000..47ab202a00
--- /dev/null
+++ b/plugins/permission-backend-module-policy-allow-all/src/module.ts
@@ -0,0 +1,36 @@
+/*
+ * Copyright 2023 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+import { createBackendModule } from '@backstage/backend-plugin-api';
+import { policyExtensionPoint } from '@backstage/plugin-permission-node/alpha';
+import { AllowAllPermissionPolicy } from './policy';
+
+/**
+ * A permission policy module that allows all requests.
+ *
+ * @public
+ */
+export const permissionModuleAllowAllPolicy = createBackendModule({
+  moduleId: 'allowAllPolicy',
+  pluginId: 'permission',
+  register(reg) {
+    reg.registerInit({
+      deps: { policy: policyExtensionPoint },
+      async init({ policy }) {
+        policy.setPolicy(new AllowAllPermissionPolicy());
+      },
+    });
+  },
+});
diff --git a/plugins/permission-backend-module-policy-allow-all/src/policy.ts b/plugins/permission-backend-module-policy-allow-all/src/policy.ts
new file mode 100644
index 0000000000..da853e47db
--- /dev/null
+++ b/plugins/permission-backend-module-policy-allow-all/src/policy.ts
@@ -0,0 +1,36 @@
+/*
+ * Copyright 2023 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import { BackstageIdentityResponse } from '@backstage/plugin-auth-node';
+import {
+  AuthorizeResult,
+  PolicyDecision,
+} from '@backstage/plugin-permission-common';
+import {
+  PermissionPolicy,
+  PolicyQuery,
+} from '@backstage/plugin-permission-node';
+
+export class AllowAllPermissionPolicy implements PermissionPolicy {
+  async handle(
+    _request: PolicyQuery,
+    _user?: BackstageIdentityResponse,
+  ): Promise<PolicyDecision> {
+    return {
+      result: AuthorizeResult.ALLOW,
+    };
+  }
+}
diff --git a/plugins/permission-backend/alpha-api-report.md b/plugins/permission-backend/alpha-api-report.md
index 926691930b..2397ccd9c9 100644
--- a/plugins/permission-backend/alpha-api-report.md
+++ b/plugins/permission-backend/alpha-api-report.md
@@ -5,9 +5,6 @@
 ```ts
 import { BackendFeature } from '@backstage/backend-plugin-api';
 
-// @alpha
-export const permissionModuleAllowAllPolicy: () => BackendFeature;
-
 // @alpha
 export const permissionPlugin: () => BackendFeature;
 
diff --git a/plugins/permission-backend/src/alpha.ts b/plugins/permission-backend/src/alpha.ts
index f6a2bb4f09..5958a52926 100644
--- a/plugins/permission-backend/src/alpha.ts
+++ b/plugins/permission-backend/src/alpha.ts
@@ -14,4 +14,4 @@
  * limitations under the License.
  */
 
-export { permissionPlugin, permissionModuleAllowAllPolicy } from './plugin';
+export { permissionPlugin } from './plugin';
diff --git a/plugins/permission-backend/src/plugin.ts b/plugins/permission-backend/src/plugin.ts
index a131b6e4b4..9cf0024e47 100644
--- a/plugins/permission-backend/src/plugin.ts
+++ b/plugins/permission-backend/src/plugin.ts
@@ -17,18 +17,9 @@
 import { loggerToWinstonLogger } from '@backstage/backend-common';
 import {
   coreServices,
-  createBackendModule,
   createBackendPlugin,
 } from '@backstage/backend-plugin-api';
-import { BackstageIdentityResponse } from '@backstage/plugin-auth-node';
-import {
-  AuthorizeResult,
-  PolicyDecision,
-} from '@backstage/plugin-permission-common';
-import {
-  PermissionPolicy,
-  PolicyQuery,
-} from '@backstage/plugin-permission-node';
+import { PermissionPolicy } from '@backstage/plugin-permission-node';
 import {
   policyExtensionPoint,
   PolicyExtensionPoint,
@@ -46,35 +37,6 @@ class PolicyExtensionPointImpl implements PolicyExtensionPoint {
   }
 }
 
-/**
- * A permission policy module that allows all requests.
- *
- * @alpha
- */
-export const permissionModuleAllowAllPolicy = createBackendModule({
-  moduleId: 'allowAllPolicy',
-  pluginId: 'permission',
-  register(reg) {
-    class AllowAllPermissionPolicy implements PermissionPolicy {
-      async handle(
-        _request: PolicyQuery,
-        _user?: BackstageIdentityResponse,
-      ): Promise<PolicyDecision> {
-        return {
-          result: AuthorizeResult.ALLOW,
-        };
-      }
-    }
-
-    reg.registerInit({
-      deps: { policy: policyExtensionPoint },
-      async init({ policy }) {
-        policy.setPolicy(new AllowAllPermissionPolicy());
-      },
-    });
-  },
-});
-
 /**
  * Permission plugin
  *
@@ -99,7 +61,7 @@ export const permissionPlugin = createBackendPlugin({
         const winstonLogger = loggerToWinstonLogger(logger);
         if (!policies.policy) {
           throw new Error(
-            'No policy module installed! Please install a policy module. If you want to allow all requests, use permissionModuleAllowAllPolicy',
+            'No policy module installed! Please install a policy module. If you want to allow all requests, use @backstage/plugin-permission-backend-module-allow-all-policy permissionModuleAllowAllPolicy',
           );
         }
 
diff --git a/yarn.lock b/yarn.lock
index 73bf45dd3e..26364d92df 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -8166,6 +8166,20 @@ __metadata:
   languageName: unknown
   linkType: soft
 
+"@backstage/plugin-permission-backend-module-allow-all-policy@workspace:^, @backstage/plugin-permission-backend-module-allow-all-policy@workspace:plugins/permission-backend-module-policy-allow-all":
+  version: 0.0.0-use.local
+  resolution: "@backstage/plugin-permission-backend-module-allow-all-policy@workspace:plugins/permission-backend-module-policy-allow-all"
+  dependencies:
+    "@backstage/backend-common": "workspace:^"
+    "@backstage/backend-plugin-api": "workspace:^"
+    "@backstage/backend-test-utils": "workspace:^"
+    "@backstage/cli": "workspace:^"
+    "@backstage/plugin-auth-node": "workspace:^"
+    "@backstage/plugin-permission-common": "workspace:^"
+    "@backstage/plugin-permission-node": "workspace:^"
+  languageName: unknown
+  linkType: soft
+
 "@backstage/plugin-permission-backend@workspace:^, @backstage/plugin-permission-backend@workspace:plugins/permission-backend":
   version: 0.0.0-use.local
   resolution: "@backstage/plugin-permission-backend@workspace:plugins/permission-backend"
@@ -25770,6 +25784,7 @@ __metadata:
     "@backstage/plugin-lighthouse-backend": "workspace:^"
     "@backstage/plugin-linguist-backend": "workspace:^"
     "@backstage/plugin-permission-backend": "workspace:^"
+    "@backstage/plugin-permission-backend-module-allow-all-policy": "workspace:^"
     "@backstage/plugin-permission-common": "workspace:^"
     "@backstage/plugin-permission-node": "workspace:^"
     "@backstage/plugin-proxy-backend": "workspace:^"