diff --git a/.changeset/hip-pets-glow.md b/.changeset/hip-pets-glow.md
new file mode 100644
index 0000000000..2b988c0d4c
--- /dev/null
+++ b/.changeset/hip-pets-glow.md
@@ -0,0 +1,5 @@
+---
+'@backstage/config-loader': patch
+---
+
+From now on the `$file` placeholder will trim the whitespaces and newline characters from the end of the file it reads.
diff --git a/packages/config-loader/src/lib/transform/include.test.ts b/packages/config-loader/src/lib/transform/include.test.ts
index 0913b31f66..c80efe6785 100644
--- a/packages/config-loader/src/lib/transform/include.test.ts
+++ b/packages/config-loader/src/lib/transform/include.test.ts
@@ -49,6 +49,8 @@ const readFile = jest.fn(async (path: string) => {
   const content = (
     {
       [resolvePath(root, 'my-secret')]: 'secret',
+      [resolvePath(root, 'with-newline-at-the-end')]:
+        'value without newline at the end\n\n',
       [resolvePath(root, 'my-data.json')]: '{"a":{"b":{"c":42}}}',
       [resolvePath(root, 'my-data.yaml')]: 'some:\n yaml:\n  key: 7',
       [resolvePath(root, 'my-data.yml')]: 'different: { key: hello }',
@@ -92,6 +94,14 @@ describe('includeTransform', () => {
       includeTransform({ $file: 'no-secret' }, root),
     ).rejects.toThrow('File not found!');
   });
+  it('should trim newlines from end of file', async () => {
+    await expect(
+      includeTransform({ $file: 'with-newline-at-the-end' }, root),
+    ).resolves.toEqual({
+      applied: true,
+      value: 'value without newline at the end',
+    });
+  });
 
   it('should include env vars', async () => {
     await expect(includeTransform({ $env: 'SECRET' }, root)).resolves.toEqual({
diff --git a/packages/config-loader/src/lib/transform/include.ts b/packages/config-loader/src/lib/transform/include.ts
index 569b61c82c..84e4a9294d 100644
--- a/packages/config-loader/src/lib/transform/include.ts
+++ b/packages/config-loader/src/lib/transform/include.ts
@@ -73,7 +73,7 @@ export function createIncludeTransform(
       case '$file':
         try {
           const value = await readFile(resolvePath(baseDir, includeValue));
-          return { applied: true, value };
+          return { applied: true, value: value.trimEnd() };
         } catch (error) {
           throw new Error(`failed to read file ${includeValue}, ${error}`);
         }