diff --git a/cli/azd/cmd/init.go b/cli/azd/cmd/init.go
index b55f8bd36fd..e56de9050be 100644
--- a/cli/azd/cmd/init.go
+++ b/cli/azd/cmd/init.go
@@ -23,6 +23,7 @@ import (
 	"github.com/azure/azure-dev/cli/azd/internal/tracing"
 	"github.com/azure/azure-dev/cli/azd/internal/tracing/fields"
 	"github.com/azure/azure-dev/cli/azd/pkg/alpha"
+	"github.com/azure/azure-dev/cli/azd/pkg/config"
 	"github.com/azure/azure-dev/cli/azd/pkg/environment"
 	"github.com/azure/azure-dev/cli/azd/pkg/environment/azdcontext"
 	"github.com/azure/azure-dev/cli/azd/pkg/exec"
@@ -141,6 +142,7 @@ type initAction struct {
 	azd               workflow.AzdCommandRunner
 	agentFactory      *agent.AgentFactory
 	consentManager    consent.ConsentManager
+	configManager     config.UserConfigManager
 }
 
 func newInitAction(
@@ -157,6 +159,7 @@ func newInitAction(
 	azd workflow.AzdCommandRunner,
 	agentFactory *agent.AgentFactory,
 	consentManager consent.ConsentManager,
+	configManager config.UserConfigManager,
 ) actions.Action {
 	return &initAction{
 		lazyAzdCtx:        lazyAzdCtx,
@@ -172,6 +175,7 @@ func newInitAction(
 		azd:               azd,
 		agentFactory:      agentFactory,
 		consentManager:    consentManager,
+		configManager:     configManager,
 	}
 }
 
@@ -252,7 +256,7 @@ func (i *initAction) Run(ctx context.Context) (*actions.ActionResult, error) {
 			initTypeSelect = initEnvironment
 		} else {
 			// Prompt for init type for new projects
-			initTypeSelect, err = promptInitType(i.console, ctx, i.featuresManager)
+			initTypeSelect, err = promptInitType(i.console, ctx, i.featuresManager, i.configManager)
 			if err != nil {
 				return nil, err
 			}
@@ -590,15 +594,16 @@ const (
 	initWithAgent
 )
 
-func promptInitType(console input.Console, ctx context.Context, featuresManager *alpha.FeatureManager) (initType, error) {
+func promptInitType(
+	console input.Console,
+	ctx context.Context,
+	featuresManager *alpha.FeatureManager,
+	configManager config.UserConfigManager,
+) (initType, error) {
 	options := []string{
 		"Scan current directory", // This now covers minimal project creation too
 		"Select a template",
-	}
-
-	// Only include AZD agent option if the LLM feature is enabled
-	if featuresManager.IsEnabled(llm.FeatureLlm) {
-		options = append(options, fmt.Sprintf("Use agent mode %s", color.YellowString("(Alpha)")))
+		fmt.Sprintf("Use agent mode %s", color.YellowString("(Alpha)")),
 	}
 
 	selection, err := console.Select(ctx, input.ConsoleOptions{
@@ -615,11 +620,35 @@ func promptInitType(console input.Console, ctx context.Context, featuresManager
 	case 1:
 		return initAppTemplate, nil
 	case 2:
-		// Only return initWithCopilot if the LLM feature is enabled and we have 3 options
-		if featuresManager.IsEnabled(llm.FeatureLlm) {
-			return initWithAgent, nil
+		if !featuresManager.IsEnabled(llm.FeatureLlm) {
+			azdConfig, err := configManager.Load()
+			if err != nil {
+				return initUnknown, fmt.Errorf("failed to load config: %w", err)
+			}
+
+			err = azdConfig.Set("alpha.llm", "on")
+			if err != nil {
+				return initUnknown, fmt.Errorf("failed to set alpha.llm config: %w", err)
+			}
+
+			err = configManager.Save(azdConfig)
+			if err != nil {
+				return initUnknown, fmt.Errorf("failed to save config: %w", err)
+			}
+
+			console.Message(ctx, "\nThe azd agent feature has been enabled to support this new experience."+
+				" To turn off in the future run `azd config unset alpha.llm`.")
+
+			err = azdConfig.Set("ai.agent.model.type", "github-copilot")
+			if err != nil {
+				return initUnknown, fmt.Errorf("failed to set ai.agent.model.type config: %w", err)
+			}
+
+			console.Message(ctx, "\nGitHub Copilot has been enabled to support this new experience."+
+				" To turn off in the future run `azd config unset ai.agent.model.type`.")
 		}
-		fallthrough
+
+		return initWithAgent, nil
 	default:
 		panic("unhandled selection")
 	}
diff --git a/cli/azd/pkg/llm/manager.go b/cli/azd/pkg/llm/manager.go
index cc66d010204..9c9fd542eb6 100644
--- a/cli/azd/pkg/llm/manager.go
+++ b/cli/azd/pkg/llm/manager.go
@@ -135,7 +135,8 @@ func (m Manager) GetDefaultModel(ctx context.Context, opts ...ModelOption) (*Mod
 
 	defaultModelType, ok := userConfig.GetString("ai.agent.model.type")
 	if !ok {
-		return nil, fmt.Errorf("Default model type has not been set")
+		return nil, fmt.Errorf("Default model type has not been set. Set the agent model type with" +
+			" `azd config set ai.agent.model.type github-copilot`.")
 	}
 
 	return m.ModelFactory.CreateModelContainer(ctx, LlmType(defaultModelType), opts...)