diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index d24afeef8..1df10c1c1 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -10,8 +10,8 @@ New Features
 * Add Clickhouse profile mapping by @roadan and @pankajastro in #353 and #1016
 * Support ``static_index.html`` docs by @dwreeves in #999
 * (WIP) Support caching dbt ls output in Airflow variable in #1014 by @tatiana
-   - different approach than 1.5.0a1 and 1.5.0a2
-   - fix log for TaskGroup
+   - a3 & a4: different approach than 1.5.0a1 and 1.5.0a2
+   - a4: introduce CachePurgeConfig
 
 Others
 
diff --git a/cosmos/cache.py b/cosmos/cache.py
index 1e0b341f0..2ba6b8d14 100644
--- a/cosmos/cache.py
+++ b/cosmos/cache.py
@@ -1,13 +1,19 @@
 from __future__ import annotations
 
+import functools
+import hashlib
+import os
 import shutil
+import time
 from pathlib import Path
 
 import msgpack
+from airflow.models import Variable
 from airflow.models.dag import DAG
 from airflow.utils.task_group import TaskGroup
 
 from cosmos import settings
+from cosmos.config import CachePurgeConfig
 from cosmos.constants import DBT_MANIFEST_FILE_NAME, DBT_TARGET_DIR_NAME
 from cosmos.dbt.project import get_partial_parse_path
 from cosmos.log import get_logger
@@ -171,3 +177,32 @@ def _copy_partial_parse_to_project(partial_parse_filepath: Path, project_path: P
 
     if source_manifest_filepath.exists():
         shutil.copy(str(source_manifest_filepath), str(target_manifest_filepath))
+
+
+@functools.lru_cache
+def should_use_cache() -> bool:
+    return settings.enable_cache and settings.experimental_cache
+
+
+def calculate_current_version(cache_identifier: str, project_dir: Path, cache_purge_config: CachePurgeConfig) -> str:
+    start_time = time.process_time()
+
+    # Combined value for when the dbt project directory files were last modified
+    # This is fast (e.g. 0.01s for jaffle shop, 0.135s for a 5k models dbt folder)
+    dbt_combined_last_modified = sum([path.stat().st_mtime for path in project_dir.glob("**/*")])
+
+    # The performance for the following will depend on the user's configuration
+    files_modified_time = sum(path.stat().st_mtime for path in cache_purge_config.file_paths)
+    airflow_vars = [Variable.get(var_name, "") for var_name in cache_purge_config.airflow_vars]
+    hash_airflow_vars = hashlib.md5("".join(airflow_vars).encode()).hexdigest()
+    envvars = [os.getenv(envvar_name, "") for envvar_name in cache_purge_config.env_vars]
+    hash_envvars = hashlib.md5("".join(envvars).encode()).hexdigest()
+
+    elapsed_time = time.process_time() - start_time
+    logger.info(f"Cosmos performance: time to calculate {cache_identifier} current version: {elapsed_time}")
+    return f"{dbt_combined_last_modified},{files_modified_time},{hash_airflow_vars},{hash_envvars}"
+
+
+@functools.lru_cache
+def was_project_modified(previous_version: str, current_version: str) -> bool:
+    return previous_version != current_version
diff --git a/cosmos/config.py b/cosmos/config.py
index 820833e6c..3479f4b63 100644
--- a/cosmos/config.py
+++ b/cosmos/config.py
@@ -215,6 +215,13 @@ def is_manifest_available(self) -> bool:
         return self.manifest_path.exists()
 
 
+@dataclass
+class CachePurgeConfig:
+    file_paths: list[Path] = field(default_factory=lambda: list())
+    airflow_vars: list[str] = field(default_factory=lambda: list())
+    env_vars: list[str] = field(default_factory=lambda: list())
+
+
 @dataclass
 class ProfileConfig:
     """
diff --git a/cosmos/converter.py b/cosmos/converter.py
index 43eb338e5..7c492a43a 100644
--- a/cosmos/converter.py
+++ b/cosmos/converter.py
@@ -16,7 +16,7 @@
 
 from cosmos import cache, settings
 from cosmos.airflow.graph import build_airflow_graph
-from cosmos.config import ExecutionConfig, ProfileConfig, ProjectConfig, RenderConfig
+from cosmos.config import CachePurgeConfig, ExecutionConfig, ProfileConfig, ProjectConfig, RenderConfig
 from cosmos.constants import ExecutionMode
 from cosmos.dbt.graph import DbtGraph
 from cosmos.dbt.selector import retrieve_by_label
@@ -204,6 +204,7 @@ def __init__(
         profile_config: ProfileConfig | None = None,
         execution_config: ExecutionConfig | None = None,
         render_config: RenderConfig | None = None,
+        cache_purge_config: CachePurgeConfig = CachePurgeConfig(),
         dag: DAG | None = None,
         task_group: TaskGroup | None = None,
         operator_args: dict[str, Any] | None = None,
@@ -241,6 +242,7 @@ def __init__(
             profile_config=profile_config,
             cache_dir=cache_dir,
             cache_identifier=cache_identifier,
+            cache_purge_config=cache_purge_config,
             dbt_vars=dbt_vars,
         )
         self.dbt_graph.load(method=render_config.load_method, execution_mode=execution_config.execution_mode)
diff --git a/cosmos/dbt/graph.py b/cosmos/dbt/graph.py
index d812bd35b..2a34471ba 100644
--- a/cosmos/dbt/graph.py
+++ b/cosmos/dbt/graph.py
@@ -6,6 +6,7 @@
 import platform
 import tempfile
 from dataclasses import dataclass, field
+from datetime import datetime
 from pathlib import Path
 from subprocess import PIPE, Popen
 from typing import Any
@@ -14,7 +15,7 @@
 from airflow.models import Variable
 
 from cosmos import cache, settings
-from cosmos.config import ExecutionConfig, ProfileConfig, ProjectConfig, RenderConfig
+from cosmos.config import CachePurgeConfig, ExecutionConfig, ProfileConfig, ProjectConfig, RenderConfig
 from cosmos.constants import (
     DBT_LOG_DIR_NAME,
     DBT_LOG_FILENAME,
@@ -133,6 +134,7 @@ class DbtGraph:
     nodes: dict[str, DbtNode] = dict()
     filtered_nodes: dict[str, DbtNode] = dict()
     load_method: LoadMode = LoadMode.AUTOMATIC
+    current_version: str = ""
 
     def __init__(
         self,
@@ -142,6 +144,7 @@ def __init__(
         profile_config: ProfileConfig | None = None,
         cache_dir: Path | None = None,
         cache_identifier: str = "UNDEFINED",
+        cache_purge_config: CachePurgeConfig | None = None,
         # dbt_vars only supported for LegacyDbtProject
         dbt_vars: dict[str, str] | None = None,
     ):
@@ -151,6 +154,7 @@ def __init__(
         self.execution_config = execution_config
         self.cache_dir = cache_dir
         self.cache_identifier = cache_identifier
+        self.cache_purge_config = cache_purge_config or CachePurgeConfig()
         self.dbt_vars = dbt_vars or {}
 
     def load(
@@ -202,13 +206,29 @@ def load_via_dbt_ls_cache(self) -> bool:
         """
         logger.info(f"Trying to parse the dbt project using dbt ls cache {self.cache_identifier}...")
         if settings.enable_cache and settings.experimental_cache:
-            dbt_ls_cache = Variable.get(self.cache_identifier, "")
-            if dbt_ls_cache:
+            project_path = self.render_config.project_path
+
+            try:
+                cache_dict = Variable.get(self.cache_identifier, deserialize_json=True)
+            except (json.decoder.JSONDecodeError, KeyError):
+                logger.info(f"Cosmos performance: Cache miss for {self.cache_identifier}")
+                return False
+            else:
+                logger.info(f"Cosmos performance: Cache hit for {self.cache_identifier}")
+
+            cache_version = cache_dict["version"]
+            dbt_ls_cache = cache_dict["dbt_ls"]
+
+            current_version = cache.calculate_current_version(
+                self.cache_identifier, project_path, self.cache_purge_config  # type: ignore
+            )
+
+            if dbt_ls_cache and not cache.was_project_modified(cache_version, current_version):
                 logger.info(
                     f"Cosmos performance [{platform.node()}|{os.getpid()}]: The cache size for {self.cache_identifier} is {len(dbt_ls_cache.encode('utf-8'))}"
                 )
                 self.load_method = LoadMode.DBT_LS_CACHE
-                project_path = self.render_config.project_path
+
                 nodes = parse_dbt_ls_output(project_path=project_path, ls_stdout=dbt_ls_cache)
                 self.nodes = nodes
                 self.filtered_nodes = nodes
@@ -249,7 +269,14 @@ def run_dbt_ls(
                     logger.debug(line.strip())
 
         if settings.enable_cache and settings.experimental_cache:
-            Variable.set(self.cache_identifier, stdout)
+            cache_dict = {
+                "version": cache.calculate_current_version(
+                    self.cache_identifier, project_path, self.cache_purge_config
+                ),
+                "dbt_ls": stdout,
+                "last_modified": datetime.now().isoformat(),
+            }
+            Variable.set(self.cache_identifier, cache_dict, serialize_json=True)
 
         nodes = parse_dbt_ls_output(project_path, stdout)
         return nodes
diff --git a/dev/dags/basic_cosmos_task_group.py b/dev/dags/basic_cosmos_task_group.py
index f230e87d4..1a7c5af8a 100644
--- a/dev/dags/basic_cosmos_task_group.py
+++ b/dev/dags/basic_cosmos_task_group.py
@@ -10,6 +10,7 @@
 from airflow.operators.empty import EmptyOperator
 
 from cosmos import DbtTaskGroup, ExecutionConfig, ProfileConfig, ProjectConfig, RenderConfig
+from cosmos.config import CachePurgeConfig
 from cosmos.constants import InvocationMode
 from cosmos.profiles import PostgresUserPasswordProfileMapping
 
@@ -29,6 +30,8 @@
     invocation_mode=InvocationMode.SUBPROCESS,
 )
 
+cache_purge_config = CachePurgeConfig(file_paths=Path(__file__), airflow_vars=["purge_cache"], env_vars=["PURGE_CACHE"])
+
 
 @dag(
     schedule_interval="@daily",