diff --git a/.secrets.baseline b/.secrets.baseline
index b841f0a1f..971a16d50 100644
--- a/.secrets.baseline
+++ b/.secrets.baseline
@@ -250,7 +250,7 @@
         "filename": "dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-06-cr.yaml",
         "hashed_secret": "3e513f12b341ed3327bea645a728401b5d0f9ddb",
         "is_verified": false,
-        "line_number": 21
+        "line_number": 22
       }
     ],
     "dp-terraform/helm/rhacs-terraform/charts/secured-cluster/init-bundle.yaml": [
@@ -425,5 +425,5 @@
       }
     ]
   },
-  "generated_at": "2024-10-14T07:07:48Z"
+  "generated_at": "2024-10-17T08:34:41Z"
 }
diff --git a/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-01-namespace.yaml b/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-01-namespace.yaml
index 23ad47594..2b8b68256 100644
--- a/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-01-namespace.yaml
+++ b/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-01-namespace.yaml
@@ -2,3 +2,8 @@ apiVersion: v1
 kind: Namespace
 metadata:
   name: {{ include "observability.namespace" . }}
+  annotations:
+    # Keep the namespace to retain PVCs after uninstall
+    helm.sh/resource-policy: keep
+  labels:
+    argocd.argoproj.io/managed-by: openshift-gitops
diff --git a/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-06-cr.yaml b/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-06-cr.yaml
index babb3858b..ef8cdac96 100644
--- a/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-06-cr.yaml
+++ b/dp-terraform/helm/rhacs-terraform/charts/observability/templates/01-operator-06-cr.yaml
@@ -1,3 +1,4 @@
+{{- if .Values.customResourceEnabled }}
 apiVersion: observability.redhat.com/v1
 kind: Observability
 metadata:
@@ -101,3 +102,4 @@ spec:
           resources:
             requests:
               storage: {{ .Values.prometheus.resources.requests.storage | quote }}
+{{- end }}
diff --git a/dp-terraform/helm/rhacs-terraform/charts/observability/values.yaml b/dp-terraform/helm/rhacs-terraform/charts/observability/values.yaml
index 3cbb434c8..f36de5f49 100644
--- a/dp-terraform/helm/rhacs-terraform/charts/observability/values.yaml
+++ b/dp-terraform/helm/rhacs-terraform/charts/observability/values.yaml
@@ -6,6 +6,7 @@
 # https://github.com/redhat-developer/observability-operator/releases
 observabilityOperatorVersion: "v4.2.1"
 
+customResourceEnabled: true
 github:
   repository: "https://api.github.com/repos/stackrox/rhacs-observability-resources/contents"
   tag: "master"
diff --git a/dp-terraform/test/helm_template_test.go b/dp-terraform/test/helm_template_test.go
index f095a540f..5fc6bf846 100644
--- a/dp-terraform/test/helm_template_test.go
+++ b/dp-terraform/test/helm_template_test.go
@@ -6,10 +6,12 @@ import (
 
 	"github.com/gruntwork-io/terratest/modules/helm"
 	"github.com/gruntwork-io/terratest/modules/k8s"
+	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 	appsv1 "k8s.io/api/apps/v1"
 	corev1 "k8s.io/api/core/v1"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/apis/meta/v1/unstructured"
 )
 
 func TestHelmTemplate_FleetshardSyncDeployment_ServiceAccountTokenAuthType(t *testing.T) {
@@ -277,3 +279,58 @@ func TestHelmTemplate_ObservabilityCR_blackboxExporterEnabled(t *testing.T) {
 		})
 	}
 }
+
+func TestHelmTemplate_ObservabilityCR_enabled(t *testing.T) {
+	t.Parallel()
+
+	tests := []struct {
+		name    string
+		enabled string
+		wantErr string
+	}{
+		{
+			name:    "should enable CR by default",
+			enabled: "true",
+		},
+		{
+			name:    "should not install CR when the value is disabled",
+			enabled: "false",
+			wantErr: "could not find template",
+		},
+		{
+			name:    "should install CR when the value is enabled",
+			enabled: "true",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			values := map[string]string{
+				"secured-cluster.enabled":          "false",
+				"fleetshardSync.managedDB.enabled": "false",
+			}
+			if tt.enabled != "" {
+				values["observability.customResourceEnabled"] = tt.enabled
+			}
+
+			releaseName := "rhacs-terraform"
+			namespaceName := "rhacs"
+			helmChartPath, err := filepath.Abs("../helm/rhacs-terraform")
+			require.NoError(t, err)
+
+			options := &helm.Options{
+				SetValues:      values,
+				KubectlOptions: k8s.NewKubectlOptions("", "", namespaceName),
+			}
+
+			output, err := helm.RenderTemplateE(t, options, helmChartPath, releaseName, []string{"charts/observability/templates/01-operator-06-cr.yaml"})
+			if tt.wantErr != "" {
+				assert.ErrorContainsf(t, err, tt.wantErr, "error = %v, wantErr = %q", err, tt.wantErr)
+			} else {
+				require.NoError(t, err)
+				var observability unstructured.Unstructured
+				helm.UnmarshalK8SYaml(t, output, &observability) // also asserts that there's no error
+			}
+		})
+	}
+}