diff --git a/pype/hooks/unreal/pre_workfile_preparation.py b/pype/hooks/unreal/pre_workfile_preparation.py
new file mode 100644
index 0000000000..f0e09669dc
--- /dev/null
+++ b/pype/hooks/unreal/pre_workfile_preparation.py
@@ -0,0 +1,95 @@
+import os
+
+from pype.lib import (
+    PreLaunchHook,
+    ApplicationLaunchFailed
+)
+from pype.hosts.unreal import lib as unreal_lib
+
+
+class UnrealPrelaunchHook(PreLaunchHook):
+    """
+    This hook will check if current workfile path has Unreal
+    project inside. IF not, it initialize it and finally it pass
+    path to the project by environment variable to Unreal launcher
+    shell script.
+    """
+
+    def __init__(self, *args, **kwargs):
+        super().__init__(*args, **kwargs)
+
+        self.signature = "( {} )".format(self.__class__.__name__)
+
+    def execute(self):
+        asset_name = self.data["asset_name"]
+        task_name = self.data["task_name"]
+        workdir = self.env["AVALON_WORKDIR"]
+        engine_version = self.app_name.split("_")[-1]
+        unreal_project_name = f"{asset_name}_{task_name}"
+
+        # Unreal is sensitive about project names longer then 20 chars
+        if len(unreal_project_name) > 20:
+            self.log.warning((
+                f"Project name exceed 20 characters ({unreal_project_name})!"
+            ))
+
+        # Unreal doesn't accept non alphabet characters at the start
+        # of the project name. This is because project name is then used
+        # in various places inside c++ code and there variable names cannot
+        # start with non-alpha. We append 'P' before project name to solve it.
+        # 😱
+        if not unreal_project_name[:1].isalpha():
+            self.log.warning((
+                "Project name doesn't start with alphabet "
+                f"character ({unreal_project_name}). Appending 'P'"
+            ))
+            unreal_project_name = f"P{unreal_project_name}"
+
+        project_path = os.path.join(workdir, unreal_project_name)
+
+        self.log.info((
+            f"{self.signature} requested UE4 version: "
+            f"[ {engine_version} ]"
+        ))
+
+        detected = unreal_lib.get_engine_versions()
+        detected_str = ', '.join(detected.keys()) or 'none'
+        self.log.info((
+            f"{self.signature} detected UE4 versions: "
+            f"[ {detected_str} ]"
+        ))
+
+        engine_version = ".".join(engine_version.split(".")[:2])
+        if engine_version not in detected.keys():
+            raise ApplicationLaunchFailed((
+                f"{self.signature} requested version not "
+                f"detected [ {engine_version} ]"
+            ))
+
+        os.makedirs(project_path, exist_ok=True)
+
+        project_file = os.path.join(
+            project_path,
+            f"{unreal_project_name}.uproject"
+        )
+        if not os.path.isfile(project_file):
+            engine_path = detected[engine_version]
+            self.log.info((
+                f"{self.signature} creating unreal "
+                f"project [ {unreal_project_name} ]"
+            ))
+            # Set "AVALON_UNREAL_PLUGIN" to current process environment for
+            # execution of `create_unreal_project`
+            env_key = "AVALON_UNREAL_PLUGIN"
+            if self.env.get(env_key):
+                os.environ[env_key] = self.env[env_key]
+
+            unreal_lib.create_unreal_project(
+                unreal_project_name,
+                engine_version,
+                project_path,
+                engine_path=engine_path
+            )
+
+        # Append project file to launch arguments
+        self.launch_context.launch_args.append(f"\"{project_file}\"")