diff --git a/.ci/azure/linux.yml b/.ci/azure/linux.yml
index 4c41f1ddd..37b9e94cf 100644
--- a/.ci/azure/linux.yml
+++ b/.ci/azure/linux.yml
@@ -172,7 +172,7 @@ jobs:
       python -m pip install -r $(REPO_DIR)/modules/custom_operations/tests/requirements.txt
       python -m pip install $(INSTALL_DIR)/tools/openvino-*.whl
       python -m pip install $(OPENVINO_REPO_DIR)/tools/mo/
-      python -m pip install $(REPO_DIR)/modules/custom_operations/user_ie_extensions/tokenizer/python/.[all]
+      python -m pip install $(REPO_DIR)/modules/custom_operations/.[all]
     workingDirectory: $(WORK_DIR)
     displayName: 'Create virtual env'
 
diff --git a/.ci/azure/mac.yml b/.ci/azure/mac.yml
index 121a19029..946f57609 100644
--- a/.ci/azure/mac.yml
+++ b/.ci/azure/mac.yml
@@ -163,7 +163,7 @@ jobs:
       python -m pip install -r $(REPO_DIR)/modules/custom_operations/tests/requirements.txt
       python -m pip install $(OPENVINO_REPO_DIR)/tools/mo/
       python -m pip install $(INSTALL_DIR)/tools/openvino-*.whl
-      python -m pip install $(REPO_DIR)/modules/custom_operations/user_ie_extensions/tokenizer/python/.[transformers]
+      python -m pip install $(REPO_DIR)/modules/custom_operations/.[transformers]
     workingDirectory: $(WORK_DIR)
     displayName: 'Create virtual env'
 
diff --git a/.ci/azure/windows.yml b/.ci/azure/windows.yml
index c04b95af8..3c0536a29 100644
--- a/.ci/azure/windows.yml
+++ b/.ci/azure/windows.yml
@@ -104,6 +104,7 @@ jobs:
       $(PYTHON_EXE) -m pip install -r $(OPENVINO_REPO_DIR)\src\bindings\python\requirements.txt
       $(PYTHON_EXE) -m pip install -r $(REPO_DIR)\modules\custom_operations\tests\requirements.txt
       $(PYTHON_EXE) -m pip install $(OPENVINO_REPO_DIR)\tools\mo
+      $(PYTHON_EXE) -m pip install $(REPO_DIR)\modules\custom_operations\.[all]
       powershell -command "Set-ExecutionPolicy Bypass -Scope Process -Force; iex ((New-Object System.Net.WebClient).DownloadString('https://chocolatey.org/install.ps1'))"
       choco install opencv -y
     workingDirectory: $(WORK_DIR)
@@ -180,3 +181,9 @@ jobs:
       $(PYTHON_EXE) -m pytest -k "not sparse_conv" tests\run_tests.py
     workingDirectory: $(REPO_DIR)\modules\custom_operations
     displayName: 'Custom user operation tests'
+
+  - script: |
+      call $(SETUPVARS) -pyver 3.8 && ^
+      $(PYTHON_EXE) -m pytest --tb=no tokenizers_test.py
+    workingDirectory: $(REPO_DIR)\modules\custom_operations\user_ie_extensions\tokenizer\python\tests
+    displayName: 'Tokenizers extension regression test'
diff --git a/modules/custom_operations/pyproject.toml b/modules/custom_operations/pyproject.toml
new file mode 100644
index 000000000..416bc6ccf
--- /dev/null
+++ b/modules/custom_operations/pyproject.toml
@@ -0,0 +1,58 @@
+[project]
+name = "ov_tokenizer"
+version = "0.0.1"
+description = "Convert tokenizers into OpenVINO models"
+requires-python = ">=3.8"
+authors = [
+    { name = "OpenVINO Developers", email = "openvino@intel.com" },
+]
+classifiers = [
+    'Programming Language :: Python :: 3.8',
+    'Programming Language :: Python :: 3.9',
+    'Programming Language :: Python :: 3.10',
+    'Programming Language :: Python :: 3.11',
+]
+
+dependencies = [
+    "openvino>=2023.1",
+    "numpy"
+]
+
+[project.optional-dependencies]
+dev = [
+    "black",
+    "ruff",
+    "pytest",
+]
+transformers = [
+    "transformers[sentencepiece]"
+]
+all = [
+    "ov_tokenizer[dev,transformers]"
+]
+
+
+[tool.black]
+line-length = 119
+target-versions = ["py38", "py39", "py310", "py311", "py312"]
+
+
+[tool.ruff]
+ignore = ["C901", "E501", "E741", "W605"]
+select = ["C", "E", "F", "I", "W"]
+line-length = 119
+
+[tool.ruff.per-file-ignores]
+"__init__.py" = ["F401"]
+"ov_tokenizer/hf_parser.py" = ["F821"]
+
+[tool.ruff.isort]
+lines-after-imports = 2
+
+[build-system]
+requires = [
+    "setuptools>=42",
+    "scikit-build~=0.17.0",
+    "cmake>=3.14"
+]
+build-backend = "setuptools.build_meta"
\ No newline at end of file
diff --git a/modules/custom_operations/setup.py b/modules/custom_operations/setup.py
new file mode 100644
index 000000000..710b52816
--- /dev/null
+++ b/modules/custom_operations/setup.py
@@ -0,0 +1,15 @@
+from skbuild import setup
+from skbuild import constants
+
+setup(
+    packages=["ov_tokenizer"],
+    package_dir={"": "user_ie_extensions/tokenizer/python"},
+    cmake_install_dir="user_ie_extensions/tokenizer/python/ov_tokenizer/libs",
+    cmake_args=['-DCUSTOM_OPERATIONS:STRING=tokenizer',
+                '-DBUILD_FAST_TOKENIZERS=OFF']
+)
+
+# When building extension modules `cmake_install_dir` should always be set to the
+# location of the package you are building extension modules for.
+# Specifying the installation directory in the CMakeLists subtley breaks the relative
+# paths in the helloTargets.cmake file to all of the library components.
\ No newline at end of file
diff --git a/modules/custom_operations/user_ie_extensions/CMakeLists.txt b/modules/custom_operations/user_ie_extensions/CMakeLists.txt
index 433b2b10a..bc5e08031 100644
--- a/modules/custom_operations/user_ie_extensions/CMakeLists.txt
+++ b/modules/custom_operations/user_ie_extensions/CMakeLists.txt
@@ -96,9 +96,9 @@ if(tokenizer IN_LIST CUSTOM_OPERATIONS)
   add_subdirectory(tokenizer)
 
   # post build steps
-  if(extra_dlls)
-      add_custom_command(TARGET ${TARGET_NAME} POST_BUILD
-        COMMAND ${CMAKE_COMMAND} -E copy ${extra_dlls} $<TARGET_FILE_DIR:${TARGET_NAME}>)
+  if(extra_libs)
+    add_custom_command(TARGET ${TARGET_NAME} POST_BUILD
+        COMMAND ${CMAKE_COMMAND} -E copy ${extra_libs} $<TARGET_FILE_DIR:${TARGET_NAME}>)
   endif()
 endif()
 
@@ -108,3 +108,24 @@ target_compile_definitions(${TARGET_NAME} PRIVATE IMPLEMENT_OPENVINO_EXTENSION_A
 
 # TODO: remove
 target_include_directories(${TARGET_NAME} PUBLIC ./include/)
+
+# Wheel packaging using skbuild
+if(DEFINED SKBUILD)
+  # Installing the extension module to the root of the package
+  if(LINUX)
+    set_target_properties(${TARGET_NAME} PROPERTIES INSTALL_RPATH "$ORIGIN")
+    install(TARGETS ${TARGET_NAME} LIBRARY DESTINATION .)
+  elseif(APPLE)
+    set_target_properties(${TARGET_NAME} PROPERTIES INSTALL_RPATH "@loader_path")
+    install(TARGETS ${TARGET_NAME} LIBRARY DESTINATION .)
+  elseif(WIN32 AND X86_64)
+    install(TARGETS ${TARGET_NAME} RUNTIME DESTINATION .)
+  else()
+    message(FATAL "Unsupported build platform")
+  endif()
+
+  if(extra_libs)
+    install(FILES ${extra_libs} DESTINATION .)
+  endif()
+
+endif()
diff --git a/modules/custom_operations/user_ie_extensions/tokenizer/CMakeLists.txt b/modules/custom_operations/user_ie_extensions/tokenizer/CMakeLists.txt
index 1bc875238..c4885a268 100644
--- a/modules/custom_operations/user_ie_extensions/tokenizer/CMakeLists.txt
+++ b/modules/custom_operations/user_ie_extensions/tokenizer/CMakeLists.txt
@@ -163,12 +163,16 @@ set_target_properties(${TARGET_NAME} PROPERTIES COMPILE_OPTIONS "${extra_flags}"
 # Post build steps to copy core_tokenizers dependencies
 #
 
-if(WIN32 AND X86_64)
-  if(BUILD_FAST_TOKENIZERS)
-    # TODO
-  else()
-    set(extra_dlls "${fast_tokenizer_SOURCE_DIR}/lib/core_tokenizers.dll"
-                   "${fast_tokenizer_SOURCE_DIR}/third_party/lib/icudt70.dll"
-                   "${fast_tokenizer_SOURCE_DIR}/third_party/lib/icuuc70.dll" PARENT_SCOPE)
+if(BUILD_FAST_TOKENIZERS)
+  # TODO
+else()
+  if(WIN32 AND X86_64)
+    set(extra_libs "${fast_tokenizer_SOURCE_DIR}/lib/core_tokenizers.dll"
+                  "${fast_tokenizer_SOURCE_DIR}/third_party/lib/icudt70.dll"
+                  "${fast_tokenizer_SOURCE_DIR}/third_party/lib/icuuc70.dll" PARENT_SCOPE)
+  elseif(LINUX)
+    set(extra_libs "${fast_tokenizer_SOURCE_DIR}/lib/libcore_tokenizers.so" PARENT_SCOPE)
+  elseif(APPLE)
+    set(extra_libs "${fast_tokenizer_SOURCE_DIR}/lib/libcore_tokenizers.dylib" PARENT_SCOPE)
   endif()
 endif()
diff --git a/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/__init__.py b/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/__init__.py
index ce757b861..5b86aba3a 100644
--- a/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/__init__.py
+++ b/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/__init__.py
@@ -2,7 +2,45 @@
 # Copyright (C) 2018-2023 Intel Corporation
 # SPDX-License-Identifier: Apache-2.0
 
+import os
+import sys
+
+import openvino
+from openvino.runtime.utils.node_factory import NodeFactory
+
 from .convert_tokenizer import convert_tokenizer
-from .node_factory import init_extension
+from .node_factory import init_extension, _extension_path
 from .str_pack import pack_strings, unpack_strings
 from .utils import add_greedy_decoding, connect_models
+
+_ext_name = "user_ov_extensions"
+if _extension_path:
+    # when the path to extension set manually
+    _ext_libs_path = os.path.dirname(_extension_path)
+else:
+    # python installation case
+    _ext_libs_path = os.path.join(os.path.dirname(__file__), "libs")
+
+if sys.platform == "win32":
+    _ext_path = os.path.join(_ext_libs_path, f'{_ext_name}.dll')
+    if os.path.isdir(_ext_libs_path):
+        # On Windows, with Python >= 3.8, DLLs are no longer imported from the PATH.
+        os.add_dll_directory(os.path.abspath(_ext_libs_path))
+    else:
+        sys.exit(f'Error: extention libriary path {_ext_libs_path} not found')
+elif sys.platform == "darwin":
+    _ext_path = os.path.join(_ext_libs_path, f'lib{_ext_name}.dylib')
+elif sys.platform == "linux":
+    _ext_path = os.path.join(_ext_libs_path, f'lib{_ext_name}.so')
+else:
+    sys.exit(f'Error: extention does not support platform {sys.platform}')
+
+# patching openvino
+old_core_init = openvino.runtime.Core.__init__
+def new_core_init(self, *k, **kw):
+    old_core_init(self, *k, **kw)
+    self.add_extension(_ext_path)
+openvino.runtime.Core.__init__ = new_core_init
+
+_factory = NodeFactory()
+_factory.add_extension(_ext_path)
diff --git a/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/hf_parser.py b/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/hf_parser.py
index 401c8ea2b..92c27b03b 100644
--- a/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/hf_parser.py
+++ b/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/hf_parser.py
@@ -25,7 +25,7 @@
     TOKENIZER_DECODER_NAME,
     TOKENIZER_ENCODER_NAME,
 )
-from .node_factory import factory
+from . import _factory
 from .tokenizer_pipeline import (
     BPETokenizationStep,
     BytesToCharsStep,
@@ -365,7 +365,7 @@ def convert_sentencepiece_model_tokenizer(
         )
     add_bos_token = getattr(hf_tokenizer, "add_bos_token", add_eos_token) or False
 
-    tokenizer_node = factory.create(
+    tokenizer_node = _factory.create(
         "SentencepieceTokenizer",
         [sp_model_node, input_node],
         {
@@ -383,7 +383,7 @@ def convert_sentencepiece_model_tokenizer(
 
     default_value = make_constant_node(hf_tokenizer.pad_token_id or 0, values.element_type)
     broadcast = opset.broadcast(default_value, dense_shape)
-    scatternd_input_ids = factory.create(
+    scatternd_input_ids = _factory.create(
         "ScatterNDUpdate",
         [broadcast, indices, values],  # FIXME: pad left side instead of right
     )
@@ -399,7 +399,7 @@ def convert_sentencepiece_model_tokenizer(
     outputs = scatternd_input_ids.outputs()
 
     if add_attention_mask:
-        attention_mask = factory.create(
+        attention_mask = _factory.create(
             "ScatterNDUpdate",
             [
                 broadcast,
@@ -432,7 +432,7 @@ def convert_sentencepiece_model_tokenizer(
 def get_sp_decoder(sp_model_node: Node, streaming_decoder: bool = False) -> Model:
     token_ids = op.Parameter(Type.i32, PartialShape(["?", "?"]))  # (batch, sequence)
 
-    decoder = factory.create(
+    decoder = _factory.create(
         "SentencepieceStreamDetokenizer" if streaming_decoder else "SentencepieceDetokenizer",
         [sp_model_node, token_ids],
     ).outputs()
@@ -440,7 +440,7 @@ def get_sp_decoder(sp_model_node: Node, streaming_decoder: bool = False) -> Mode
     if streaming_decoder:
         decoder = RegexDecodingStep.replace_sp_spaces().get_ov_subgraph(decoder)
 
-    string_output = factory.create("StringTensorPack", decoder).outputs()
+    string_output = _factory.create("StringTensorPack", decoder).outputs()
     string_output[0].tensor.add_names({STRING_OUTPUT_NAME})
     tokenizer_decoder = Model(string_output, [token_ids], TOKENIZER_DECODER_NAME)
     tokenizer_decoder.validate_nodes_and_infer_types()
diff --git a/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/tokenizer_pipeline.py b/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/tokenizer_pipeline.py
index 74654344a..75e25d45f 100644
--- a/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/tokenizer_pipeline.py
+++ b/modules/custom_operations/user_ie_extensions/tokenizer/python/ov_tokenizer/tokenizer_pipeline.py
@@ -22,7 +22,7 @@
     TOKENIZER_DECODER_NAME,
     TOKENIZER_ENCODER_NAME,
 )
-from .node_factory import factory
+from . import _factory
 from .str_pack import pack_string, pack_strings
 
 
@@ -61,7 +61,7 @@ def create_string_constant_node(value: Union[str, List[str]]) -> op.Constant:
         else:
             # support only 1D strings for now
             ps = pack_strings(value)
-            return factory.create("StringTensorUnpack", op.Constant(ps).outputs())
+            return _factory.create("StringTensorUnpack", op.Constant(ps).outputs())
 
 
 @dataclass
@@ -74,7 +74,7 @@ class NormalizeUnicode(NormalizationStep):
     normalization_form: str = "NFD"
 
     def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
-        return factory.create(
+        return _factory.create(
             "NormalizeUnicode",
             input_nodes,
             {"normalization_form": self.normalization_form},
@@ -84,7 +84,7 @@ def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
 @dataclass
 class CaseFoldStep(NormalizationStep):
     def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
-        return factory.create("CaseFold", input_nodes).outputs()
+        return _factory.create("CaseFold", input_nodes).outputs()
 
 
 @dataclass
@@ -122,7 +122,7 @@ def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
                 self.create_string_constant_node(self.replace_term),
             )
         )
-        return factory.create("RegexNormalization", input_nodes).outputs()
+        return _factory.create("RegexNormalization", input_nodes).outputs()
 
 
 @dataclass
@@ -233,7 +233,7 @@ def digits_splitter(cls, behaviour="isolate") -> "RegexSplitStep":
 
     def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
         input_nodes.extend(self.create_string_constant_node(self.split_pattern).outputs())
-        return factory.create(
+        return _factory.create(
             "RegexSplit",
             input_nodes,
             {
@@ -263,7 +263,7 @@ class BytesToCharsStep(PreTokenizatinStep):
     """Maps chars to other chars for Byte-level BPE Tokenizer"""
 
     def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
-        return factory.create(
+        return _factory.create(
             "BytesToChars",
             input_nodes,
         ).outputs()
@@ -307,7 +307,7 @@ def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
                 *as_node(self.unk_token_id).outputs(),
             )
         )
-        return factory.create(
+        return _factory.create(
             "WordpieceTokenizer",
             input_nodes,
             {
@@ -379,7 +379,7 @@ def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
                 *self.create_string_constant_node(self.merges).outputs(),
             )
         )
-        return factory.create(
+        return _factory.create(
             "BPETokenizer",
             input_nodes,
             {
@@ -587,7 +587,7 @@ def get_ov_subgraph(self, input_nodes):
                 raise UserInputError(f"Unexpected node type in CombineSegments: {type(node)}")
 
         op_inputs.append(make_constant_node(self.segment_ids, Type.i32).output(0))
-        return factory.create("CombineSegments", op_inputs).outputs()
+        return _factory.create("CombineSegments", op_inputs).outputs()
 
 
 @dataclass
@@ -632,7 +632,7 @@ def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
 
         names = [TOKEN_IDS_INPUT_NAME, TOKEN_TYPE_IDS_INPUT_NAME][: len(input_nodes) // 3]
         for i, name in enumerate(names):
-            cur_outputs = factory.create(
+            cur_outputs = _factory.create(
                 "RaggedToDense",
                 input_nodes[3 * i : 3 * (i + 1)] + max_length.outputs() + make_constant_node(0, Type.i32).outputs(),
             ).outputs()
@@ -662,13 +662,13 @@ def get_vocab_node_outputs(self) -> Optional[List[Output]]:
 
     def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
         input_nodes.extend(self.get_vocab_node_outputs())
-        return factory.create("VocabDecoder", input_nodes, {}).outputs()
+        return _factory.create("VocabDecoder", input_nodes, {}).outputs()
 
 
 @dataclass
 class CharsToBytesStep(DecodingStep):
     def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
-        return factory.create("CharsToBytes", input_nodes, {}).outputs()
+        return _factory.create("CharsToBytes", input_nodes, {}).outputs()
 
 
 @dataclass
@@ -690,7 +690,7 @@ def get_ov_subgraph(self, input_nodes: List[Output]) -> List[Output]:
                 *self.create_string_constant_node(self.replace_term).outputs(),
             )
         )
-        return factory.create("RegexNormalization", input_nodes).outputs()
+        return _factory.create("RegexNormalization", input_nodes).outputs()
 
     @classmethod
     def replace_sp_spaces(cls) -> "RegexDecodingStep":
@@ -733,7 +733,7 @@ def get_encoder_ov_subgraph(self) -> Model:
 
         processing_outputs = []
         for input_node in string_inputs:
-            input_node = factory.create("StringTensorUnpack", input_node.outputs()).outputs()
+            input_node = _factory.create("StringTensorUnpack", input_node.outputs()).outputs()
             for step in self.normalization_steps:
                 input_node = step.get_ov_subgraph(input_node)
             input_node = self.add_ragged_dimension(input_node)
@@ -783,7 +783,7 @@ def create_decoding_pipeline(self, input_nodes: List[Output]) -> List[Output]:
             pipeline_step = step.get_ov_subgraph(input_nodes)
             input_nodes = pipeline_step
 
-        return factory.create("StringTensorPack", input_nodes).outputs()
+        return _factory.create("StringTensorPack", input_nodes).outputs()
 
     def get_decoder_ov_subgraph(self) -> Model:
         input_node = op.Parameter(Type.i32, PartialShape(["?", "?"]))