diff --git a/tools/update-version.py b/tools/update-version.py
new file mode 100755
index 0000000..0fa83f7
--- /dev/null
+++ b/tools/update-version.py
@@ -0,0 +1,98 @@
+#!/usr/bin/env python3
+#
+# Copyright 2024 Rimas Misevičius
+# Distributed under the BSD-style license that can be
+# found in the LICENSE file.
+import re
+
+VERSION_NUMBER_COUNT = 3
+VERSION_REGEX = "\\.".join(["[0-9]+"] * VERSION_NUMBER_COUNT)
+
+VERSION_HEADER_FILE = "include/upa/url_version.h"
+VERSION_MACRO_NAME = "UPA_URL_VERSION"
+VERSION_NUM_REGEX = f"#define[ \t]+{VERSION_MACRO_NAME}_([A-Z]+)[ \t]+([0-9]+)"
+VERSION_STR_REGEX = f"#define[ \t]+{VERSION_MACRO_NAME}[ \t]+\"({VERSION_REGEX})\""
+
+DOC_FILE = "README.md"
+DOC_VERSION_REGEX = f"[v@]({VERSION_REGEX})"
+
+def get_version_str(version: dict):
+    return ".".join(map(str, version.values()))
+
+def print_version(text: str, version: dict):
+    print(text)
+    for n, (key, val) in enumerate(version.items()):
+        print(f" {n + 1}) {key}: {val}")
+
+def write_to_file(file_path: str, text: str):
+    with open(file_path, "w") as file:
+        file.write(text)
+    print("Updated file:", file_path)
+
+def update_version_header_file(version: dict):
+    new_text = ""
+    with open(VERSION_HEADER_FILE, "r") as file:
+        for line_nl in file:
+            match = re.search(VERSION_NUM_REGEX, line_nl)
+            if match:
+                line_nl = line_nl[:match.start(2)] + str(version[match.group(1)]) + line_nl[match.end(2):]
+            else:
+                match = re.search(VERSION_STR_REGEX, line_nl)
+                if match:
+                    line_nl = line_nl[:match.start(1)] + get_version_str(version) + line_nl[match.end(1):]
+            new_text += line_nl
+    write_to_file(VERSION_HEADER_FILE, new_text)
+
+def update_documentation(version: dict):
+    new_text = ""
+    in_cmake = False
+    with open(DOC_FILE, "r") as file:
+        for line_nl in file:
+            # remove ending newline character
+            line = line_nl.rstrip()
+            if not in_cmake:
+                if line == "```cmake":
+                    in_cmake = True
+            elif line == "```":
+                in_cmake = False
+            else:
+                match = re.search(DOC_VERSION_REGEX, line_nl)
+                if match:
+                    line_nl = line_nl[:match.start(1)] + get_version_str(version) + line_nl[match.end(1):]
+            new_text += line_nl
+    write_to_file(DOC_FILE, new_text)
+
+def main():
+    version = {}
+
+    print(f"Reading the version from {VERSION_HEADER_FILE}")
+    with open(VERSION_HEADER_FILE, "r") as file:
+        for line in file:
+            match = re.search(VERSION_NUM_REGEX, line)
+            if match:
+                version[match.group(1)] = int(match.group(2))
+
+    print_version("Current version:", version)
+    if len(version) != VERSION_NUMBER_COUNT:
+        print(f"Error: version must contain {VERSION_NUMBER_COUNT} numbers.")
+        return
+
+    ind = input(f"Which version number to increment? (1...{VERSION_NUMBER_COUNT}): ")
+    if ind == "" or int(ind) < 1 or int(ind) > VERSION_NUMBER_COUNT:
+        return
+
+    # Update `version` dictionary with new version
+    ind = int(ind) - 1
+    for n, (key, val) in enumerate(version.items()):
+        if n == ind:
+            version[key] = val + 1
+        elif n > ind:
+            version[key] = 0
+
+    print_version("New version:", version)
+    if input("Update files with new version? (Y/N): ").upper() == "Y":
+        update_version_header_file(version)
+        update_documentation(version)
+
+if __name__ == "__main__":
+    main()