diff --git a/app/controllers/projects_controller.rb b/app/controllers/projects_controller.rb
index d0051010b65..519d9cd0d52 100644
--- a/app/controllers/projects_controller.rb
+++ b/app/controllers/projects_controller.rb
@@ -472,8 +472,8 @@ class ProjectsController < Projects::ApplicationController
       :suggestion_commit_message,
       :packages_enabled,
       :service_desk_enabled,
-      :merge_commit_template,
-      :squash_commit_template,
+      :merge_commit_template_or_default,
+      :squash_commit_template_or_default,
       project_setting_attributes: project_setting_attributes
     ] + [project_feature_attributes: project_feature_attributes]
   end
diff --git a/app/models/project.rb b/app/models/project.rb
index ebf7a2ac25b..512c6ac1acb 100644
--- a/app/models/project.rb
+++ b/app/models/project.rb
@@ -74,6 +74,21 @@ class Project < ApplicationRecord
 
   GL_REPOSITORY_TYPES = [Gitlab::GlRepository::PROJECT, Gitlab::GlRepository::WIKI, Gitlab::GlRepository::DESIGN].freeze
 
+  MAX_SUGGESTIONS_TEMPLATE_LENGTH = 255
+  MAX_COMMIT_TEMPLATE_LENGTH = 500
+
+  DEFAULT_MERGE_COMMIT_TEMPLATE = <<~MSG.rstrip.freeze
+    Merge branch '%{source_branch}' into '%{target_branch}'
+
+    %{title}
+
+    %{issues}
+
+    See merge request %{reference}
+  MSG
+
+  DEFAULT_SQUASH_COMMIT_TEMPLATE = '%{title}'
+
   cache_markdown_field :description, pipeline: :description
 
   default_value_for :packages_enabled, true
@@ -506,7 +521,7 @@ class Project < ApplicationRecord
   validates :variables, nested_attributes_duplicates: { scope: :environment_scope }
   validates :bfg_object_map, file_size: { maximum: :max_attachment_size }
   validates :max_artifacts_size, numericality: { only_integer: true, greater_than: 0, allow_nil: true }
-  validates :suggestion_commit_message, length: { maximum: 255 }
+  validates :suggestion_commit_message, length: { maximum: MAX_SUGGESTIONS_TEMPLATE_LENGTH }
 
   # Scopes
   scope :pending_delete, -> { where(pending_delete: true) }
@@ -2764,6 +2779,32 @@ class Project < ApplicationRecord
     ].compact.min
   end
 
+  def merge_commit_template_or_default
+    merge_commit_template.presence || DEFAULT_MERGE_COMMIT_TEMPLATE
+  end
+
+  def merge_commit_template_or_default=(value)
+    project_setting.merge_commit_template =
+      if value.blank? || value.delete("\r") == DEFAULT_MERGE_COMMIT_TEMPLATE
+        nil
+      else
+        value
+      end
+  end
+
+  def squash_commit_template_or_default
+    squash_commit_template.presence || DEFAULT_SQUASH_COMMIT_TEMPLATE
+  end
+
+  def squash_commit_template_or_default=(value)
+    project_setting.squash_commit_template =
+      if value.blank? || value.delete("\r") == DEFAULT_SQUASH_COMMIT_TEMPLATE
+        nil
+      else
+        value
+      end
+  end
+
   private
 
   # overridden in EE
diff --git a/app/models/project_setting.rb b/app/models/project_setting.rb
index a3034488c38..c17dff553a0 100644
--- a/app/models/project_setting.rb
+++ b/app/models/project_setting.rb
@@ -16,8 +16,8 @@ class ProjectSetting < ApplicationRecord
 
   self.primary_key = :project_id
 
-  validates :merge_commit_template, length: { maximum: 500 }
-  validates :squash_commit_template, length: { maximum: 500 }
+  validates :merge_commit_template, length: { maximum: Project::MAX_COMMIT_TEMPLATE_LENGTH }
+  validates :squash_commit_template, length: { maximum: Project::MAX_COMMIT_TEMPLATE_LENGTH }
 
   def squash_enabled_by_default?
     %w[always default_on].include?(squash_option)
diff --git a/app/views/projects/_merge_request_merge_commit_template.html.haml b/app/views/projects/_merge_request_merge_commit_template.html.haml
index 1c023ae6ceb..502014b7279 100644
--- a/app/views/projects/_merge_request_merge_commit_template.html.haml
+++ b/app/views/projects/_merge_request_merge_commit_template.html.haml
@@ -5,10 +5,10 @@
   %p.text-secondary
     = s_('ProjectSettings|The commit message used when merging, if the merge method creates a merge commit.')
   .mb-2
-    - default_merge_commit_template = "Merge branch '%{source_branch}' into '%{target_branch}'\n\n%{title}\n\n%{issues}\n\nSee merge request %{reference}"
-    = form.text_area :merge_commit_template, class: 'form-control gl-form-input', rows: 8, maxlength: 500, placeholder: default_merge_commit_template
+    = form.text_area :merge_commit_template_or_default, class: 'form-control gl-form-input', rows: 8, maxlength: Project::MAX_COMMIT_TEMPLATE_LENGTH, placeholder: s_('ProjectSettings|The default template will be applied on save.')
     %p.form-text.text-muted
-      = s_('ProjectSettings|Maximum 500 characters.')
+      = s_('ProjectSettings|Leave empty to use default template.')
+      = sprintf(s_('ProjectSettings|Maximum %{maxLength} characters.'), { maxLength: Project::MAX_COMMIT_TEMPLATE_LENGTH })
       - configure_the_merge_commit_message_help_link_url = help_page_path('user/project/merge_requests/commit_templates.md')
       - configure_the_merge_commit_message_help_link_start = '<a href="%{url}" target="_blank" rel="noopener noreferrer">'.html_safe % { url: configure_the_merge_commit_message_help_link_url }
       = s_('ProjectSettings|%{link_start}What variables can I use?%{link_end}').html_safe % { link_start: configure_the_merge_commit_message_help_link_start, link_end: '</a>'.html_safe }
diff --git a/app/views/projects/_merge_request_merge_suggestions_settings.html.haml b/app/views/projects/_merge_request_merge_suggestions_settings.html.haml
index 9ed21593203..eb2fc05686c 100644
--- a/app/views/projects/_merge_request_merge_suggestions_settings.html.haml
+++ b/app/views/projects/_merge_request_merge_suggestions_settings.html.haml
@@ -7,6 +7,8 @@
   .mb-2
     = form.text_field :suggestion_commit_message, class: 'form-control mb-2', placeholder: Gitlab::Suggestions::CommitMessage::DEFAULT_SUGGESTION_COMMIT_MESSAGE
     %p.form-text.text-muted
+      = s_('ProjectSettings|Leave empty to use default template.')
+      = sprintf(s_('ProjectSettings|Maximum %{maxLength} characters.'), { maxLength: Project::MAX_SUGGESTIONS_TEMPLATE_LENGTH })
       - configure_the_commit_message_for_applied_suggestions_help_link_url = help_page_path('user/project/merge_requests/reviews/suggestions.md', anchor: 'configure-the-commit-message-for-applied-suggestions')
       - configure_the_commit_message_for_applied_suggestions_help_link_start = '<a href="%{url}" target="_blank" rel="noopener noreferrer">'.html_safe % { url: configure_the_commit_message_for_applied_suggestions_help_link_url }
       = s_('ProjectSettings|%{link_start}What variables can I use?%{link_end}').html_safe % { link_start: configure_the_commit_message_for_applied_suggestions_help_link_start, link_end: '</a>'.html_safe }
diff --git a/app/views/projects/_merge_request_squash_commit_template.html.haml b/app/views/projects/_merge_request_squash_commit_template.html.haml
index be1d78154c6..4d1b89bea83 100644
--- a/app/views/projects/_merge_request_squash_commit_template.html.haml
+++ b/app/views/projects/_merge_request_squash_commit_template.html.haml
@@ -5,9 +5,10 @@
   %p.text-secondary
     = s_('ProjectSettings|The commit message used when squashing commits.')
   .mb-2
-    = form.text_area :squash_commit_template, class: 'form-control gl-form-input', rows: 8, maxlength: 500, placeholder: '%{title}'
+    = form.text_area :squash_commit_template_or_default, class: 'form-control gl-form-input', rows: 8, maxlength: Project::MAX_COMMIT_TEMPLATE_LENGTH, placeholder: s_('ProjectSettings|The default template will be applied on save.')
     %p.form-text.text-muted
-      = s_('ProjectSettings|Maximum 500 characters.')
+      = s_('ProjectSettings|Leave empty to use default template.')
+      = sprintf(s_('ProjectSettings|Maximum %{maxLength} characters.'), { maxLength: Project::MAX_COMMIT_TEMPLATE_LENGTH })
       - configure_the_squash_commit_message_help_link_url = help_page_path('user/project/merge_requests/commit_templates.md')
       - configure_the_squash_commit_message_help_link_start = '<a href="%{url}" target="_blank" rel="noopener noreferrer">'.html_safe % { url: configure_the_squash_commit_message_help_link_url }
       = s_('ProjectSettings|%{link_start}What variables can I use?%{link_end}').html_safe % { link_start: configure_the_squash_commit_message_help_link_start, link_end: '</a>'.html_safe }
diff --git a/locale/gitlab.pot b/locale/gitlab.pot
index c6c038b3b01..76ce6fc67c9 100644
--- a/locale/gitlab.pot
+++ b/locale/gitlab.pot
@@ -28455,13 +28455,16 @@ msgstr ""
 msgid "ProjectSettings|Learn about commit history."
 msgstr ""
 
+msgid "ProjectSettings|Leave empty to use default template."
+msgstr ""
+
 msgid "ProjectSettings|Manage who can see the project in the public access directory."
 msgstr ""
 
 msgid "ProjectSettings|Manages large files such as audio, video, and graphics files."
 msgstr ""
 
-msgid "ProjectSettings|Maximum 500 characters."
+msgid "ProjectSettings|Maximum %{maxLength} characters."
 msgstr ""
 
 msgid "ProjectSettings|Merge checks"
@@ -28602,6 +28605,9 @@ msgstr ""
 msgid "ProjectSettings|The default target project for merge requests created in this fork project."
 msgstr ""
 
+msgid "ProjectSettings|The default template will be applied on save."
+msgstr ""
+
 msgid "ProjectSettings|These checks must pass before merge requests can be merged."
 msgstr ""
 
diff --git a/spec/models/project_spec.rb b/spec/models/project_spec.rb
index ad63bf8b760..f24e5a42e95 100644
--- a/spec/models/project_spec.rb
+++ b/spec/models/project_spec.rb
@@ -870,6 +870,85 @@ RSpec.describe Project, factory_default: :keep do
     end
   end
 
+  describe '#merge_commit_template_or_default' do
+    let_it_be(:project) { create(:project) }
+
+    it 'returns default merge commit template' do
+      expect(project.merge_commit_template_or_default).to eq(Project::DEFAULT_MERGE_COMMIT_TEMPLATE)
+    end
+
+    context 'when merge commit template is set and not nil' do
+      before do
+        project.merge_commit_template = '%{description}'
+      end
+
+      it 'returns current value' do
+        expect(project.merge_commit_template_or_default).to eq('%{description}')
+      end
+    end
+  end
+
+  describe '#merge_commit_template_or_default=' do
+    let_it_be(:project) { create(:project) }
+
+    it 'sets template to nil when set to default value' do
+      project.merge_commit_template_or_default = Project::DEFAULT_MERGE_COMMIT_TEMPLATE
+      expect(project.merge_commit_template).to be_nil
+    end
+
+    it 'sets template to nil when set to default value but with CRLF line endings' do
+      project.merge_commit_template_or_default = "Merge branch '%{source_branch}' into '%{target_branch}'\r\n\r\n%{title}\r\n\r\n%{issues}\r\n\r\nSee merge request %{reference}"
+      expect(project.merge_commit_template).to be_nil
+    end
+
+    it 'allows changing template' do
+      project.merge_commit_template_or_default = '%{description}'
+      expect(project.merge_commit_template).to eq('%{description}')
+    end
+
+    it 'allows setting template to nil' do
+      project.merge_commit_template_or_default = nil
+      expect(project.merge_commit_template).to be_nil
+    end
+  end
+
+  describe '#squash_commit_template_or_default' do
+    let_it_be(:project) { create(:project) }
+
+    it 'returns default squash commit template' do
+      expect(project.squash_commit_template_or_default).to eq(Project::DEFAULT_SQUASH_COMMIT_TEMPLATE)
+    end
+
+    context 'when squash commit template is set and not nil' do
+      before do
+        project.squash_commit_template = '%{description}'
+      end
+
+      it 'returns current value' do
+        expect(project.squash_commit_template_or_default).to eq('%{description}')
+      end
+    end
+  end
+
+  describe '#squash_commit_template_or_default=' do
+    let_it_be(:project) { create(:project) }
+
+    it 'sets template to nil when set to default value' do
+      project.squash_commit_template_or_default = Project::DEFAULT_SQUASH_COMMIT_TEMPLATE
+      expect(project.squash_commit_template).to be_nil
+    end
+
+    it 'allows changing template' do
+      project.squash_commit_template_or_default = '%{description}'
+      expect(project.squash_commit_template).to eq('%{description}')
+    end
+
+    it 'allows setting template to nil' do
+      project.squash_commit_template_or_default = nil
+      expect(project.squash_commit_template).to be_nil
+    end
+  end
+
   describe 'reference methods' do
     # TODO update when we have multiple owners of a project
     # https://gitlab.com/gitlab-org/gitlab/-/issues/350605
diff --git a/spec/views/projects/edit.html.haml_spec.rb b/spec/views/projects/edit.html.haml_spec.rb
index e39ea9e74c5..a85ddf7a005 100644
--- a/spec/views/projects/edit.html.haml_spec.rb
+++ b/spec/views/projects/edit.html.haml_spec.rb
@@ -45,10 +45,10 @@ RSpec.describe 'projects/edit' do
   end
 
   context 'merge commit template' do
-    it 'displays a placeholder if none is set' do
+    it 'displays default template if none is set' do
       render
 
-      expect(rendered).to have_field('project[merge_commit_template]', placeholder: <<~MSG.rstrip)
+      expect(rendered).to have_field('project[merge_commit_template_or_default]', with: <<~MSG.rstrip)
         Merge branch '%{source_branch}' into '%{target_branch}'
 
         %{title}
@@ -64,15 +64,15 @@ RSpec.describe 'projects/edit' do
 
       render
 
-      expect(rendered).to have_field('project[merge_commit_template]', with: '%{title}')
+      expect(rendered).to have_field('project[merge_commit_template_or_default]', with: '%{title}')
     end
   end
 
   context 'squash template' do
-    it 'displays a placeholder if none is set' do
+    it 'displays default template if none is set' do
       render
 
-      expect(rendered).to have_field('project[squash_commit_template]', placeholder: '%{title}')
+      expect(rendered).to have_field('project[squash_commit_template_or_default]', with: '%{title}')
     end
 
     it 'displays the user entered value' do
@@ -80,7 +80,7 @@ RSpec.describe 'projects/edit' do
 
       render
 
-      expect(rendered).to have_field('project[squash_commit_template]', with: '%{first_multiline_commit}')
+      expect(rendered).to have_field('project[squash_commit_template_or_default]', with: '%{first_multiline_commit}')
     end
   end