diff --git a/libs/localenv/target.go b/libs/localenv/target.go
new file mode 100644
index 0000000000..b3ccb3171e
--- /dev/null
+++ b/libs/localenv/target.go
@@ -0,0 +1,149 @@
+package localenv
+
+import (
+	"context"
+	"fmt"
+	"strings"
+)
+
+// ComputeClient is a narrow seam over the SDK so tests can stub it.
+type ComputeClient interface {
+	// GetClusterSparkVersion returns the Spark version string for a cluster.
+	GetClusterSparkVersion(ctx context.Context, clusterID string) (string, error)
+	// GetJobSparkVersion returns either a Spark version (isServerless=false) or a
+	// serverless marker (isServerless=true) for a job, plus a recorded version string.
+	GetJobSparkVersion(ctx context.Context, jobID string) (sparkVersion string, isServerless bool, version string, err error)
+}
+
+// TargetFlags holds the mutually-exclusive compute target flags from the CLI.
+type TargetFlags struct {
+	Cluster    string
+	Serverless string
+	Job        string
+}
+
+// BundleTarget is the three-state result of reading the bundle's configured
+// target. Selected=false means nothing was configured.
+type BundleTarget struct {
+	ClusterID  string
+	Serverless bool
+	Selected   bool
+}
+
+// noTargetMessage is the actionable message shown when no target is selected,
+// matching spec §2.3.
+const noTargetMessage = "No compute target is selected. Select a cluster or serverless target, or pass --cluster / --serverless / --job"
+
+// ValidateTargetFlags returns an error if more than one of the three flags is set.
+// Cobra marks them mutually exclusive too; this guards the library path.
+func ValidateTargetFlags(f TargetFlags) error {
+	var set []string
+	if f.Cluster != "" {
+		set = append(set, "--cluster")
+	}
+	if f.Serverless != "" {
+		set = append(set, "--serverless")
+	}
+	if f.Job != "" {
+		set = append(set, "--job")
+	}
+	if len(set) > 1 {
+		return fmt.Errorf("flags %s are mutually exclusive; specify at most one", strings.Join(set, " and "))
+	}
+	return nil
+}
+
+// ResolveTarget resolves the compute target using ordered precedence:
+// --cluster flag → --serverless flag → --job flag → bundle target.
+// PythonVersion is left empty; it is filled later from constraint data.
+//
+// Incompatible flags are rejected up front: without this a library caller that
+// bypasses Cobra (which also marks the flags mutually exclusive) and passes more
+// than one target flag would have all but the first precedence branch silently
+// ignored, resolving a different target than requested.
+func ResolveTarget(ctx context.Context, f TargetFlags, c ComputeClient, bt BundleTarget) (*TargetInfo, error) {
+	if err := ValidateTargetFlags(f); err != nil {
+		return nil, NewError(ErrResolve, err, "invalid compute target flags")
+	}
+
+	if f.Cluster != "" {
+		v, err := c.GetClusterSparkVersion(ctx, f.Cluster)
+		if err != nil {
+			return nil, NewError(ErrResolve, err, "resolving cluster %s", f.Cluster)
+		}
+		return &TargetInfo{
+			Source:       "cluster",
+			ClusterID:    f.Cluster,
+			SparkVersion: v,
+			EnvKey:       EnvKeyForSparkVersion(v),
+		}, nil
+	}
+
+	if f.Serverless != "" {
+		return &TargetInfo{
+			Source:            "serverless",
+			ServerlessVersion: NormalizeServerless(f.Serverless),
+			EnvKey:            EnvKeyForServerless(f.Serverless),
+		}, nil
+	}
+
+	if f.Job != "" {
+		sparkVersion, isServerless, version, err := c.GetJobSparkVersion(ctx, f.Job)
+		if err != nil {
+			return nil, NewError(ErrResolve, err, "resolving job %s", f.Job)
+		}
+		if isServerless {
+			// Default to v4 when the job is serverless; the serverless env version
+			// is not recorded in the bundle/project (documented stand-in from the
+			// original script, spec §4.3).
+			v := version
+			if v == "" {
+				v = "v4"
+			}
+			return &TargetInfo{
+				Source:            "job",
+				ServerlessVersion: NormalizeServerless(v),
+				EnvKey:            EnvKeyForServerless(v),
+			}, nil
+		}
+		// Classic compute: the Spark version is the first return per the
+		// GetJobSparkVersion contract, not the recorded-version third return.
+		return &TargetInfo{
+			Source:       "job",
+			SparkVersion: sparkVersion,
+			EnvKey:       EnvKeyForSparkVersion(sparkVersion),
+		}, nil
+	}
+
+	// Fall back to bundle target.
+	if !bt.Selected {
+		return nil, NewError(ErrNoTarget, nil, "%s", noTargetMessage)
+	}
+
+	if bt.Serverless {
+		// Default to serverless-v4: the serverless env version is not recorded
+		// in the bundle/project (documented stand-in from the original script).
+		return &TargetInfo{
+			Source:            "bundle",
+			ServerlessVersion: "v4",
+			EnvKey:            EnvKeyForServerless("v4"),
+		}, nil
+	}
+
+	if bt.ClusterID != "" {
+		v, err := c.GetClusterSparkVersion(ctx, bt.ClusterID)
+		if err != nil {
+			return nil, NewError(ErrResolve, err, "resolving bundle cluster %s", bt.ClusterID)
+		}
+		return &TargetInfo{
+			Source:       "bundle",
+			ClusterID:    bt.ClusterID,
+			SparkVersion: v,
+			EnvKey:       EnvKeyForSparkVersion(v),
+		}, nil
+	}
+
+	// Bundle target is selected but has neither serverless nor a cluster ID —
+	// treat this the same as nothing selected so the user gets a clear message.
+	return nil, NewError(ErrNoTarget, nil, "%s", noTargetMessage)
+}
diff --git a/libs/localenv/target_test.go b/libs/localenv/target_test.go
new file mode 100644
index 0000000000..22beaee338
--- /dev/null
+++ b/libs/localenv/target_test.go
@@ -0,0 +1,106 @@
+package localenv
+
+import (
+	"context"
+	"errors"
+	"testing"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+type stubCompute struct {
+	clusterVersion string
+	clusterErr     error
+}
+
+func (s stubCompute) GetClusterSparkVersion(_ context.Context, _ string) (string, error) {
+	return s.clusterVersion, s.clusterErr
+}
+
+func (s stubCompute) GetJobSparkVersion(_ context.Context, _ string) (string, bool, string, error) {
+	return "", false, "", nil
+}
+
+func TestResolveServerlessFlag(t *testing.T) {
+	ti, err := ResolveTarget(t.Context(), TargetFlags{Serverless: "v4"}, stubCompute{}, BundleTarget{})
+	require.NoError(t, err)
+	assert.Equal(t, "serverless", ti.Source)
+	assert.Equal(t, "v4", ti.ServerlessVersion)
+	assert.Equal(t, "serverless/serverless-v4", ti.EnvKey)
+}
+
+func TestResolveClusterFlag(t *testing.T) {
+	c := stubCompute{clusterVersion: "15.4.x-scala2.12"}
+	ti, err := ResolveTarget(t.Context(), TargetFlags{Cluster: "abc"}, c, BundleTarget{})
+	require.NoError(t, err)
+	assert.Equal(t, "cluster", ti.Source)
+	assert.Equal(t, "15.4.x-scala2.12", ti.SparkVersion)
+	assert.Equal(t, "dbr/15.4.x-scala2.12", ti.EnvKey)
+	assert.Equal(t, "abc", ti.ClusterID)
+}
+
+func TestResolveClusterFlagError(t *testing.T) {
+	c := stubCompute{clusterErr: errors.New("cluster not found")}
+	_, err := ResolveTarget(t.Context(), TargetFlags{Cluster: "abc"}, c, BundleTarget{})
+	var pe *PipelineError
+	require.ErrorAs(t, err, &pe)
+	assert.Equal(t, ErrResolve, pe.Code)
+}
+
+func TestResolveBundleNothingSelected(t *testing.T) {
+	_, err := ResolveTarget(t.Context(), TargetFlags{}, stubCompute{}, BundleTarget{Selected: false})
+	var pe *PipelineError
+	require.ErrorAs(t, err, &pe)
+	assert.Equal(t, ErrNoTarget, pe.Code)
+}
+
+func TestResolveBundleServerless(t *testing.T) {
+	ti, err := ResolveTarget(t.Context(), TargetFlags{}, stubCompute{}, BundleTarget{Selected: true, Serverless: true})
+	require.NoError(t, err)
+	assert.Equal(t, "bundle", ti.Source)
+	assert.Equal(t, "serverless/serverless-v4", ti.EnvKey)
+}
+
+// jobStubCompute returns distinct values for the first (sparkVersion) and third
+// (recorded version) results of GetJobSparkVersion so the classic-compute branch
+// can be checked against the documented contract (it must use the first).
+type jobStubCompute struct {
+	sparkVersion string
+	isServerless bool
+	version      string
+}
+
+func (jobStubCompute) GetClusterSparkVersion(_ context.Context, _ string) (string, error) {
+	return "", nil
+}
+
+func (s jobStubCompute) GetJobSparkVersion(_ context.Context, _ string) (string, bool, string, error) {
+	return s.sparkVersion, s.isServerless, s.version, nil
+}
+
+func TestResolveJobClassicUsesSparkVersionReturn(t *testing.T) {
+	// Contract: for a classic-compute job the Spark version is the FIRST return.
+	// The third "recorded version" return differs here to catch use of the wrong one.
+	c := jobStubCompute{sparkVersion: "15.4.x-scala2.12", isServerless: false, version: "wrong-recorded"}
+	ti, err := ResolveTarget(t.Context(), TargetFlags{Job: "42"}, c, BundleTarget{})
+	require.NoError(t, err)
+	assert.Equal(t, "job", ti.Source)
+	assert.Equal(t, "15.4.x-scala2.12", ti.SparkVersion)
+	assert.Equal(t, "dbr/15.4.x-scala2.12", ti.EnvKey)
+}
+
+func TestValidateTargetFlagsMutuallyExclusive(t *testing.T) {
+	assert.Error(t, ValidateTargetFlags(TargetFlags{Cluster: "a", Serverless: "v4"}))
+	assert.NoError(t, ValidateTargetFlags(TargetFlags{Cluster: "a"}))
+}
+
+func TestResolveTargetRejectsConflictingFlags(t *testing.T) {
+	// ResolveTarget must reject incompatible flags rather than silently taking
+	// the first precedence branch, so a library caller bypassing Cobra can't
+	// resolve a different target than it asked for.
+	_, err := ResolveTarget(t.Context(), TargetFlags{Cluster: "c", Serverless: "v4"}, stubCompute{}, BundleTarget{})
+	var pe *PipelineError
+	require.ErrorAs(t, err, &pe)
+	assert.Equal(t, ErrResolve, pe.Code)
+}