diff --git a/packages/core/CHANGELOG.md b/packages/core/CHANGELOG.md
index 6b1886995..e69df217c 100644
--- a/packages/core/CHANGELOG.md
+++ b/packages/core/CHANGELOG.md
@@ -1,8 +1,9 @@
 # Changelog
 
-## Unreleased
+## 1.40.0 (2024-10-10)
 
 - Fix Hardhat compile error when overriding interface functions with public constant variables. ([#1091](https://github.com/OpenZeppelin/openzeppelin-upgrades/pull/1091))
+- Support ignoring Hardhat compile errors when extracting detailed namespaced storage layouts for validations. ([#1090](https://github.com/OpenZeppelin/openzeppelin-upgrades/pull/1090))
 
 ## 1.39.0 (2024-10-02)
 
diff --git a/packages/core/package.json b/packages/core/package.json
index 4fc426472..31d27cb30 100644
--- a/packages/core/package.json
+++ b/packages/core/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@openzeppelin/upgrades-core",
-  "version": "1.39.0",
+  "version": "1.40.0",
   "description": "",
   "repository": "https://github.com/OpenZeppelin/openzeppelin-upgrades/tree/master/packages/core",
   "license": "MIT",
diff --git a/packages/core/src/index.ts b/packages/core/src/index.ts
index 6a4d640c5..d173104d6 100644
--- a/packages/core/src/index.ts
+++ b/packages/core/src/index.ts
@@ -63,3 +63,4 @@ export { getUpgradeInterfaceVersion } from './upgrade-interface-version';
 export { makeNamespacedInput } from './utils/make-namespaced';
 export { isNamespaceSupported } from './storage/namespace';
 export { inferProxyAdmin } from './infer-proxy-admin';
+export { assertUnreachable } from './utils/assert';
diff --git a/packages/plugin-hardhat/CHANGELOG.md b/packages/plugin-hardhat/CHANGELOG.md
index 6ed398b6e..02f25b39b 100644
--- a/packages/plugin-hardhat/CHANGELOG.md
+++ b/packages/plugin-hardhat/CHANGELOG.md
@@ -1,5 +1,9 @@
 # Changelog
 
+## 3.5.0 (2024-10-10)
+
+- Support ignoring Hardhat compile errors when extracting detailed namespaced storage layouts for validations. ([#1090](https://github.com/OpenZeppelin/openzeppelin-upgrades/pull/1090))
+
 ## 3.4.0 (2024-09-23)
 
 ### Potentially breaking changes
diff --git a/packages/plugin-hardhat/package.json b/packages/plugin-hardhat/package.json
index b170f8f0b..12223d56a 100644
--- a/packages/plugin-hardhat/package.json
+++ b/packages/plugin-hardhat/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@openzeppelin/hardhat-upgrades",
-  "version": "3.4.0",
+  "version": "3.5.0",
   "description": "",
   "repository": "https://github.com/OpenZeppelin/openzeppelin-upgrades/tree/master/packages/plugin-hardhat",
   "license": "MIT",
@@ -38,7 +38,7 @@
     "@openzeppelin/defender-sdk-base-client": "^1.14.4",
     "@openzeppelin/defender-sdk-deploy-client": "^1.14.4",
     "@openzeppelin/defender-sdk-network-client": "^1.14.4",
-    "@openzeppelin/upgrades-core": "^1.38.0",
+    "@openzeppelin/upgrades-core": "^1.40.0",
     "chalk": "^4.1.0",
     "debug": "^4.1.1",
     "ethereumjs-util": "^7.1.5",
diff --git a/packages/plugin-hardhat/src/index.ts b/packages/plugin-hardhat/src/index.ts
index 1a07cf7b0..f7458a300 100644
--- a/packages/plugin-hardhat/src/index.ts
+++ b/packages/plugin-hardhat/src/index.ts
@@ -6,7 +6,7 @@ import { subtask, extendEnvironment, extendConfig } from 'hardhat/config';
 import { TASK_COMPILE_SOLIDITY, TASK_COMPILE_SOLIDITY_COMPILE } from 'hardhat/builtin-tasks/task-names';
 import { lazyObject } from 'hardhat/plugins';
 import { HardhatConfig, HardhatRuntimeEnvironment } from 'hardhat/types';
-import type { silenceWarnings, SolcInput, SolcOutput } from '@openzeppelin/upgrades-core';
+import { assertUnreachable, type silenceWarnings, type SolcInput, type SolcOutput } from '@openzeppelin/upgrades-core';
 import type { DeployFunction } from './deploy-proxy';
 import type { PrepareUpgradeFunction } from './prepare-upgrade';
 import type { UpgradeFunction } from './upgrade-proxy';
@@ -101,7 +101,46 @@ subtask(TASK_COMPILE_SOLIDITY_COMPILE, async (args: RunCompilerArgs, hre, runSup
     if (isNamespaceSupported(args.solcVersion)) {
       const namespacedInput = makeNamespacedInput(args.input, output, args.solcVersion);
       namespacedOutput = (await runSuper({ ...args, quiet: true, input: namespacedInput })).output;
-      await checkNamespacedCompileErrors(namespacedOutput);
+
+      const namespacedCompileErrors = getNamespacedCompileErrors(namespacedOutput);
+      if (namespacedCompileErrors.length > 0) {
+        // If there are compile errors in the namespaced output, show error or warning if needed, then only use the original output
+
+        const msg = `Failed to compile modified contracts for namespaced storage layout validations:\n\n${namespacedCompileErrors.join('\n')}`;
+        const preamble = [
+          'Please report this at https://zpl.in/upgrades/report. If possible, include the source code for the contracts mentioned in the errors above.',
+          'This step allows for advanced storage modifications such as tight varible packing when performing upgrades with namespaced storage layouts.',
+        ];
+
+        switch (hre.config.namespacedCompileErrors) {
+          case undefined:
+          case 'error': {
+            const { UpgradesError } = await import('@openzeppelin/upgrades-core');
+            const details = [
+              ...preamble,
+              'If you are not using namespaced storage, or if you do not anticipate making advanced modifications to namespaces during upgrades,',
+              "you can set namespacedCompileErrors: 'warn' or namespacedCompileErrors: 'ignore' in your hardhat config to convert this to a warning or to ignore this.",
+            ];
+            throw new UpgradesError(msg, () => details.join('\n'));
+          }
+          case 'warn': {
+            const { logWarning } = await import('@openzeppelin/upgrades-core');
+            const details = [
+              ...preamble,
+              'If you are not using namespaced storage, or if you do not anticipate making advanced modifications to namespaces during upgrades,',
+              "you can set namespacedCompileErrors: 'ignore' in your hardhat config to ignore this.",
+            ];
+            logWarning(msg, details);
+            break;
+          }
+          case 'ignore':
+            break;
+          default:
+            assertUnreachable(hre.config.namespacedCompileErrors);
+        }
+
+        namespacedOutput = undefined;
+      }
     }
 
     const validations = validate(output, decodeSrc, args.solcVersion, args.input, namespacedOutput);
@@ -111,11 +150,7 @@ subtask(TASK_COMPILE_SOLIDITY_COMPILE, async (args: RunCompilerArgs, hre, runSup
   return { output, solcBuild };
 });
 
-/**
- * Checks for compile errors in the modified contracts for namespaced storage.
- * If errors are found, throws an error with the compile error messages.
- */
-async function checkNamespacedCompileErrors(namespacedOutput: SolcOutput) {
+function getNamespacedCompileErrors(namespacedOutput: SolcOutput) {
   const errors = [];
   if (namespacedOutput.errors !== undefined) {
     for (const error of namespacedOutput.errors) {
@@ -124,14 +159,7 @@ async function checkNamespacedCompileErrors(namespacedOutput: SolcOutput) {
       }
     }
   }
-  if (errors.length > 0) {
-    const { UpgradesError } = await import('@openzeppelin/upgrades-core');
-    throw new UpgradesError(
-      `Failed to compile modified contracts for namespaced storage:\n\n${errors.join('\n')}`,
-      () =>
-        'Please report this at https://zpl.in/upgrades/report. If possible, include the source code for the contracts mentioned in the errors above.',
-    );
-  }
+  return errors;
 }
 
 extendEnvironment(hre => {
diff --git a/packages/plugin-hardhat/src/type-extensions.ts b/packages/plugin-hardhat/src/type-extensions.ts
index 67f7c899e..18808b499 100644
--- a/packages/plugin-hardhat/src/type-extensions.ts
+++ b/packages/plugin-hardhat/src/type-extensions.ts
@@ -17,12 +17,16 @@ export interface HardhatDefenderConfig {
   network?: string;
 }
 
+export type NamespacedCompileErrorsRule = 'error' | 'warn' | 'ignore';
+
 declare module 'hardhat/types/config' {
   export interface HardhatUserConfig {
     defender?: HardhatDefenderConfig;
+    namespacedCompileErrors?: NamespacedCompileErrorsRule;
   }
 
   export interface HardhatConfig {
     defender?: HardhatDefenderConfig;
+    namespacedCompileErrors?: NamespacedCompileErrorsRule;
   }
 }