diff --git a/config/audit_events/types/model_selection_feature_changed.yml b/config/audit_events/types/model_selection_feature_changed.yml
new file mode 100644
index 0000000000000000000000000000000000000000..7860318e388c116b1d94a865907c8252804efb58
--- /dev/null
+++ b/config/audit_events/types/model_selection_feature_changed.yml
@@ -0,0 +1,10 @@
+---
+name: model_selection_feature_changed
+description: A model selection feature had its configuration changed
+introduced_by_issue: https://gitlab.com/gitlab-org/gitlab/-/issues/547982
+introduced_by_mr: https://gitlab.com/gitlab-org/gitlab/-/merge_requests/194862
+feature_category: self-hosted_models
+milestone: '18.2'
+saved_to_database: true
+streamed: true
+scope: [Instance, Group, Project, User]
diff --git a/doc/user/compliance/audit_event_types.md b/doc/user/compliance/audit_event_types.md
index 90ecb8469049b5989609aa38418b8d417d68b1c8..56f60c4bee91f6e11ab28cfcf76679997606ed40 100644
--- a/doc/user/compliance/audit_event_types.md
+++ b/doc/user/compliance/audit_event_types.md
@@ -544,6 +544,7 @@ Audit event types belong to the following product categories.
 
 | Type name | Event triggered when | Saved to database | Introduced in | Scope |
 |:----------|:---------------------|:------------------|:--------------|:------|
+| [`model_selection_feature_changed`](https://gitlab.com/gitlab-org/gitlab/-/merge_requests/194862) | A model selection feature had its configuration changed | {{< icon name="check-circle" >}} Yes | GitLab [18.2](https://gitlab.com/gitlab-org/gitlab/-/issues/547982) | Instance, Group, Project, User |
 | [`self_hosted_model_created`](https://gitlab.com/gitlab-org/gitlab/-/merge_requests/165303) | A new self-hosted model configuration was added | {{< icon name="check-circle" >}} Yes | GitLab [17.4](https://gitlab.com/gitlab-org/gitlab/-/issues/477999) | Instance |
 | [`self_hosted_model_destroyed`](https://gitlab.com/gitlab-org/gitlab/-/merge_requests/165321) | A new self-hosted model configuration was destroyed | {{< icon name="check-circle" >}} Yes | GitLab [17.4](https://gitlab.com/gitlab-org/gitlab/-/issues/477999) | Instance |
 | [`self_hosted_model_feature_changed`](https://gitlab.com/gitlab-org/gitlab/-/merge_requests/165489) | A self-hosted model feature had its configuration changed | {{< icon name="check-circle" >}} Yes | GitLab [17.4](https://gitlab.com/gitlab-org/gitlab/-/issues/463215) | Instance |
diff --git a/ee/app/services/ai/model_selection/update_service.rb b/ee/app/services/ai/model_selection/update_service.rb
index a6fd96261b74996ce8f5accae4a34004e7fdd5a4..03fdbfdbf05cc859a20c06f50054efcbdda13942 100644
--- a/ee/app/services/ai/model_selection/update_service.rb
+++ b/ee/app/services/ai/model_selection/update_service.rb
@@ -27,6 +27,8 @@ def execute
         update_params[:model_definitions] = fetch_model_definition.payload
 
         if feature_setting.update(update_params)
+          record_audit_event
+
           ServiceResponse.success(payload: feature_setting)
         else
           ServiceResponse.error(payload: feature_setting,
@@ -37,6 +39,27 @@ def execute
       private
 
       attr_accessor :feature_setting, :user, :selection_scope, :params
+
+      def record_audit_event
+        model = params[:offered_model_ref]
+        feature = feature_setting.feature
+        scope_type = selection_scope.class.name
+        scope_id = selection_scope.id
+
+        audit_context = {
+          name: 'model_selection_feature_changed',
+          author: user,
+          scope: selection_scope,
+          target: selection_scope,
+          message: "The LLM #{model} has been selected for the feature #{feature} of #{scope_type} with ID #{scope_id}",
+          additional_details: {
+            model_ref: model,
+            feature: feature
+          }
+        }
+
+        ::Gitlab::Audit::Auditor.audit(audit_context)
+      end
     end
   end
 end
diff --git a/ee/spec/services/ai/model_selection/update_service_spec.rb b/ee/spec/services/ai/model_selection/update_service_spec.rb
index 2d4ebbd42dff2b0bc8eac336f2d9b0ea3037bc03..705829db20e122f7f7075fdc436ee91efd87a995 100644
--- a/ee/spec/services/ai/model_selection/update_service_spec.rb
+++ b/ee/spec/services/ai/model_selection/update_service_spec.rb
@@ -4,7 +4,7 @@
 
 RSpec.describe ::Ai::ModelSelection::UpdateService, feature_category: :"self-hosted_models" do
   let_it_be(:user) { create(:user) }
-  let(:feature_setting) { build(:ai_namespace_feature_setting, feature: :code_generations) }
+  let_it_be(:group) { create(:group) }
   let(:offered_model_ref) { 'openai_chatgpt_4o' }
   let(:params) { { offered_model_ref: offered_model_ref } }
   let(:model_definitions) do
@@ -25,8 +25,32 @@
     }
   end
 
+  let(:feature_setting) do
+    build(:ai_namespace_feature_setting, feature: :code_generations, namespace: group)
+  end
+
   let(:model_definitions_response) { model_definitions.to_json }
 
+  let(:audit_event) do
+    feature = feature_setting.feature
+    selection_scope = feature_setting.model_selection_scope
+    scope_type = 'Group'
+    scope_id = selection_scope.id
+
+    {
+      name: 'model_selection_feature_changed',
+      author: user,
+      scope: selection_scope,
+      target: selection_scope,
+      message:
+      "The LLM #{offered_model_ref} has been selected for the feature #{feature} of #{scope_type} with ID #{scope_id}",
+      additional_details: {
+        model_ref: offered_model_ref,
+        feature: feature
+      }
+    }
+  end
+
   include_context 'with the model selections fetch definition service as side-effect'
 
   subject(:service) { described_class.new(feature_setting, user, params) }
@@ -58,6 +82,8 @@
       context 'when feature setting update is successful' do
         context 'when feature setting is new' do
           it 'returns a success response with the feature setting' do
+            expect(Gitlab::Audit::Auditor).to receive(:audit).with(audit_event).and_call_original
+
             expect(feature_setting.persisted?).to be(false)
 
             response = service.execute
@@ -77,6 +103,8 @@
           end
 
           it 'returns a success response with the feature setting' do
+            expect(Gitlab::Audit::Auditor).to receive(:audit).with(audit_event).and_call_original
+
             expect(feature_setting.offered_model_ref).not_to eq(offered_model_ref)
             expect(feature_setting.offered_model_name).not_to eq('OpenAI Chat GPT 4o')
 
@@ -94,6 +122,8 @@
           let(:offered_model_ref) { '' }
 
           it 'returns a success response with the feature setting' do
+            expect(Gitlab::Audit::Auditor).to receive(:audit).with(audit_event).and_call_original
+
             expect(feature_setting.offered_model_ref).not_to eq(offered_model_ref)
             expect(feature_setting.offered_model_name).not_to eq('OpenAI Chat GPT 4o')