diff --git a/docs/decisions/0004-managing-django-settings.rst b/docs/decisions/0004-managing-django-settings.rst
new file mode 100644
index 0000000000..b29882d18b
--- /dev/null
+++ b/docs/decisions/0004-managing-django-settings.rst
@@ -0,0 +1,37 @@
+Status
+======
+
+Accepted
+
+
+Context
+=======
+
+Settings are confusing right now and there are way too many layers. We have
+multiple python settings file that "inherit" from each other. In some cases some
+layers of the inheritance tree also pull settings from config files leading to
+more confusion.
+
+
+Decision
+========
+Rather than having multiple python settings files that override things
+differently we will move to just a few python files with most of the settings
+variance living in YAML config files that are managed by environment operators.
+
+common.py - This file will house the defaults for all settings that are
+referenced in the default installation of the edx-platform.
+
+production.py - This settings file will pull the defaults from common.py and
+then override them with settings pulled from a single YAML config file. For the
+most part this will be a wholesale replacement for any complex values(dicts,
+lists, etc) but for some specific settings they will be additive for now.
+
+eg. ADDITIONAL_INSTALLED_APPS, or ADDITIONAL_MIDDLEWARE
+
+Consequences
+============
+
+Rather than having both python and yaml override files for our dev and test
+environments, we will move towards having all settings defined in a yaml file
+and for all environments to use production.py to load their settings.