diff --git a/.gitignore b/.gitignore
index f29dd026c6..3f25a701e5 100644
--- a/.gitignore
+++ b/.gitignore
@@ -23,3 +23,4 @@ innosetup/config.ini
 
 .coverage
 
+dvc/version.py
diff --git a/dvc/__init__.py b/dvc/__init__.py
index 8f959501b0..1a2185000b 100644
--- a/dvc/__init__.py
+++ b/dvc/__init__.py
@@ -5,18 +5,43 @@
 """
 import os
 
-VERSION = '0.9.5'
+__version__ = '0.9.5'
 
-if os.getenv('APPVEYOR_REPO_TAG', '').lower() != 'true' and os.getenv('TRAVIS_TAG', '') == '':
-    # Dynamically update version
+PACKAGEPATH = os.path.abspath(os.path.dirname(__file__))
+HOMEPATH = os.path.dirname(PACKAGEPATH)
+VERSIONPATH = os.path.join(PACKAGEPATH, 'version.py')
+
+if os.path.exists(os.path.join(HOMEPATH, 'setup.py')):
+    # dvc is run directly from source without installation or
+    # __version__ is called from setup.py
+    if os.getenv('APPVEYOR_REPO_TAG', '').lower() != 'true' and os.getenv('TRAVIS_TAG', '') == '':
+        # Dynamically update version
+        try:
+            import git
+            repo = git.Repo(HOMEPATH)
+            sha = repo.head.object.hexsha
+            short_sha = repo.git.rev_parse(sha, short=6)
+            dirty = '.mod' if repo.is_dirty() else ''
+            __version__ = '{}+{}{}'.format(__version__, short_sha, dirty)
+
+            # Write a helper file, that will be installed with the package
+            # and will provide a true version of the installed dvc
+            with open(VERSIONPATH, 'w+') as fd:
+                fd.write('# AUTOGENERATED by dvc/__init__.py')
+                fd.write('version = "{}"'.format(__version__))
+        except:
+            pass
+    else:
+        # Remove version.py so that it doesn't get into the release
+        if os.path.exists(VERSIONPATH):
+            os.unlink(VERSIONPATH)
+else:
+    # dvc was installed with pip or something. Hopefully we have our
+    # auto-generated version.py to help us provide a true version
     try:
-        import git
-        repo = git.Repo(os.curdir, search_parent_directories=True)
-        sha = repo.head.object.hexsha
-        short_sha = repo.git.rev_parse(sha, short=6)
-        dirty = '.mod' if repo.is_dirty() else ''
-        VERSION = '{}+{}{}'.format(VERSION, short_sha, dirty)
+        from dvc.version import version
+        __version__ = version
     except:
         pass
 
-__version__ = VERSION
+VERSION = __version__