diff --git a/jps/jps-common/src/org/jetbrains/kotlin/config/KotlinFacetSettings.kt b/jps/jps-common/src/org/jetbrains/kotlin/config/KotlinFacetSettings.kt
index 7883fb746d5..7c71a715654 100644
--- a/jps/jps-common/src/org/jetbrains/kotlin/config/KotlinFacetSettings.kt
+++ b/jps/jps-common/src/org/jetbrains/kotlin/config/KotlinFacetSettings.kt
@@ -70,6 +70,48 @@ object CoroutineSupport {
     }
 }
 
+sealed class VersionView : DescriptionAware {
+    abstract val version: LanguageVersion
+
+    object LatestStable : VersionView() {
+        override val version: LanguageVersion = LanguageVersion.LATEST_STABLE
+
+        override val description: String
+            get() = "Latest stable (${version.versionString})"
+    }
+
+    class Specific(override val version: LanguageVersion) : VersionView() {
+        override val description: String
+            get() = version.description
+
+        override fun equals(other: Any?) = other is Specific && version == other.version
+
+        override fun hashCode() = version.hashCode()
+    }
+
+    companion object {
+        fun deserialize(value: String?, isAutoAdvance: Boolean): VersionView {
+            if (isAutoAdvance) return VersionView.LatestStable
+            val languageVersion = LanguageVersion.fromVersionString(value)
+            return if (languageVersion != null) VersionView.Specific(languageVersion) else VersionView.LatestStable
+        }
+    }
+}
+
+var CommonCompilerArguments.languageVersionView: VersionView
+    get() = VersionView.deserialize(languageVersion, autoAdvanceLanguageVersion)
+    set(value) {
+        languageVersion = value.version.versionString
+        autoAdvanceLanguageVersion = value == VersionView.LatestStable
+    }
+
+var CommonCompilerArguments.apiVersionView: VersionView
+    get() = VersionView.deserialize(apiVersion, autoAdvanceApiVersion)
+    set(value) {
+        apiVersion = value.version.versionString
+        autoAdvanceApiVersion = value == VersionView.LatestStable
+    }
+
 class KotlinFacetSettings {
     companion object {
         // Increment this when making serialization-incompatible changes to configuration data
diff --git a/jps/jps-common/src/org/jetbrains/kotlin/config/facetSerialization.kt b/jps/jps-common/src/org/jetbrains/kotlin/config/facetSerialization.kt
index 61636b121d1..fbb209aedd3 100644
--- a/jps/jps-common/src/org/jetbrains/kotlin/config/facetSerialization.kt
+++ b/jps/jps-common/src/org/jetbrains/kotlin/config/facetSerialization.kt
@@ -74,6 +74,8 @@ private fun readV1Config(element: Element): KotlinFacetSettings {
             compilerArguments.apiVersion = apiLevel
         }
 
+        compilerArguments.detectVersionAutoAdvance()
+
         if (useProjectSettings != null) {
             this.useProjectSettings = useProjectSettings
         }
@@ -106,6 +108,7 @@ private fun readV2AndLaterConfig(element: Element): KotlinFacetSettings {
         element.getChild("compilerArguments")?.let {
             compilerArguments = platformKind.createCompilerArguments { freeArgs = ArrayList() }
             XmlSerializer.deserializeInto(compilerArguments!!, it)
+            compilerArguments!!.detectVersionAutoAdvance()
         }
         testOutputPath = element.getChild("testOutputPath")?.let {
             PathUtil.toSystemDependentName((it.content.firstOrNull() as? Text)?.textTrim)
@@ -214,8 +217,8 @@ private fun Element.restoreNormalOrdering(bean: Any) {
             .forEachIndexed { index, element -> elementsToReorder[index] = element.clone() }
 }
 
-private fun buildChildElement(element: Element, tag: String, bean: Any, filter: SerializationFilter) {
-    Element(tag).apply {
+private fun buildChildElement(element: Element, tag: String, bean: Any, filter: SerializationFilter): Element {
+    return Element(tag).apply {
         XmlSerializer.serializeInto(bean, this, filter)
         restoreNormalOrdering(bean)
         element.addContent(this)
@@ -245,7 +248,24 @@ private fun KotlinFacetSettings.writeLatestConfig(element: Element) {
     }
     compilerArguments?.let { copyBean(it) }?.let {
         it.convertPathsToSystemIndependent()
-        buildChildElement(element, "compilerArguments", it, filter)
+        val compilerArgumentsXml = buildChildElement(element, "compilerArguments", it, filter)
+        compilerArgumentsXml.dropVersionsIfNecessary(it)
+    }
+}
+
+fun CommonCompilerArguments.detectVersionAutoAdvance() {
+    autoAdvanceLanguageVersion = languageVersion == null
+    autoAdvanceApiVersion = apiVersion == null
+}
+
+fun Element.dropVersionsIfNecessary(settings: CommonCompilerArguments) {
+    // Do not serialize language/api version if they correspond to the default language version
+    if (settings.autoAdvanceLanguageVersion) {
+        getOption("languageVersion")?.detach()
+    }
+
+    if (settings.autoAdvanceApiVersion) {
+        getOption("apiVersion")?.detach()
     }
 }