diff --git a/pio-scripts/set_nightly_version.py b/pio-scripts/set_nightly_version.py
deleted file mode 100644
index 176cd98848..0000000000
--- a/pio-scripts/set_nightly_version.py
+++ /dev/null
@@ -1,11 +0,0 @@
-Import('env')
-import os
-from datetime import datetime, timezone
-
-# Only set VERSION if this is a nightly build (indicated by environment variable)
-if os.environ.get('WLED_NIGHTLY_BUILD') == 'true':
-    # VERSION format: yymmddb (b = build number, 0 for nightly)
-    version_code = datetime.now(timezone.utc).strftime("%y%m%d") + "0"
-    env.Append(BUILD_FLAGS=[f"-DWLED_BUILD_VERSION={version_code}"])
-    print(f"Nightly build: Setting VERSION to {version_code}")
-
diff --git a/pio-scripts/set_version.py b/pio-scripts/set_version.py
index 1d8e076ea8..4f9dc0ce64 100644
--- a/pio-scripts/set_version.py
+++ b/pio-scripts/set_version.py
@@ -1,8 +1,27 @@
-Import('env')
+Import('env')  # PlatformIO-specific import
 import json
+import os
+from datetime import datetime, timezone
 
 PACKAGE_FILE = "package.json"
 
 with open(PACKAGE_FILE, "r") as package:
     version = json.load(package)["version"]
-    env.Append(BUILD_FLAGS=[f"-DWLED_VERSION={version}"])
+
+# Handle nightly build
+if os.environ.get('WLED_NIGHTLY_BUILD', '').lower() in ('true', '1', 'yes'):
+    # VERSION format: yymmddb (b = build number, 0 for nightly)
+    version_code = datetime.now(timezone.utc).strftime("%y%m%d") + "0"
+    env.Append(BUILD_FLAGS=[f"-DWLED_BUILD_VERSION={version_code}"])
+    print(f"Nightly build: Setting VERSION to {version_code}")
+    
+    # Update version tag: replace existing tag with "-nightly" or append "-nightly" if no tag
+    if "-" in version:
+        # Replace any existing tag with -nightly (handles multiple hyphens correctly)
+        version = version.rsplit("-", 1)[0] + "-nightly"
+    else:
+        # No tag present, append -nightly
+        version = version + "-nightly"
+    print(f"Nightly build: Using version string {version}")
+
+env.Append(BUILD_FLAGS=[f"-DWLED_VERSION={version}"])
diff --git a/platformio.ini b/platformio.ini
index d32b791708..674049a572 100644
--- a/platformio.ini
+++ b/platformio.ini
@@ -224,7 +224,6 @@ ldscript_16m14m = eagle.flash.16m14m.ld
 [scripts_defaults]
 extra_scripts =
   pre:pio-scripts/set_version.py
-  pre:pio-scripts/set_nightly_version.py
   pre:pio-scripts/build_ui.py
   pre:pio-scripts/conditional_usb_mode.py
   pre:pio-scripts/set_repo.py