diff --git a/.azure/gpu-tests-lite.yml b/.azure/gpu-tests-lite.yml
new file mode 100644
index 0000000000..3260fdd702
--- /dev/null
+++ b/.azure/gpu-tests-lite.yml
@@ -0,0 +1,101 @@
+# Python package
+# Create and test a Python package on multiple Python versions.
+# Add steps that analyze code, save the dist with the build record, publish to a PyPI-compatible index, and more:
+# https://docs.microsoft.com/azure/devops/pipelines/languages/python
+
+trigger:
+  tags:
+    include:
+      - '*'
+  branches:
+    include:
+      - "master"
+      - "release/*"
+      - "refs/tags/*"
+  paths:
+    include:
+      - ".azure/gpu-tests-lite.yml"
+      - "requirements/lite/**"
+      - "src/lightning_lite/**"
+      - "tests/tests_lite/**"
+
+pr:
+  - "master"
+  - "release/*"
+
+jobs:
+  - job: testing
+    # how long to run the job before automatically cancelling
+    timeoutInMinutes: "20"
+    # how much time to give 'run always even if cancelled tasks' before stopping them
+    cancelTimeoutInMinutes: "2"
+    pool: azure-jirka-spot
+    container:
+      image: "pytorchlightning/pytorch_lightning:base-cuda-py3.9-torch1.12-cuda11.6.1"
+      # default shm size is 64m. Increase it to avoid:
+      # 'Error while creating shared memory: unhandled system error, NCCL version 2.7.8'
+      options: "--runtime=nvidia -e NVIDIA_VISIBLE_DEVICES=all --shm-size=512m"
+    workspace:
+      clean: all
+
+    steps:
+    - bash: |
+        lspci | egrep 'VGA|3D'
+        whereis nvidia
+        nvidia-smi
+        which python && which pip
+        python --version
+        pip --version
+        pip list
+      displayName: 'Image info & NVIDIA'
+
+    - bash: |
+        set -e
+        TORCH_VERSION=$(python -c "import torch; print(torch.__version__.split('+')[0])")
+        CUDA_VERSION_MM=$(python -c "import torch ; print(''.join(map(str, torch.version.cuda.split('.')[:2])))")
+        python ./requirements/pytorch/adjust-versions.py requirements/lite/base.txt ${PYTORCH_VERSION}
+        pip install -e .[strategies] --find-links https://download.pytorch.org/whl/cu${CUDA_VERSION_MM}/torch_stable.html
+        pip install --requirement requirements/pytorch/devel.txt --find-links https://download.pytorch.org/whl/cu${CUDA_VERSION_MM}/torch_stable.html
+        pip list
+      env:
+        PACKAGE_NAME: pytorch
+        FREEZE_REQUIREMENTS: 1
+      displayName: 'Install dependencies'
+
+    - bash: |
+        set -e
+        python requirements/collect_env_details.py
+        python -c "import torch ; mgpu = torch.cuda.device_count() ; assert mgpu >= 2, f'GPU: {mgpu}'"
+      displayName: 'Env details'
+
+    - bash: python -m coverage run --source lightning_lite -m pytest --ignore benchmarks -v --junitxml=$(Build.StagingDirectory)/test-results.xml --durations=50
+      env:
+        PL_RUN_CUDA_TESTS: "1"
+      workingDirectory: tests/tests_lite
+      displayName: 'Testing: Lite standard'
+      timeoutInMinutes: "10"
+
+    - bash: bash run_standalone_tests.sh
+      workingDirectory: tests/tests_lite
+      env:
+        PL_USE_MOCKED_MNIST: "1"
+        PL_RUN_CUDA_TESTS: "1"
+        PL_STANDALONE_TESTS_SOURCE: "lightning_lite"
+      displayName: 'Testing: Lite standalone tests'
+      timeoutInMinutes: "10"
+
+    - bash: |
+        python -m coverage report
+        python -m coverage xml
+        python -m coverage html
+        python -m codecov --token=$(CODECOV_TOKEN) --commit=$(Build.SourceVersion) --flags=gpu,pytest --name="GPU-coverage" --env=linux,azure
+        ls -l
+      workingDirectory: tests/tests_lite
+      displayName: 'Statistics'
+
+    - task: PublishTestResults@2
+      displayName: 'Publish test results'
+      inputs:
+        testResultsFiles: '$(Build.StagingDirectory)/test-results.xml'
+        testRunTitle: '$(Agent.OS) - $(Build.DefinitionName) - Python $(python.version)'
+      condition: succeededOrFailed()
diff --git a/.azure/gpu-tests.yml b/.azure/gpu-tests.yml
index 3ed4601d1b..e53d8f0756 100644
--- a/.azure/gpu-tests.yml
+++ b/.azure/gpu-tests.yml
@@ -119,6 +119,7 @@ jobs:
       env:
         PL_USE_MOCKED_MNIST: "1"
         PL_RUN_CUDA_TESTS: "1"
+        PL_STANDALONE_TESTS_SOURCE: "pytorch_lightning"
       displayName: 'Testing: PyTorch standalone tests'
       timeoutInMinutes: "35"
       condition: eq(variables['continue'], '1')
diff --git a/.github/checkgroup.yml b/.github/checkgroup.yml
index 531df1ebea..e8892926f6 100644
--- a/.github/checkgroup.yml
+++ b/.github/checkgroup.yml
@@ -41,6 +41,15 @@ subprojects:
       - "pl-cpu (windows-2022, 3.10, latest, stable)"
       - "pl-cpu (windows-2022, 3.7, latest, stable)"
       - "pl-cpu (windows-2022, 3.7, oldest, stable)"
+      - "lite-cpu (macOS-11, 3.10, latest, stable)"
+      - "lite-cpu (macOS-11, 3.7, latest, stable)"
+      - "lite-cpu (macOS-11, 3.7, oldest, stable)"
+      - "lite-cpu (ubuntu-20.04, 3.10, latest, stable)"
+      - "lite-cpu (ubuntu-20.04, 3.7, latest, stable)"
+      - "lite-cpu (ubuntu-20.04, 3.7, oldest, stable)"
+      - "lite-cpu (windows-2022, 3.10, latest, stable)"
+      - "lite-cpu (windows-2022, 3.7, latest, stable)"
+      - "lite-cpu (windows-2022, 3.7, oldest, stable)"
       - "make-doctest (pytorch)"
       - "make-html (pytorch)"
       - "mypy"
@@ -60,6 +69,13 @@ subprojects:
     checks:
       - "pytorch-lightning (GPUs)"
 
+  - id: "lightning_lite: Azure GPU"
+    paths:
+      - ".azure/gpu-tests-lite.yml"
+      - "tests/tests_lite/run_standalone_*.sh"
+    checks:
+      - "lightning-lite (GPUs)"
+
   - id: "pytorch_lightning: Azure HPU"
     paths:
       - ".azure/hpu-tests.yml"
diff --git a/.github/workflows/ci-lite-test-full.yml b/.github/workflows/ci-lite-test-full.yml
new file mode 100644
index 0000000000..69c8a12069
--- /dev/null
+++ b/.github/workflows/ci-lite-test-full.yml
@@ -0,0 +1,120 @@
+name: Test Lite full
+
+# see: https://help.github.com/en/actions/reference/events-that-trigger-workflows
+on:  # Trigger the workflow on push or pull request, but only for the master branch
+  push:
+    branches: [master, "release/*"]
+  pull_request:
+    branches: [master, "release/*"]
+    types: [opened, reopened, ready_for_review, synchronize]
+    paths:
+      - "requirements/lite/**"
+      - "src/lightning_lite/**"
+      - "tests/tests_lite/**"
+      - "setup.cfg"  # includes pytest config
+      - ".github/workflows/ci-lite-test-full.yml"
+
+concurrency:
+  group: ${{ github.workflow }}-${{ github.ref }}-${{ github.head_ref }}
+  cancel-in-progress: ${{ ! (github.ref == 'refs/heads/master' || startsWith(github.ref, 'refs/heads/release/')) }}
+
+jobs:
+
+  lite-cpu:
+    runs-on: ${{ matrix.os }}
+    if: github.event.pull_request.draft == false
+    strategy:
+      fail-fast: false
+      matrix:
+        os: [ubuntu-20.04, windows-2022, macOS-11]
+        python-version: ["3.7", "3.10"]  # minimum, maximum
+        requires: ["oldest", "latest"]
+        release: ["stable"]
+        exclude:
+          # There's no distribution of the oldest PyTorch 1.9 for Python 3.10.
+          # TODO: Remove the exclusion when dropping PyTorch 1.9 support.
+          - {python-version: "3.10", requires: "oldest"}
+
+    timeout-minutes: 40
+
+    steps:
+    - uses: actions/checkout@v2
+
+    - name: Set up Python ${{ matrix.python-version }}
+      uses: actions/setup-python@v4
+      with:
+        python-version: ${{ matrix.python-version }}
+
+    - name: Reset caching
+      run: python -c "import time; days = time.time() / 60 / 60 / 24; print(f'TIME_PERIOD=d{int(days / 2) * 2}')" >> $GITHUB_ENV
+
+    - name: basic setup
+      run: |
+        pip --version
+        pip install -q fire
+
+    - name: Setup Windows
+      if: runner.os == 'windows'
+      run: |
+        python .actions/assistant.py requirements_prune_pkgs horovod
+
+    - name: Set min. dependencies
+      if: matrix.requires == 'oldest'
+      run: |
+        python .actions/assistant.py replace_oldest_ver
+
+    # Note: This uses an internal pip API and may not always work
+    # https://github.com/actions/cache/blob/master/examples.md#multiple-oss-in-a-workflow
+    - name: Get pip cache dir
+      id: pip-cache
+      run: echo "::set-output name=dir::$(pip cache dir)"
+
+    - name: pip cache
+      uses: actions/cache@v3
+      with:
+        path: ${{ steps.pip-cache.outputs.dir }}
+        key: ${{ runner.os }}-pip-td${{ env.TIME_PERIOD }}-py${{ matrix.python-version }}-${{ matrix.release }}-${{ matrix.requires }}-${{ hashFiles('requirements/lite/*.txt') }}
+        restore-keys: |
+          ${{ runner.os }}-pip-td${{ env.TIME_PERIOD }}-py${{ matrix.python-version }}-${{ matrix.release }}-${{ matrix.requires }}-
+
+    - name: Install dependencies
+      env:
+        PACKAGE_NAME: pytorch  # TODO(lite) does this need to say lite?
+        FREEZE_REQUIREMENTS: 1
+      run: |
+        flag=$(python -c "print('--pre' if '${{matrix.release}}' == 'pre' else '')" 2>&1)
+        url=$(python -c "print('test/cpu/torch_test.html' if '${{matrix.release}}' == 'pre' else 'cpu/torch_stable.html')" 2>&1)
+        pip install -e .[test] --upgrade $flag --find-links "https://download.pytorch.org/whl/${url}"
+        pip list
+      shell: bash
+
+    - name: Testing Lite
+      working-directory: tests/tests_lite
+      # NOTE: do not include coverage report here, see: https://github.com/nedbat/coveragepy/issues/1003
+      run: coverage run --source lightning_lite -m pytest -v --durations=50 --junitxml=results-${{ runner.os }}-py${{ matrix.python-version }}-${{ matrix.requires }}-${{ matrix.release }}.xml
+
+    - name: Upload pytest results
+      if: failure()
+      uses: actions/upload-artifact@v3
+      with:
+        name: unittest-results-${{ runner.os }}-py${{ matrix.python-version }}-${{ matrix.requires }}-${{ matrix.release }}
+        path: tests/tests_lite/results-${{ runner.os }}-py${{ matrix.python-version }}-${{ matrix.requires }}-${{ matrix.release }}.xml
+
+    - name: Statistics
+      if: success()
+      working-directory: tests/tests_lite
+      run: |
+        coverage report
+        coverage xml
+
+    - name: Upload coverage to Codecov
+      uses: codecov/codecov-action@v3
+      if: always()
+      # see: https://github.com/actions/toolkit/issues/399
+      continue-on-error: true
+      with:
+        token: ${{ secrets.CODECOV_TOKEN }}
+        file: tests/tests_lite/coverage.xml
+        flags: cpu,pytest,python${{ matrix.python-version }}
+        name: CPU-coverage
+        fail_ci_if_error: false
diff --git a/.github/workflows/ci-pkg-install.yml b/.github/workflows/ci-pkg-install.yml
index a9fdd36693..6eedad2539 100644
--- a/.github/workflows/ci-pkg-install.yml
+++ b/.github/workflows/ci-pkg-install.yml
@@ -34,7 +34,7 @@ jobs:
       max-parallel: 1
       matrix:
         os: [ubuntu-20.04, macOS-11, windows-2022]
-        pkg: ["app", "pytorch"]
+        pkg: ["app", "lite", "pytorch"]
         python-version: [3.8]  # , 3.9
 
     steps:
@@ -110,6 +110,7 @@ jobs:
           python-version: ${{ matrix.python-version }}
 
       - name: Dowload package
+        # todo: download also lite after it is fist published
         run: |
           pip install -q fire requests
           for pkg in 'app' 'pytorch' ; do
diff --git a/.pre-commit-config.yaml b/.pre-commit-config.yaml
index 4b8ec52396..1930f99cd1 100644
--- a/.pre-commit-config.yaml
+++ b/.pre-commit-config.yaml
@@ -43,7 +43,8 @@ repos:
                 docs/source-pytorch/_static/images/general/pl_overview_flat.jpg|
                 docs/source-pytorch/_static/images/general/pl_overview.gif|
                 src/lightning_app/cli/pl-app-template/ui/yarn.lock|
-                src/pytorch_lightning/CHANGELOG.md
+                src/pytorch_lightning/CHANGELOG.md|
+                src/lightning_lite/CHANGELOG.md
             )$
       - id: detect-private-key
 
@@ -98,7 +99,8 @@ repos:
         exclude: |
             (?x)^(
                 src/pytorch_lightning/CHANGELOG.md|
-                src/lightning_app/CHANGELOG.md
+                src/lightning_app/CHANGELOG.md|
+                src/lightning_lite/CHANGELOG.md
             )$
 
   - repo: https://github.com/PyCQA/flake8
diff --git a/dockers/tpu-tests/tpu_test_cases.jsonnet b/dockers/tpu-tests/tpu_test_cases.jsonnet
index f2c106f220..1f6bf4c41b 100644
--- a/dockers/tpu-tests/tpu_test_cases.jsonnet
+++ b/dockers/tpu-tests/tpu_test_cases.jsonnet
@@ -39,6 +39,7 @@ local tputests = base.BaseTest {
       cd tests/tests_pytorch
       coverage run --source=pytorch_lightning -m pytest -vv --durations=0 ./
       echo "\n||| Running standalone tests |||\n"
+      export PL_STANDALONE_TESTS_SOURCE=pytorch_lightning
       export PL_STANDALONE_TESTS_BATCH_SIZE=1
       bash run_standalone_tests.sh
       echo "\n||| END PYTEST LOGS |||\n"
diff --git a/pyproject.toml b/pyproject.toml
index 19702524bc..df89de3d09 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -9,6 +9,7 @@ requires = [
 known_first_party = [
     "pl_examples",
     "pytorch_lightning",
+    "lightning_lite",
     "tests_pytorch",
 ]
 profile = "black"
diff --git a/requirements/lite/base.txt b/requirements/lite/base.txt
new file mode 100644
index 0000000000..89061745d4
--- /dev/null
+++ b/requirements/lite/base.txt
@@ -0,0 +1,7 @@
+# NOTE: the upper bound for the package version is only set for CI stability, and it is dropped while installing this package
+#  in case you want to preserve/enforce restrictions on the latest compatible version, add "strict" as an in-line comment
+
+torch>=1.9.*, <1.13.0
+fsspec[http]>=2021.05.0, !=2021.06.0, <2022.6.0
+packaging>=17.0, <=21.3
+typing-extensions>=4.0.0, <4.3.1
diff --git a/requirements/lite/devel.txt b/requirements/lite/devel.txt
new file mode 100644
index 0000000000..a7d1aa9843
--- /dev/null
+++ b/requirements/lite/devel.txt
@@ -0,0 +1,2 @@
+# install all mandatory dependencies
+-r ./base.txt
diff --git a/requirements/lite/strategies.txt b/requirements/lite/strategies.txt
new file mode 100644
index 0000000000..c06fac969b
--- /dev/null
+++ b/requirements/lite/strategies.txt
@@ -0,0 +1,5 @@
+# NOTE: the upper bound for the package version is only set for CI stability, and it is dropped while installing this package
+#  in case you want to preserve/enforce restrictions on the latest compatible version, add "strict" as an in-line comment
+
+fairscale>=0.4.5, <=0.4.6
+deepspeed>=0.6.0, <=0.7.0
diff --git a/setup.py b/setup.py
index 82a4a969ec..3048f8a1ae 100755
--- a/setup.py
+++ b/setup.py
@@ -54,7 +54,7 @@ from types import ModuleType
 from setuptools import setup
 
 _PACKAGE_NAME = os.environ.get("PACKAGE_NAME", "")
-_PACKAGE_MAPPING = {"pytorch": "pytorch_lightning", "app": "lightning_app"}
+_PACKAGE_MAPPING = {"pytorch": "pytorch_lightning", "app": "lightning_app", "lite": "lightning_lite"}
 _REAL_PKG_NAME = _PACKAGE_MAPPING.get(_PACKAGE_NAME, _PACKAGE_NAME)
 # https://packaging.python.org/guides/single-sourcing-package-version/
 # http://blog.ionelmc.ro/2014/05/25/python-packaging/
diff --git a/src/lightning_lite/CHANGELOG.md b/src/lightning_lite/CHANGELOG.md
new file mode 100644
index 0000000000..280a7e2ac0
--- /dev/null
+++ b/src/lightning_lite/CHANGELOG.md
@@ -0,0 +1,28 @@
+# Changelog
+
+All notable changes to this project will be documented in this file.
+
+The format is based on [Keep a Changelog](http://keepachangelog.com/en/1.0.0/).
+
+## [0.0.x] - 2022-MM-DD
+
+
+### Added
+
+-
+
+### Changed
+
+-
+
+### Deprecated
+
+-
+
+### Removed
+
+-
+
+### Fixed
+
+-
diff --git a/src/lightning_lite/README.md b/src/lightning_lite/README.md
new file mode 100644
index 0000000000..464090415c
--- /dev/null
+++ b/src/lightning_lite/README.md
@@ -0,0 +1 @@
+# TODO
diff --git a/src/lightning_lite/__about__.py b/src/lightning_lite/__about__.py
new file mode 100644
index 0000000000..deb737cdf4
--- /dev/null
+++ b/src/lightning_lite/__about__.py
@@ -0,0 +1,23 @@
+import time
+
+__author__ = "Lightning AI et al."
+__author_email__ = "pytorch@lightning.ai"
+__license__ = "Apache-2.0"
+__copyright__ = f"Copyright (c) 2022-{time.strftime('%Y')}, {__author__}."
+__homepage__ = "https://github.com/Lightning-AI/lightning"
+__docs_url__ = "https://pytorch-lightning.readthedocs.io/en/stable/"
+# TODO
+__docs__ = ""
+__long_docs__ = """
+
+"""
+
+__all__ = [
+    "__author__",
+    "__author_email__",
+    "__copyright__",
+    "__docs__",
+    "__docs_url__",
+    "__homepage__",
+    "__license__",
+]
diff --git a/src/lightning_lite/__init__.py b/src/lightning_lite/__init__.py
new file mode 100644
index 0000000000..5e0d0ad5cb
--- /dev/null
+++ b/src/lightning_lite/__init__.py
@@ -0,0 +1,4 @@
+"""Root package info."""
+
+from lightning_lite.__about__ import *  # noqa: F401, F403
+from lightning_lite.__version__ import version as __version__  # noqa: F401
diff --git a/src/lightning_lite/__setup__.py b/src/lightning_lite/__setup__.py
new file mode 100644
index 0000000000..5c0c8ae660
--- /dev/null
+++ b/src/lightning_lite/__setup__.py
@@ -0,0 +1,98 @@
+import os
+from importlib.util import module_from_spec, spec_from_file_location
+from types import ModuleType
+from typing import Any, Dict
+
+from setuptools import find_packages
+
+_PROJECT_ROOT = "."
+_SOURCE_ROOT = os.path.join(_PROJECT_ROOT, "src")
+_PACKAGE_ROOT = os.path.join(_SOURCE_ROOT, "lightning_lite")
+_PATH_REQUIREMENTS = os.path.join("requirements", "lite")
+_FREEZE_REQUIREMENTS = bool(int(os.environ.get("FREEZE_REQUIREMENTS", 0)))
+
+
+def _load_py_module(name: str, location: str) -> ModuleType:
+    spec = spec_from_file_location(name, location)
+    assert spec, f"Failed to load module {name} from {location}"
+    py = module_from_spec(spec)
+    assert spec.loader, f"ModuleSpec.loader is None for {name} from {location}"
+    spec.loader.exec_module(py)
+    return py
+
+
+def _adjust_manifest(**__: Any) -> None:
+    manifest_path = os.path.join(_PROJECT_ROOT, "MANIFEST.in")
+    assert os.path.isfile(manifest_path)
+    with open(manifest_path) as fp:
+        lines = fp.readlines()
+    lines += [
+        "recursive-exclude src *.md" + os.linesep,
+        "recursive-exclude requirements *.txt" + os.linesep,
+        "recursive-include requirements/lite *.txt" + os.linesep,
+        "recursive-include src/lightning_lite *.md" + os.linesep,
+    ]
+
+    # TODO: remove this once lightning-ui package is ready as a dependency
+    lines += ["recursive-include src/lightning_app/ui *" + os.linesep]
+
+    with open(manifest_path, "w") as fp:
+        fp.writelines(lines)
+
+
+def _setup_args(**__: Any) -> Dict[str, Any]:
+    _path_setup_tools = os.path.join(_PROJECT_ROOT, ".actions", "setup_tools.py")
+    _setup_tools = _load_py_module("setup_tools", _path_setup_tools)
+    _about = _load_py_module("about", os.path.join(_PACKAGE_ROOT, "__about__.py"))
+    _version = _load_py_module("version", os.path.join(_PACKAGE_ROOT, "__version__.py"))
+    _long_description = _setup_tools.load_readme_description(
+        _PACKAGE_ROOT, homepage=_about.__homepage__, version=_version.version
+    )
+
+    return dict(
+        name="lightning-lite",
+        version=_version.version,  # todo: consider using date version + branch for installation from source
+        description=_about.__docs__,
+        author=_about.__author__,
+        author_email=_about.__author_email__,
+        url=_about.__homepage__,
+        download_url="https://github.com/Lightning-AI/lightning",
+        license=_about.__license__,
+        packages=find_packages(where="src", include=["lightning_lite", "lightning_lite.*"]),
+        package_dir={"": "src"},
+        long_description=_long_description,
+        long_description_content_type="text/markdown",
+        include_package_data=True,
+        zip_safe=False,
+        keywords=["deep learning", "pytorch", "AI"],
+        python_requires=">=3.7",
+        setup_requires=["wheel"],
+        install_requires=_setup_tools.load_requirements(_PATH_REQUIREMENTS, unfreeze=not _FREEZE_REQUIREMENTS),
+        # extras_require=_prepare_extras(),  # todo
+        project_urls={
+            "Bug Tracker": "https://github.com/Lightning-AI/lightning/issues",
+            "Documentation": "https://pytorch-lightning.rtfd.io/en/latest/",
+            "Source Code": "https://github.com/Lightning-AI/lightning",
+        },
+        classifiers=[
+            "Environment :: Console",
+            "Natural Language :: English",
+            # How mature is this project? Common values are
+            #   3 - Alpha, 4 - Beta, 5 - Production/Stable
+            "Development Status :: 4 - Beta",
+            # Indicate who your project is intended for
+            "Intended Audience :: Developers",
+            "Topic :: Scientific/Engineering :: Artificial Intelligence",
+            "Topic :: Scientific/Engineering :: Information Analysis",
+            # Pick your license as you wish
+            # 'License :: OSI Approved :: BSD License',
+            "Operating System :: OS Independent",
+            # Specify the Python versions you support here. In particular, ensure
+            # that you indicate whether you support Python 2, Python 3 or both.
+            "Programming Language :: Python :: 3",
+            "Programming Language :: Python :: 3.7",
+            "Programming Language :: Python :: 3.8",
+            "Programming Language :: Python :: 3.9",
+            "Programming Language :: Python :: 3.10",
+        ],
+    )
diff --git a/src/lightning_lite/__version__.py b/src/lightning_lite/__version__.py
new file mode 100644
index 0000000000..61767daea3
--- /dev/null
+++ b/src/lightning_lite/__version__.py
@@ -0,0 +1 @@
+version = "0.0.0dev"
diff --git a/src/lightning_lite/lite.py b/src/lightning_lite/lite.py
new file mode 100644
index 0000000000..65fee1bf09
--- /dev/null
+++ b/src/lightning_lite/lite.py
@@ -0,0 +1,3 @@
+class LightningLite:
+    # Placeholder for real implementation
+    pass
diff --git a/tests/tests_lite/__init__.py b/tests/tests_lite/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/tests_lite/helpers/__init__.py b/tests/tests_lite/helpers/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/tests_lite/helpers/runif.py b/tests/tests_lite/helpers/runif.py
new file mode 100644
index 0000000000..280af6a96f
--- /dev/null
+++ b/tests/tests_lite/helpers/runif.py
@@ -0,0 +1,75 @@
+# Copyright The PyTorch Lightning team.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+import os
+
+import pytest
+import torch
+
+
+# TODO(lite): Add all RunIf conditions once the relevant utilities have moved to lite source dir
+class RunIf:
+    """RunIf wrapper for simple marking specific cases, fully compatible with pytest.mark::
+
+    @RunIf(min_torch="0.0")
+    @pytest.mark.parametrize("arg1", [1, 2.0])
+    def test_wrapper(arg1):
+        assert arg1 > 0.0
+    """
+
+    def __new__(
+        self,
+        *args,
+        min_cuda_gpus: int = 0,
+        standalone: bool = False,
+        **kwargs,
+    ):
+        """
+        Args:
+            *args: Any :class:`pytest.mark.skipif` arguments.
+            min_cuda_gpus: Require this number of gpus and that the ``PL_RUN_CUDA_TESTS=1`` environment variable is set.
+            standalone: Mark the test as standalone, our CI will run it in a separate process.
+                This requires that the ``PL_RUN_STANDALONE_TESTS=1`` environment variable is set.
+            **kwargs: Any :class:`pytest.mark.skipif` keyword arguments.
+        """
+        conditions = []
+        reasons = []
+
+        if min_cuda_gpus:
+            conditions.append(torch.cuda.device_count() < min_cuda_gpus)
+            reasons.append(f"GPUs>={min_cuda_gpus}")
+            # used in conftest.py::pytest_collection_modifyitems
+            kwargs["min_cuda_gpus"] = True
+
+        if standalone:
+            env_flag = os.getenv("PL_RUN_STANDALONE_TESTS", "0")
+            conditions.append(env_flag != "1")
+            reasons.append("Standalone execution")
+            # used in conftest.py::pytest_collection_modifyitems
+            kwargs["standalone"] = True
+
+        reasons = [rs for cond, rs in zip(conditions, reasons) if cond]
+        return pytest.mark.skipif(
+            *args, condition=any(conditions), reason=f"Requires: [{' + '.join(reasons)}]", **kwargs
+        )
+
+
+@RunIf(min_torch="99")
+def test_always_skip():
+    exit(1)
+
+
+@pytest.mark.parametrize("arg1", [0.5, 1.0, 2.0])
+@RunIf(min_torch="0.0")
+def test_wrapper(arg1: float):
+    assert arg1 > 0.0
diff --git a/tests/tests_lite/run_standalone_tests.sh b/tests/tests_lite/run_standalone_tests.sh
new file mode 100644
index 0000000000..9f91f4bc3f
--- /dev/null
+++ b/tests/tests_lite/run_standalone_tests.sh
@@ -0,0 +1,92 @@
+#!/bin/bash
+# Copyright The PyTorch Lightning team.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+set -e
+# THIS FILE ASSUMES IT IS RUN INSIDE THE tests/tests_<package> DIRECTORY
+
+# Batch size for testing: Determines how many standalone test invocations run in parallel
+# It can be set through the env variable PL_STANDALONE_TESTS_BATCH_SIZE and defaults to 6 if not set
+test_batch_size="${PL_STANDALONE_TESTS_BATCH_SIZE:-6}"
+source="${PL_STANDALONE_TESTS_SOURCE}"
+
+# this environment variable allows special tests to run
+export PL_RUN_STANDALONE_TESTS=1
+# python arguments
+defaults="-m coverage run --source $source --append -m pytest --no-header"
+
+# find tests marked as `@RunIf(standalone=True)`. done manually instead of with pytest because it is faster
+grep_output=$(grep --recursive --word-regexp . --regexp 'standalone=True' --include '*.py')
+
+# file paths, remove duplicates
+files=$(echo "$grep_output" | cut -f1 -d: | sort | uniq)
+
+# get the list of parametrizations. we need to call them separately. the last two lines are removed.
+# note: if there's a syntax error, this will fail with some garbled output
+if [[ "$OSTYPE" == "darwin"* ]]; then
+  parametrizations=$(python -m pytest $files --collect-only --quiet "$@" | tail -r | sed -e '1,3d' | tail -r)
+else
+  parametrizations=$(python -m pytest $files --collect-only --quiet "$@" | head -n -2)
+fi
+# remove the "tests/tests_lite" path suffixes
+parametrizations=${parametrizations//"tests/tests_lite/"/}
+parametrizations_arr=($parametrizations)
+
+# tests to skip - space separated
+blocklist='utilities/test_warnings.py'
+report=''
+
+rm -f standalone_test_output.txt  # in case it exists, remove it
+function show_batched_output {
+  if [ -f standalone_test_output.txt ]; then  # if exists
+    cat standalone_test_output.txt
+    rm standalone_test_output.txt
+  fi
+}
+trap show_batched_output EXIT  # show the output on exit
+
+for i in "${!parametrizations_arr[@]}"; do
+  parametrization=${parametrizations_arr[$i]}
+
+  # check blocklist
+  if echo $blocklist | grep -F "${parametrization}"; then
+    report+="Skipped\t$parametrization\n"
+    # do not continue the loop because we might need to wait for batched jobs
+  else
+    echo "Running $parametrization"
+    # execute the test in the background
+    # redirect to a log file that buffers test output. since the tests will run in the background, we cannot let them
+    # output to std{out,err} because the outputs would be garbled together
+    python ${defaults} "$parametrization" &>> standalone_test_output.txt &
+    # save the PID in an array
+    pids[${i}]=$!
+    # add row to the final report
+    report+="Ran\t$parametrization\n"
+  fi
+
+  if ((($i + 1) % $test_batch_size == 0)); then
+    # wait for running tests
+    for pid in ${pids[*]}; do wait $pid; done
+    unset pids  # empty the array
+    show_batched_output
+  fi
+done
+# wait for leftover tests
+for pid in ${pids[*]}; do wait $pid; done
+show_batched_output
+
+# echo test report
+printf '=%.s' {1..80}
+printf "\n$report"
+printf '=%.s' {1..80}
+printf '\n'
diff --git a/tests/tests_lite/test_lite.py b/tests/tests_lite/test_lite.py
new file mode 100644
index 0000000000..a7df3089cb
--- /dev/null
+++ b/tests/tests_lite/test_lite.py
@@ -0,0 +1,12 @@
+from tests_lite.helpers.runif import RunIf
+
+from lightning_lite.lite import LightningLite  # noqa: F401
+
+
+def test_placeholder(tmpdir):
+    assert True
+
+
+@RunIf(min_cuda_gpus=2, standalone=True)
+def test_placeholder_standalone(tmpdir):
+    assert True
diff --git a/tests/tests_pytorch/run_standalone_tests.sh b/tests/tests_pytorch/run_standalone_tests.sh
index 7e9292f445..1443c6885c 100644
--- a/tests/tests_pytorch/run_standalone_tests.sh
+++ b/tests/tests_pytorch/run_standalone_tests.sh
@@ -13,16 +13,17 @@
 # See the License for the specific language governing permissions and
 # limitations under the License.
 set -e
-# THIS FILE ASSUMES IT IS RUN INSIDE THE tests/tests_pytorch DIRECTORY
+# THIS FILE ASSUMES IT IS RUN INSIDE THE tests/tests_<package> DIRECTORY
 
 # Batch size for testing: Determines how many standalone test invocations run in parallel
 # It can be set through the env variable PL_STANDALONE_TESTS_BATCH_SIZE and defaults to 6 if not set
 test_batch_size="${PL_STANDALONE_TESTS_BATCH_SIZE:-6}"
+source="${PL_STANDALONE_TESTS_SOURCE}"
 
 # this environment variable allows special tests to run
 export PL_RUN_STANDALONE_TESTS=1
 # python arguments
-defaults='-m coverage run --source pytorch_lightning --append -m pytest --no-header'
+defaults="-m coverage run --source $source --append -m pytest --no-header"
 
 # find tests marked as `@RunIf(standalone=True)`. done manually instead of with pytest because it is faster
 grep_output=$(grep --recursive --word-regexp . --regexp 'standalone=True' --include '*.py')