diff --git a/cai2hcl/common/hcl_write.go b/cai2hcl/common/hcl_write.go
index 70684f9feb..086f65d27b 100644
--- a/cai2hcl/common/hcl_write.go
+++ b/cai2hcl/common/hcl_write.go
@@ -2,8 +2,10 @@ package common
 
 import (
 	"fmt"
+	"sort"
+	"strings"
 
-	"github.com/hashicorp/hcl/hcl/printer"
+	"github.com/hashicorp/hcl/v2"
 	"github.com/hashicorp/hcl/v2/hclwrite"
 	"github.com/zclconf/go-cty/cty"
 )
@@ -13,17 +15,36 @@ func HclWriteBlocks(blocks []*HCLResourceBlock) ([]byte, error) {
 	f := hclwrite.NewFile()
 	rootBody := f.Body()
 
+	variableMap := make(map[string]struct{})
+
 	for _, resourceBlock := range blocks {
 		hclBlock := rootBody.AppendNewBlock("resource", resourceBlock.Labels)
-		if err := hclWriteBlock(resourceBlock.Value, hclBlock.Body()); err != nil {
+		if err := hclWriteBlock(resourceBlock.Value, hclBlock.Body(), variableMap); err != nil {
 			return nil, err
 		}
 	}
 
-	return printer.Format(f.Bytes())
+	varNames := make([]string, 0, len(variableMap))
+	for name := range variableMap {
+		varNames = append(varNames, name)
+	}
+	sort.Strings(varNames)
+
+	for _, name := range varNames {
+		rootBody.AppendNewline()
+		varBlock := rootBody.AppendNewBlock("variable", []string{name})
+
+		// type = string
+		t := hcl.Traversal{
+			hcl.TraverseRoot{Name: "string"},
+		}
+		varBlock.Body().SetAttributeTraversal("type", t)
+	}
+
+	return f.Bytes(), nil
 }
 
-func hclWriteBlock(val cty.Value, body *hclwrite.Body) error {
+func hclWriteBlock(val cty.Value, body *hclwrite.Body, variableMap map[string]struct{}) error {
 	if val.IsNull() {
 		return nil
 	}
@@ -40,7 +61,7 @@ func hclWriteBlock(val cty.Value, body *hclwrite.Body) error {
 		switch {
 		case objValType.IsObjectType():
 			newBlock := body.AppendNewBlock(objKey.AsString(), nil)
-			if err := hclWriteBlock(objVal, newBlock.Body()); err != nil {
+			if err := hclWriteBlock(objVal, newBlock.Body(), variableMap); err != nil {
 				return err
 			}
 		case objValType.IsCollectionType():
@@ -53,7 +74,7 @@ func hclWriteBlock(val cty.Value, body *hclwrite.Body) error {
 				for listIterator.Next() {
 					_, listVal := listIterator.Element()
 					subBlock := body.AppendNewBlock(objKey.AsString(), nil)
-					if err := hclWriteBlock(listVal, subBlock.Body()); err != nil {
+					if err := hclWriteBlock(listVal, subBlock.Body(), variableMap); err != nil {
 						return err
 					}
 				}
@@ -61,6 +82,25 @@ func hclWriteBlock(val cty.Value, body *hclwrite.Body) error {
 			}
 			fallthrough
 		default:
+			if objValType == cty.String {
+				strVal := objVal.AsString()
+				if strVal == "" {
+					continue
+				}
+
+				if strings.HasPrefix(strVal, "unknown.") {
+					varName := strings.TrimPrefix(strVal, "unknown.")
+					variableMap[varName] = struct{}{}
+
+					t := hcl.Traversal{
+						hcl.TraverseRoot{Name: "var"},
+						hcl.TraverseAttr{Name: varName},
+					}
+					body.SetAttributeTraversal(objKey.AsString(), t)
+					continue
+				}
+			}
+
 			if objValType.FriendlyName() == "string" && objVal.AsString() == "" {
 				continue
 			}
diff --git a/cai2hcl/common/hcl_write_test.go b/cai2hcl/common/hcl_write_test.go
new file mode 100644
index 0000000000..fc15b0854a
--- /dev/null
+++ b/cai2hcl/common/hcl_write_test.go
@@ -0,0 +1,44 @@
+package common
+
+import (
+	"strings"
+	"testing"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/zclconf/go-cty/cty"
+)
+
+func TestHclWriteBlocks_VariableReplacement(t *testing.T) {
+	// Create a test block with a string value starting with "unknown."
+	blocks := []*HCLResourceBlock{
+		{
+			Labels: []string{"test_resource", "test_name"},
+			Value: cty.ObjectVal(map[string]cty.Value{
+				"attr1": cty.StringVal("unknown.my_variable"),
+				"attr2": cty.StringVal("normal_value"),
+				"attr3": cty.ObjectVal(map[string]cty.Value{
+					"nested_attr": cty.StringVal("unknown.another_variable"),
+				}),
+			}),
+		},
+	}
+
+	output, err := HclWriteBlocks(blocks)
+	assert.Nil(t, err)
+
+	hclString := string(output)
+
+	// Check if the variable references are correct
+	// Note: hclwrite output format might vary slightly, but we expect var.my_variable
+	// We expect "attr1 = var.my_variable" (no quotes around var.my_variable)
+	assert.Contains(t, hclString, "attr1 = var.my_variable")
+	assert.Contains(t, hclString, "nested_attr = var.another_variable")
+
+	// Check if normal strings are still quoted
+	assert.Contains(t, hclString, `attr2 = "normal_value"`)
+
+	// Check if variable blocks are generated
+	assert.True(t, strings.Contains(hclString, `variable "my_variable" {`), "missing variable block for my_variable")
+	assert.True(t, strings.Contains(hclString, `type = string`), "missing type = string")
+	assert.True(t, strings.Contains(hclString, `variable "another_variable" {`), "missing variable block for another_variable")
+}