diff --git a/kedro-airflow/kedro_airflow/airflow_dag_kwargs_template.j2 b/kedro-airflow/kedro_airflow/airflow_dag_kwargs_template.j2
new file mode 100644
index 000000000..5cb88ef81
--- /dev/null
+++ b/kedro-airflow/kedro_airflow/airflow_dag_kwargs_template.j2
@@ -0,0 +1,14 @@
+start_date=datetime(2023, 1, 1),
+max_active_runs=3,
+# https://airflow.apache.org/docs/stable/scheduler.html#dag-runs
+schedule_interval="@once",
+catchup=False,
+# Default settings applied to all tasks
+default_args=dict(
+    owner="{{ default_args['owner'] }}",
+    depends_on_past=False,
+    email_on_failure=False,
+    email_on_retry=False,
+    retries=1,
+    retry_delay=timedelta(minutes=5)
+)
diff --git a/kedro-airflow/kedro_airflow/airflow_dag_template.j2 b/kedro-airflow/kedro_airflow/airflow_dag_template.j2
index 0538c5bdd..e37cb3e2c 100644
--- a/kedro-airflow/kedro_airflow/airflow_dag_template.j2
+++ b/kedro-airflow/kedro_airflow/airflow_dag_template.j2
@@ -44,9 +44,10 @@ package_name = "{{ package_name }}"
 # Using a DAG context manager, you don't have to specify the dag property of each task
 with DAG(
     dag_id="{{ dag_name | safe | slugify }}",
-    {% if kwargs %}{% filter indent(width=4) %}
-    {{ kwargs | safe }}
-    {% endfilter %}{% endif -%}
+    {% if kwargs_template -%}
+    {% filter indent(width=4) %}    {% include kwargs_template with context -%}
+    {% endfilter %}
+    {%- endif %}
 ) as dag:
     tasks = {
     {% for node in pipeline.nodes %}        "{{ node.name | safe | slugify }}": KedroOperator(
@@ -57,8 +58,8 @@ with DAG(
             project_path=project_path,
             env=env,
         ),
-{% endfor %}
-    }
+{% endfor %}    }
+
     {% for parent_node, child_nodes in dependencies.items() -%}
     {% for child in child_nodes %}    tasks["{{ parent_node.name | safe | slugify }}"] >> tasks["{{ child.name | safe | slugify }}"]
     {% endfor %}
diff --git a/kedro-airflow/kedro_airflow/plugin.py b/kedro-airflow/kedro_airflow/plugin.py
index d23e6bcd6..6f717e8bf 100644
--- a/kedro-airflow/kedro_airflow/plugin.py
+++ b/kedro-airflow/kedro_airflow/plugin.py
@@ -7,7 +7,8 @@
 import jinja2
 from click import secho
 from kedro.config import MissingConfigException
-from kedro.framework.cli.utils import ENV_HELP
+from kedro.framework.cli.project import PARAMS_ARG_HELP
+from kedro.framework.cli.utils import ENV_HELP, KedroCliError, _split_params
 from kedro.framework.project import pipelines
 from kedro.framework.session import KedroSession
 from kedro.framework.startup import ProjectMetadata, bootstrap_project
@@ -40,7 +41,7 @@ def airflow_commands():
     "target_path",
     type=click.Path(writable=True, resolve_path=True, file_okay=False),
     default="./airflow_dags/",
-    help="The directory path to store the generated Airflow dags"
+    help="The directory path to store the generated Airflow dags",
 )
 @click.option(
     "-j",
@@ -49,7 +50,23 @@ def airflow_commands():
         exists=True, readable=True, resolve_path=True, file_okay=True, dir_okay=False
     ),
     default=Path(__file__).parent / "airflow_dag_template.j2",
-    help="The template file for the generated Airflow dags"
+    help="The template file for the generated Airflow dags",
+)
+@click.option(
+    "-k",
+    "--kwargs-template",
+    type=click.Path(
+        exists=True, readable=True, resolve_path=True, file_okay=True, dir_okay=False
+    ),
+    default=Path(__file__).parent / "airflow_dag_kwargs_template.j2",
+    help="The template file for the kwargs in the Airflow dags",
+)
+@click.option(
+    "--params",
+    type=click.UNPROCESSED,
+    default="",
+    help=PARAMS_ARG_HELP,
+    callback=_split_params,
 )
 @click.pass_obj
 def create(
@@ -58,6 +75,8 @@ def create(
     env,
     target_path,
     jinja_file,
+    kwargs_template,
+    params,
 ):  # pylint: disable=too-many-locals,too-many-arguments
     """Create an Airflow DAG for a project"""
     project_path = Path().cwd()
@@ -66,20 +85,30 @@ def create(
         context = session.load_context()
         try:
             config_airflow = context.config_loader.get("airflow*", "airflow/**")
+            dag_config = {}
+            # Load the default config if specified
+            if "default" in config_airflow:
+                dag_config.update(config_airflow["default"])
+            # Update with pipeline-specific config if present
             if pipeline_name in config_airflow:
-                kwargs = config_airflow[pipeline_name]
-            else:
-                kwargs = config_airflow["kwargs"]
+                dag_config.update(config_airflow[pipeline_name])
         except MissingConfigException:
-            kwargs = {}
+            dag_config = {}
+
+        # Update with params if provided
+        dag_config.update(params)
 
         jinja_file = Path(jinja_file).resolve()
+        kwargs_template = Path(kwargs_template).resolve()
+        if jinja_file.parent != kwargs_template.parent:
+            raise KedroCliError(f"Templates should be placed in the same directory.")
         loader = jinja2.FileSystemLoader(jinja_file.parent)
         jinja_env = jinja2.Environment(
-            autoescape=True, loader=loader, lstrip_blocks=True, trim_blocks=True
+            autoescape=True, loader=loader, lstrip_blocks=True  # , trim_blocks=True
         )
         jinja_env.filters["slugify"] = slugify
         template = jinja_env.get_template(jinja_file.name)
+        kwargs_template = kwargs_template.name
 
         package_name = metadata.package_name
         dag_filename = f"{package_name}_{pipeline_name}_dag.py"
@@ -90,6 +119,8 @@ def create(
         target_path.parent.mkdir(parents=True, exist_ok=True)
 
         pipeline = pipelines.get(pipeline_name)
+        if pipeline is None:
+            raise KedroCliError(f"Pipeline {pipeline_name} not found.")
 
         dependencies = defaultdict(list)
         for node, parent_nodes in pipeline.node_dependencies.items():
@@ -103,7 +134,8 @@ def create(
             pipeline_name=pipeline_name,
             package_name=package_name,
             pipeline=pipeline,
-            kwargs=kwargs,
+            kwargs_template=kwargs_template,
+            **dag_config,
         ).dump(str(target_path))
 
         secho("")
diff --git a/kedro-airflow/pyproject.toml b/kedro-airflow/pyproject.toml
index 42fe8974b..6787a54e8 100644
--- a/kedro-airflow/pyproject.toml
+++ b/kedro-airflow/pyproject.toml
@@ -31,7 +31,10 @@ packages = ["kedro_airflow"]
 zip-safe = false
 
 [tool.setuptools.package-data]
-kedro_airflow = ["kedro_airflow/airflow_dag_template.j2"]
+kedro_airflow = [
+    "kedro_airflow/airflow_dag_template.j2",
+    "kedro_airflow/airflow_dag_kwargs_template.j2"
+]
 
 [tool.setuptools.dynamic]
 readme = {file = "README.md", content-type = "text/markdown"}