diff --git a/bundle/libraries/helpers.go b/bundle/libraries/helpers.go
index b7e707cc..2149e588 100644
--- a/bundle/libraries/helpers.go
+++ b/bundle/libraries/helpers.go
@@ -1,19 +1,24 @@
 package libraries
 
-import "github.com/databricks/databricks-sdk-go/service/compute"
+import (
+	"fmt"
 
-func libraryPath(library *compute.Library) string {
+	"github.com/databricks/databricks-sdk-go/service/compute"
+)
+
+func libraryPath(library *compute.Library) (string, error) {
 	if library.Whl != "" {
-		return library.Whl
+		return library.Whl, nil
 	}
 	if library.Jar != "" {
-		return library.Jar
+		return library.Jar, nil
 	}
 	if library.Egg != "" {
-		return library.Egg
+		return library.Egg, nil
 	}
 	if library.Requirements != "" {
-		return library.Requirements
+		return library.Requirements, nil
 	}
-	return ""
+
+	return "", fmt.Errorf("not supported library type")
 }
diff --git a/bundle/libraries/helpers_test.go b/bundle/libraries/helpers_test.go
index e4bd3277..9d7e12ee 100644
--- a/bundle/libraries/helpers_test.go
+++ b/bundle/libraries/helpers_test.go
@@ -10,9 +10,27 @@ import (
 func TestLibraryPath(t *testing.T) {
 	path := "/some/path"
 
-	assert.Equal(t, path, libraryPath(&compute.Library{Whl: path}))
-	assert.Equal(t, path, libraryPath(&compute.Library{Jar: path}))
-	assert.Equal(t, path, libraryPath(&compute.Library{Egg: path}))
-	assert.Equal(t, path, libraryPath(&compute.Library{Requirements: path}))
-	assert.Equal(t, "", libraryPath(&compute.Library{}))
+	p, err := libraryPath(&compute.Library{Whl: path})
+	assert.Equal(t, path, p)
+	assert.Nil(t, err)
+
+	p, err = libraryPath(&compute.Library{Jar: path})
+	assert.Equal(t, path, p)
+	assert.Nil(t, err)
+
+	p, err = libraryPath(&compute.Library{Egg: path})
+	assert.Equal(t, path, p)
+	assert.Nil(t, err)
+
+	p, err = libraryPath(&compute.Library{Requirements: path})
+	assert.Equal(t, path, p)
+	assert.Nil(t, err)
+
+	p, err = libraryPath(&compute.Library{})
+	assert.Equal(t, "", p)
+	assert.NotNil(t, err)
+
+	p, err = libraryPath(&compute.Library{Pypi: &compute.PythonPyPiLibrary{Package: "pypipackage"}})
+	assert.Equal(t, "", p)
+	assert.NotNil(t, err)
 }
diff --git a/bundle/libraries/libraries.go b/bundle/libraries/libraries.go
index 33b848dd..f75e23a8 100644
--- a/bundle/libraries/libraries.go
+++ b/bundle/libraries/libraries.go
@@ -67,7 +67,12 @@ func FindTasksWithLocalLibraries(b *bundle.Bundle) []jobs.Task {
 
 func isTaskWithLocalLibraries(task jobs.Task) bool {
 	for _, l := range task.Libraries {
-		if IsLibraryLocal(libraryPath(&l)) {
+		p, err := libraryPath(&l)
+		// If there's an error, skip the library because it's not of supported type
+		if err != nil {
+			continue
+		}
+		if IsLibraryLocal(p) {
 			return true
 		}
 	}
diff --git a/bundle/libraries/local_path.go b/bundle/libraries/local_path.go
index 417bce10..e4956240 100644
--- a/bundle/libraries/local_path.go
+++ b/bundle/libraries/local_path.go
@@ -43,6 +43,10 @@ func IsLocalPath(p string) bool {
 // We can't use IsLocalPath beacuse environment dependencies can be
 // a pypi package name which can be misinterpreted as a local path by IsLocalPath.
 func IsLibraryLocal(dep string) bool {
+	if dep == "" {
+		return false
+	}
+
 	possiblePrefixes := []string{
 		".",
 	}
diff --git a/bundle/libraries/local_path_test.go b/bundle/libraries/local_path_test.go
index 7f84b324..667d64ec 100644
--- a/bundle/libraries/local_path_test.go
+++ b/bundle/libraries/local_path_test.go
@@ -48,6 +48,7 @@ func TestIsLibraryLocal(t *testing.T) {
 		{path: "../../local/*.whl", expected: true},
 		{path: "..\\..\\local\\*.whl", expected: true},
 		{path: "file://path/to/package/whl.whl", expected: true},
+		{path: "", expected: false},
 		{path: "pypipackage", expected: false},
 		{path: "/Volumes/catalog/schema/volume/path.whl", expected: false},
 		{path: "/Workspace/my_project/dist.whl", expected: false},
diff --git a/bundle/libraries/workspace_path.go b/bundle/libraries/workspace_path.go
index b08ca161..126ad3f1 100644
--- a/bundle/libraries/workspace_path.go
+++ b/bundle/libraries/workspace_path.go
@@ -29,8 +29,8 @@ func IsWorkspacePath(path string) bool {
 
 // IsWorkspaceLibrary returns true if the specified library refers to a workspace path.
 func IsWorkspaceLibrary(library *compute.Library) bool {
-	path := libraryPath(library)
-	if path == "" {
+	path, err := libraryPath(library)
+	if err != nil {
 		return false
 	}
 
diff --git a/bundle/python/warning_test.go b/bundle/python/warning_test.go
index dd6397f7..b2296392 100644
--- a/bundle/python/warning_test.go
+++ b/bundle/python/warning_test.go
@@ -223,6 +223,17 @@ func TestNoIncompatibleWheelTasks(t *testing.T) {
 										{Whl: "./dist/test.whl"},
 									},
 								},
+								{
+									TaskKey:           "key7",
+									PythonWheelTask:   &jobs.PythonWheelTask{},
+									ExistingClusterId: "test-key-2",
+									Libraries: []compute.Library{
+										{Whl: "signol_lib-0.4.4-20240822+prod-py3-none-any.whl"},
+										{Pypi: &compute.PythonPyPiLibrary{
+											Package: "requests==2.25.1",
+										}},
+									},
+								},
 							},
 						},
 					},
@@ -241,6 +252,46 @@ func TestNoIncompatibleWheelTasks(t *testing.T) {
 	require.False(t, hasIncompatibleWheelTasks(context.Background(), b))
 }
 
+func TestTasksWithPyPiPackageAreCompatible(t *testing.T) {
+	b := &bundle.Bundle{
+		Config: config.Root{
+			Resources: config.Resources{
+				Jobs: map[string]*resources.Job{
+					"job1": {
+						JobSettings: &jobs.JobSettings{
+							JobClusters: []jobs.JobCluster{
+								{
+									JobClusterKey: "cluster1",
+									NewCluster: compute.ClusterSpec{
+										SparkVersion: "12.2.x-scala2.12",
+									},
+								},
+							},
+							Tasks: []jobs.Task{
+								{
+									TaskKey:           "key1",
+									PythonWheelTask:   &jobs.PythonWheelTask{},
+									ExistingClusterId: "test-key-2",
+									Libraries: []compute.Library{
+										{Pypi: &compute.PythonPyPiLibrary{
+											Package: "requests==2.25.1",
+										}},
+									},
+								},
+							},
+						},
+					},
+				},
+			},
+		},
+	}
+
+	m := mocks.NewMockWorkspaceClient(t)
+	b.SetWorkpaceClient(m.WorkspaceClient)
+
+	require.False(t, hasIncompatibleWheelTasks(context.Background(), b))
+}
+
 func TestNoWarningWhenPythonWheelWrapperIsOn(t *testing.T) {
 	b := &bundle.Bundle{
 		Config: config.Root{