diff --git a/perestroika/build-deb.sh b/perestroika/build-deb.sh
index a0338e4..9bbd7f9 100755
--- a/perestroika/build-deb.sh
+++ b/perestroika/build-deb.sh
@@ -22,8 +22,12 @@ main () {
       local version=`head -1 ${_debianpath}/debian/changelog | sed 's|^.*(||;s|).*$||' | awk -F "-" '{print $1}'`
       # Get version number from the latest git tag for openstack packages
       [ "$IS_OPENSTACK" == "true" ] && version=`git -C $_srcpath describe --abbrev=0`
-      # TODO: Deal with openstack RC tags like 2015.1.0rc1
-      # It breaks debian version comparison. Need to replace 'rc' with '~rc'
+      # Deal with PyPi versions like 2015.1.0rc1
+      # It breaks version comparison
+      # Change it to 2015.1.0~rc1
+      local convert_version_py="$(dirname $(readlink -e $0))/convert-version.py"
+      version=$(python ${convert_version_py} --tag ${version})
+
       local binpackagenames="`cat ${_debianpath}/debian/control | grep ^Package | cut -d' ' -f 2 | tr '\n' ' '`"
       local epochnumber=`head -1 ${_debianpath}/debian/changelog | grep -o "(.:" | sed 's|(||'`
       local distro=`head -1 ${_debianpath}/debian/changelog | awk -F'[ ;]' '{print $3}'`
diff --git a/perestroika/build-rpm.sh b/perestroika/build-rpm.sh
index 67db7bd..4a2b26e 100755
--- a/perestroika/build-rpm.sh
+++ b/perestroika/build-rpm.sh
@@ -39,8 +39,12 @@ This package provides the %{-n*} kernel modules
   if [ "$IS_OPENSTACK" == "true" ] ; then
       # Get version number from the latest git tag for openstack packages
       local version=`git -C $_srcpath describe --abbrev=0`
-      # TODO: Deal with openstack RC tags like 2015.1.0rc1
-      # It breaks rpm version comparison.
+      # Deal with PyPi versions like 2015.1.0rc1
+      # It breaks version comparison
+      # Change it to 2015.1.0~rc1
+      local convert_version_py="$(dirname $(readlink -e $0))/convert-version.py"
+      version=$(python ${convert_version_py} --tag ${version})
+
       # Get revision number as commit count for src+spec projects
       local _src_commit_count=`git -C $_srcpath rev-list --no-merges origin/${SOURCE_BRANCH} | wc -l`
       local _spec_commit_count=`git -C $_specpath rev-list --no-merges origin/${SPEC_BRANCH} | wc -l`
diff --git a/perestroika/convert-version.py b/perestroika/convert-version.py
new file mode 100755
index 0000000..2848ab7
--- /dev/null
+++ b/perestroika/convert-version.py
@@ -0,0 +1,72 @@
+#!/usr/bin/env python
+
+##
+# Convert pip style alpha/beta/rc/dev versions to the ones suitable for a
+# package manager.
+# Does not modify the conventional 3-digit version numbers.
+# Examples:
+#    1.2.3.0a4 -> 1.2.3~a4
+#    1.2.3rc1 -> 1.2.3~rc1
+#    1.2.3 -> 1.2.3
+
+import argparse
+from pkg_resources import parse_version
+import re
+
+
+def strip_leading_zeros(s):
+    return re.sub(r"^0+([0-9]+)", r"\1", s)
+
+
+def main():
+    parser = argparse.ArgumentParser()
+    parser.add_argument(
+        '-t', '--tag', dest='tag', action='store', type=str,
+        help='PyPi version tag', required=True, default='0'
+    )
+
+    params, other_params = parser.parse_known_args()
+
+    pip_ver = params.tag
+    # drop dashed part from version string because
+    # it represents a patch level of given version
+    pip_ver = pip_ver.split('-')[0]
+
+    # add leading 1 if tag is starting from letter
+    if re.match(r"^[a-zA-Z]", pip_ver):
+        pip_ver = '1' + pip_ver
+
+    # parse_version converts string '12.0.0.0rc1'
+    # to touple ('00000012', '*c', '00000001', '*final')
+    # details:
+    #     http://galaxy-dist.readthedocs.org/en/latest/lib/pkg_resources.html
+    pip_ver_parts = parse_version(pip_ver)
+
+    _ver = True
+    pkg_ver_part = []
+    pkg_alpha = ""
+    pkg_rev_part = []
+    for part in pip_ver_parts:
+        if part == "*final":
+            continue
+        if re.match(r"[*a-z]", part):
+            _ver = False
+            pkg_alpha = re.sub(r"^\*", "~", part)
+            continue
+        if _ver:
+            pkg_ver_part.append(strip_leading_zeros(part))
+        else:
+            pkg_rev_part.append(strip_leading_zeros(part))
+
+    # replace 'c' and '@' with 'rc' and 'dev' at pkg_alpha
+    pkg_alpha = pkg_alpha.replace('c', 'rc')
+    pkg_alpha = pkg_alpha.replace('@', 'dev')
+
+    # expand version to three items
+    while (len(pkg_ver_part) < 3):
+        pkg_ver_part.append('0')
+
+    print('.'.join(pkg_ver_part) + pkg_alpha + '.'.join(pkg_rev_part))
+
+if __name__ == "__main__":
+        main()