diff --git a/smarts/env/utils/observation_conversion.py b/smarts/env/utils/observation_conversion.py
index 9de20ff3cd..1c8772e5a4 100644
--- a/smarts/env/utils/observation_conversion.py
+++ b/smarts/env/utils/observation_conversion.py
@@ -19,10 +19,12 @@
 # LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,
 # OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN
 # THE SOFTWARE.
+from __future__ import annotations
+
 import math
 import warnings
 from enum import IntEnum
-from functools import cached_property
+from functools import cached_property, partial
 from typing import Any, Callable, Dict, List, Optional, Tuple
 
 import gymnasium as gym
@@ -182,13 +184,34 @@ def _format_signals(signals: List[SignalObservation]):
     }
 
 
-def _format_neighborhood_vehicle_states(
+def _format_neighborhood_vehicle_states_option_lane_position(
     neighborhood_vehicle_states: Tuple[VehicleObservation],
 ):
     des_shp = _NEIGHBOR_SHP
     rcv_shp = len(neighborhood_vehicle_states)
     pad_shp = 0 if des_shp - rcv_shp < 0 else des_shp - rcv_shp
 
+    if rcv_shp == 0:
+        return np.zeros((des_shp, 3), dtype=np.float32)
+
+    lane_positions = [
+        nghb.lane_position for nghb in neighborhood_vehicle_states[:des_shp]
+    ]
+    lane_positions = np.array(lane_positions, dtype=np.float32)
+    lane_positions = np.pad(
+        lane_positions, ((0, pad_shp), (0, 0)), mode="constant", constant_values=0
+    )
+    return lane_positions
+
+
+def _format_neighborhood_vehicle_states(
+    neighborhood_vehicle_states: Tuple[VehicleObservation],
+    agent_interface: Optional[AgentInterface],
+) -> Dict[str, Any]:
+    des_shp = _NEIGHBOR_SHP
+    rcv_shp = len(neighborhood_vehicle_states)
+    pad_shp = 0 if des_shp - rcv_shp < 0 else des_shp - rcv_shp
+
     if rcv_shp == 0:
         return {
             "box": np.zeros((des_shp, 3), dtype=np.float32),
@@ -236,7 +259,7 @@ def _format_neighborhood_vehicle_states(
     interest = np.pad(interest, ((0,pad_shp)), mode="constant", constant_values=False)
     # fmt: on
 
-    return {
+    output = {
         "box": box,
         "heading": heading,
         "id": vehicle_id,
@@ -246,6 +269,44 @@ def _format_neighborhood_vehicle_states(
         "position": pos,
         "speed": speed,
     }
+    if agent_interface is not None and agent_interface.lane_positions:
+        output[
+            "lane_position"
+        ] = _format_neighborhood_vehicle_states_option_lane_position(
+            neighborhood_vehicle_states
+        )
+
+    return output
+
+
+def _configure_neighborhood_vehicle_states_space(agent_interface: AgentInterface):
+    sub_spaces = {
+        "box": gym.spaces.Box(
+            low=0, high=1e10, shape=(_NEIGHBOR_SHP, 3), dtype=np.float32
+        ),
+        "heading": gym.spaces.Box(
+            low=-math.pi, high=math.pi, shape=(_NEIGHBOR_SHP,), dtype=np.float32
+        ),
+        "id": gym.spaces.Tuple(
+            (gym.spaces.Text(_ID_NAME_LIMIT, charset=_WAYPOINT_CHAR_SET),)
+            * _NEIGHBOR_SHP
+        ),
+        "lane_index": gym.spaces.Box(
+            low=0, high=127, shape=(_NEIGHBOR_SHP,), dtype=np.int8
+        ),
+        "position": gym.spaces.Box(
+            low=-1e10, high=1e10, shape=(_NEIGHBOR_SHP, 3), dtype=np.float64
+        ),
+        "speed": gym.spaces.Box(
+            low=0, high=1e10, shape=(_NEIGHBOR_SHP,), dtype=np.float32
+        ),
+        "interest": gym.spaces.MultiBinary(_NEIGHBOR_SHP),
+    }
+    if agent_interface.lane_positions:
+        sub_spaces["lane_position"] = gym.spaces.Box(
+            low=-1e10, high=1e10, shape=(_NEIGHBOR_SHP, 3), dtype=np.float32
+        )
+    return gym.spaces.Dict(sub_spaces)
 
 
 def _format_lidar(
@@ -357,7 +418,9 @@ class StandardConfigurableSpaceFormat(BaseSpaceFormat):
 
     def __init__(
         self,
-        formatting_func: Callable[[Observation], Dict[str, Any]],
+        formatting_func: Callable[
+            [Observation, Optional[AgentInterface]], Dict[str, Any]
+        ],
         active_func: Callable[[AgentInterface], bool],
         name: str,
         space_func: Callable[[AgentInterface], gym.Space],
@@ -372,7 +435,7 @@ def __init__(
 
     def format(self, obs: Observation):
         """Selects and formats the given observation to get a value that matches the :attr:`space`."""
-        return self._formatting_func(obs)
+        return self._formatting_func(obs, self._agent_interface)
 
     def active(self, agent_interface: AgentInterface) -> bool:
         """If this formatting is active and should be included in the output."""
@@ -563,6 +626,13 @@ def __call__(self, agent_interface: AgentInterface) -> BaseSpaceFormat:
     _VEC3_SIGNED_FLOAT32_SPACE,
 )
 
+ego_lane_position_format = StandardSpaceFormat(
+    lambda obs: np.array(obs.ego_vehicle_state.lane_position, dtype=np.float32),
+    lambda agent_interface: bool(agent_interface.lane_positions),
+    "lane_position",
+    _VEC3_SIGNED_FLOAT32_SPACE,
+)
+
 mission_space_format = StandardSpaceFormat(
     lambda obs: _format_mission(obs.ego_vehicle_state.mission),
     lambda _: True,
@@ -673,7 +743,7 @@ def name(self):
 
 
 lidar_point_cloud_space_format = StandardConfigurableSpaceFormat(
-    lambda obs: _format_lidar(obs.lidar_point_cloud),
+    lambda obs, agent_interface: _format_lidar(obs.lidar_point_cloud),
     lambda agent_interface: bool(agent_interface.lidar_point_cloud),
     "lidar_point_cloud",
     # MTA TODO: add lidar configuration
@@ -694,34 +764,11 @@ def name(self):
 )
 
 
-neighborhood_vehicle_states_space_format = StandardSpaceFormat(
+neighborhood_vehicle_states_space_format = StandardConfigurableSpaceFormat(
     lambda obs: _format_neighborhood_vehicle_states(obs.neighborhood_vehicle_states),
     lambda agent_interface: bool(agent_interface.neighborhood_vehicle_states),
     "neighborhood_vehicle_states",
-    gym.spaces.Dict(
-        {
-            "box": gym.spaces.Box(
-                low=0, high=1e10, shape=(_NEIGHBOR_SHP, 3), dtype=np.float32
-            ),
-            "heading": gym.spaces.Box(
-                low=-math.pi, high=math.pi, shape=(_NEIGHBOR_SHP,), dtype=np.float32
-            ),
-            "id": gym.spaces.Tuple(
-                (gym.spaces.Text(_ID_NAME_LIMIT, charset=_WAYPOINT_CHAR_SET),)
-                * _NEIGHBOR_SHP
-            ),
-            "lane_index": gym.spaces.Box(
-                low=0, high=127, shape=(_NEIGHBOR_SHP,), dtype=np.int8
-            ),
-            "position": gym.spaces.Box(
-                low=-1e10, high=1e10, shape=(_NEIGHBOR_SHP, 3), dtype=np.float64
-            ),
-            "speed": gym.spaces.Box(
-                low=0, high=1e10, shape=(_NEIGHBOR_SHP,), dtype=np.float32
-            ),
-            "interest": gym.spaces.MultiBinary(_NEIGHBOR_SHP),
-        }
-    ),
+    _configure_neighborhood_vehicle_states_space,
 )
 
 
@@ -849,6 +896,7 @@ def name(self):
         # optional
         ego_angular_acceleration_space_format,
         ego_angular_jerk_space_format,
+        ego_lane_position_format,
         ego_linear_acceleration_space_format,
         ego_linear_jerk_space_format,
     ],
@@ -966,6 +1014,11 @@ class ObservationSpacesFormatter:
                 "yaw_rate":
                     Rotation speed around vertical axis in rad/s [0, 2pi].
                     dtype=np.float32.
+                "lane_position":
+                    A reference line coordinate. Coordinates are s, t, and h relating
+                    to lane offset along lane, horizontal displacement and surface
+                    displacement.
+                    shape=(3,). dtype=np.float64
             )}
 
             A dictionary of event markers.