diff --git a/aws_lambda_powertools/tracing/base.py b/aws_lambda_powertools/tracing/base.py
index 6ea58da6b5a..74b146ad6e8 100644
--- a/aws_lambda_powertools/tracing/base.py
+++ b/aws_lambda_powertools/tracing/base.py
@@ -1,15 +1,19 @@
+from __future__ import annotations
+
 import abc
-import numbers
-import traceback
 from contextlib import contextmanager
-from typing import Any, Generator, List, Optional, Sequence, Union
+from typing import TYPE_CHECKING, Any, Generator, Sequence
+
+if TYPE_CHECKING:
+    import numbers
+    import traceback
 
 
 class BaseSegment(abc.ABC):
     """Holds common properties and methods on segment and subsegment."""
 
     @abc.abstractmethod
-    def close(self, end_time: Optional[int] = None):
+    def close(self, end_time: int | None = None):
         """Close the trace entity by setting `end_time`
         and flip the in progress flag to False.
 
@@ -28,7 +32,7 @@ def remove_subsegment(self, subsegment: Any):
         """Remove input subsegment from child subsegments."""
 
     @abc.abstractmethod
-    def put_annotation(self, key: str, value: Union[str, numbers.Number, bool]) -> None:
+    def put_annotation(self, key: str, value: str | numbers.Number | bool) -> None:
         """Annotate segment or subsegment with a key-value pair.
 
         Note: Annotations will be indexed for later search query.
@@ -37,7 +41,7 @@ def put_annotation(self, key: str, value: Union[str, numbers.Number, bool]) -> N
         ----------
         key: str
             Metadata key
-        value: Union[str, numbers.Number, bool]
+        value: str | numbers.Number | bool
             Annotation value
         """
 
@@ -52,19 +56,19 @@ def put_metadata(self, key: str, value: Any, namespace: str = "default") -> None
             Metadata key
         value: Any
             Any object that can be serialized into a JSON string
-        namespace: Set[str]
+        namespace: set[str]
             Metadata namespace, by default 'default'
         """
 
     @abc.abstractmethod
-    def add_exception(self, exception: BaseException, stack: List[traceback.StackSummary], remote: bool = False):
+    def add_exception(self, exception: BaseException, stack: list[traceback.StackSummary], remote: bool = False):
         """Add an exception to trace entities.
 
         Parameters
         ----------
         exception: Exception
             Caught exception
-        stack: List[traceback.StackSummary]
+        stack: list[traceback.StackSummary]
             List of traceback summaries
 
             Output from `traceback.extract_stack()`.
@@ -83,7 +87,7 @@ def in_subsegment(self, name=None, **kwargs) -> Generator[BaseSegment, None, Non
         ----------
         name: str
             Subsegment name
-        kwargs: Optional[dict]
+        kwargs: dict | None
             Optional parameters to be propagated to segment
         """
 
@@ -96,12 +100,12 @@ def in_subsegment_async(self, name=None, **kwargs) -> Generator[BaseSegment, Non
         ----------
         name: str
             Subsegment name
-        kwargs: Optional[dict]
+        kwargs: dict | None
             Optional parameters to be propagated to segment
         """
 
     @abc.abstractmethod
-    def put_annotation(self, key: str, value: Union[str, numbers.Number, bool]) -> None:
+    def put_annotation(self, key: str, value: str | numbers.Number | bool) -> None:
         """Annotate current active trace entity with a key-value pair.
 
         Note: Annotations will be indexed for later search query.
@@ -110,7 +114,7 @@ def put_annotation(self, key: str, value: Union[str, numbers.Number, bool]) -> N
         ----------
         key: str
             Metadata key
-        value: Union[str, numbers.Number, bool]
+        value: str | numbers.Number | bool
             Annotation value
         """
 
@@ -126,7 +130,7 @@ def put_metadata(self, key: str, value: Any, namespace: str = "default") -> None
             Metadata key
         value: Any
             Any object that can be serialized into a JSON string
-        namespace: Set[str]
+        namespace: set[str]
             Metadata namespace, by default 'default'
         """
 
@@ -136,7 +140,7 @@ def patch(self, modules: Sequence[str]) -> None:
 
         Parameters
         ----------
-        modules: Set[str]
+        modules: set[str]
             Set of modules to be patched
         """
 
diff --git a/aws_lambda_powertools/tracing/tracer.py b/aws_lambda_powertools/tracing/tracer.py
index a79ac4ec738..0e2bbeb4a3e 100644
--- a/aws_lambda_powertools/tracing/tracer.py
+++ b/aws_lambda_powertools/tracing/tracer.py
@@ -1,11 +1,12 @@
+from __future__ import annotations
+
 import contextlib
 import copy
 import functools
 import inspect
 import logging
-import numbers
 import os
-from typing import Any, Callable, Dict, List, Optional, Sequence, Union, cast, overload
+from typing import TYPE_CHECKING, Any, Callable, Sequence, cast, overload
 
 from aws_lambda_powertools.shared import constants
 from aws_lambda_powertools.shared.functions import (
@@ -15,7 +16,11 @@
 )
 from aws_lambda_powertools.shared.lazy_import import LazyLoader
 from aws_lambda_powertools.shared.types import AnyCallableT
-from aws_lambda_powertools.tracing.base import BaseProvider, BaseSegment
+
+if TYPE_CHECKING:
+    import numbers
+
+    from aws_lambda_powertools.tracing.base import BaseProvider, BaseSegment
 
 is_cold_start = True
 logger = logging.getLogger(__name__)
@@ -57,7 +62,7 @@ class Tracer:
     disabled: bool
         Flag to explicitly disable tracing, useful when running/testing locally
         `Env POWERTOOLS_TRACE_DISABLED="true"`
-    patch_modules: Optional[Sequence[str]]
+    patch_modules: Sequence[str] | None
         Tuple of modules supported by tracing provider to patch, by default all modules are patched
     provider: BaseProvider
         Tracing provider, by default it is aws_xray_sdk.core.xray_recorder
@@ -75,13 +80,13 @@ class Tracer:
         tracer = Tracer(service="greeting")
 
         @tracer.capture_method
-        def greeting(name: str) -> Dict:
+        def greeting(name: str) -> dict:
             return {
                 "name": name
             }
 
         @tracer.capture_lambda_handler
-        def handler(event: dict, context: Any) -> Dict:
+        def handler(event: dict, context: Any) -> dict:
             print("Received event from Lambda...")
             response = greeting(name="Heitor")
             return response
@@ -92,7 +97,7 @@ def handler(event: dict, context: Any) -> Dict:
         tracer = Tracer(service="booking")
 
         @tracer.capture_method
-        def confirm_booking(booking_id: str) -> Dict:
+        def confirm_booking(booking_id: str) -> dict:
                 resp = add_confirmation(booking_id)
 
                 tracer.put_annotation("BookingConfirmation", resp["requestId"])
@@ -101,7 +106,7 @@ def confirm_booking(booking_id: str) -> Dict:
                 return resp
 
         @tracer.capture_lambda_handler
-        def handler(event: dict, context: Any) -> Dict:
+        def handler(event: dict, context: Any) -> dict:
             print("Received event from Lambda...")
             booking_id = event.get("booking_id")
             response = confirm_booking(booking_id=booking_id)
@@ -114,7 +119,7 @@ def handler(event: dict, context: Any) -> Dict:
         tracer = Tracer()
 
         @tracer.capture_lambda_handler
-        def handler(event: dict, context: Any) -> Dict:
+        def handler(event: dict, context: Any) -> dict:
             print("Received event from Lambda...")
             response = greeting(name="Lessa")
             return response
@@ -126,7 +131,7 @@ def handler(event: dict, context: Any) -> Dict:
         tracer = Tracer()
 
         @tracer.capture_lambda_handler
-        def handler(event: dict, context: Any) -> Dict:
+        def handler(event: dict, context: Any) -> dict:
             ...
 
         # utils.py
@@ -139,7 +144,7 @@ def handler(event: dict, context: Any) -> Dict:
     * Async handler not supported
     """
 
-    _default_config: Dict[str, Any] = {
+    _default_config: dict[str, Any] = {
         "service": "",
         "disabled": False,
         "auto_patch": True,
@@ -150,11 +155,11 @@ def handler(event: dict, context: Any) -> Dict:
 
     def __init__(
         self,
-        service: Optional[str] = None,
-        disabled: Optional[bool] = None,
-        auto_patch: Optional[bool] = None,
-        patch_modules: Optional[Sequence[str]] = None,
-        provider: Optional[BaseProvider] = None,
+        service: str | None = None,
+        disabled: bool | None = None,
+        auto_patch: bool | None = None,
+        patch_modules: Sequence[str] | None = None,
+        provider: BaseProvider | None = None,
     ):
         self.__build_config(
             service=service,
@@ -177,14 +182,14 @@ def __init__(
         if self._is_xray_provider():
             self._disable_xray_trace_batching()
 
-    def put_annotation(self, key: str, value: Union[str, numbers.Number, bool]):
+    def put_annotation(self, key: str, value: str | numbers.Number | bool):
         """Adds annotation to existing segment or subsegment
 
         Parameters
         ----------
         key : str
             Annotation key
-        value : Union[str, numbers.Number, bool]
+        value : str | numbers.Number | bool
             Value for annotation
 
         Example
@@ -201,7 +206,7 @@ def put_annotation(self, key: str, value: Union[str, numbers.Number, bool]):
         logger.debug(f"Annotating on key '{key}' with '{value}'")
         self.provider.put_annotation(key=key, value=value)
 
-    def put_metadata(self, key: str, value: Any, namespace: Optional[str] = None):
+    def put_metadata(self, key: str, value: Any, namespace: str | None = None):
         """Adds metadata to existing segment or subsegment
 
         Parameters
@@ -229,14 +234,14 @@ def put_metadata(self, key: str, value: Any, namespace: Optional[str] = None):
         logger.debug(f"Adding metadata on key '{key}' with '{value}' at namespace '{namespace}'")
         self.provider.put_metadata(key=key, value=value, namespace=namespace)
 
-    def patch(self, modules: Optional[Sequence[str]] = None):
+    def patch(self, modules: Sequence[str] | None = None):
         """Patch modules for instrumentation.
 
         Patches all supported modules by default if none are given.
 
         Parameters
         ----------
-        modules : Optional[Sequence[str]]
+        modules : Sequence[str] | None
             List of modules to be patched, optional by default
         """
         if self.disabled:
@@ -250,9 +255,9 @@ def patch(self, modules: Optional[Sequence[str]] = None):
 
     def capture_lambda_handler(
         self,
-        lambda_handler: Union[Callable[[Dict, Any], Any], Optional[Callable[[Dict, Any, Optional[Dict]], Any]]] = None,
-        capture_response: Optional[bool] = None,
-        capture_error: Optional[bool] = None,
+        lambda_handler: Callable[[dict, Any], Any] | Callable[[dict, Any, dict | None], Any] | None = None,
+        capture_response: bool | None = None,
+        capture_error: bool | None = None,
     ):
         """Decorator to create subsegment for lambda handlers
 
@@ -349,21 +354,21 @@ def decorate(event, context, **kwargs):
 
     # see #465
     @overload
-    def capture_method(self, method: "AnyCallableT") -> "AnyCallableT": ...  # pragma: no cover
+    def capture_method(self, method: AnyCallableT) -> AnyCallableT: ...  # pragma: no cover
 
     @overload
     def capture_method(
         self,
         method: None = None,
-        capture_response: Optional[bool] = None,
-        capture_error: Optional[bool] = None,
-    ) -> Callable[["AnyCallableT"], "AnyCallableT"]: ...  # pragma: no cover
+        capture_response: bool | None = None,
+        capture_error: bool | None = None,
+    ) -> Callable[[AnyCallableT], AnyCallableT]: ...  # pragma: no cover
 
     def capture_method(
         self,
-        method: Optional[AnyCallableT] = None,
-        capture_response: Optional[bool] = None,
-        capture_error: Optional[bool] = None,
+        method: AnyCallableT | None = None,
+        capture_response: bool | None = None,
+        capture_error: bool | None = None,
     ) -> AnyCallableT:
         """Decorator to create subsegment for arbitrary functions
 
@@ -402,7 +407,7 @@ def some_function()
             tracer = Tracer(service="booking")
 
             @tracer.capture_method
-            async def confirm_booking(booking_id: str) -> Dict:
+            async def confirm_booking(booking_id: str) -> dict:
                 resp = call_to_booking_service()
 
                 tracer.put_annotation("BookingConfirmation", resp["requestId"])
@@ -410,7 +415,7 @@ async def confirm_booking(booking_id: str) -> Dict:
 
                 return resp
 
-            def lambda_handler(event: dict, context: Any) -> Dict:
+            def lambda_handler(event: dict, context: Any) -> dict:
                 booking_id = event.get("booking_id")
                 asyncio.run(confirm_booking(booking_id=booking_id))
 
@@ -425,7 +430,7 @@ def bookings_generator(booking_id):
                 yield resp[0]
                 yield resp[1]
 
-            def lambda_handler(event: dict, context: Any) -> Dict:
+            def lambda_handler(event: dict, context: Any) -> dict:
                 gen = bookings_generator(booking_id=booking_id)
                 result = list(gen)
 
@@ -441,7 +446,7 @@ def booking_actions(booking_id):
                 yield "example result"
                 cleanup_stuff()
 
-            def lambda_handler(event: dict, context: Any) -> Dict:
+            def lambda_handler(event: dict, context: Any) -> dict:
                 booking_id = event.get("booking_id")
 
                 with booking_actions(booking_id=booking_id) as booking:
@@ -569,9 +574,9 @@ async def async_tasks():
     def _decorate_async_function(
         self,
         method: Callable,
-        capture_response: Optional[Union[bool, str]] = None,
-        capture_error: Optional[Union[bool, str]] = None,
-        method_name: Optional[str] = None,
+        capture_response: bool | str | None = None,
+        capture_error: bool | str | None = None,
+        method_name: str | None = None,
     ):
         @functools.wraps(method)
         async def decorate(*args, **kwargs):
@@ -602,9 +607,9 @@ async def decorate(*args, **kwargs):
     def _decorate_generator_function(
         self,
         method: Callable,
-        capture_response: Optional[Union[bool, str]] = None,
-        capture_error: Optional[Union[bool, str]] = None,
-        method_name: Optional[str] = None,
+        capture_response: bool | str | None = None,
+        capture_error: bool | str | None = None,
+        method_name: str | None = None,
     ):
         @functools.wraps(method)
         def decorate(*args, **kwargs):
@@ -635,9 +640,9 @@ def decorate(*args, **kwargs):
     def _decorate_generator_function_with_context_manager(
         self,
         method: Callable,
-        capture_response: Optional[Union[bool, str]] = None,
-        capture_error: Optional[Union[bool, str]] = None,
-        method_name: Optional[str] = None,
+        capture_response: bool | str | None = None,
+        capture_error: bool | str | None = None,
+        method_name: str | None = None,
     ):
         @functools.wraps(method)
         @contextlib.contextmanager
@@ -669,9 +674,9 @@ def decorate(*args, **kwargs):
     def _decorate_sync_function(
         self,
         method: AnyCallableT,
-        capture_response: Optional[Union[bool, str]] = None,
-        capture_error: Optional[Union[bool, str]] = None,
-        method_name: Optional[str] = None,
+        capture_response: bool | str | None = None,
+        capture_error: bool | str | None = None,
+        method_name: str | None = None,
     ) -> AnyCallableT:
         @functools.wraps(method)
         def decorate(*args, **kwargs):
@@ -701,10 +706,10 @@ def decorate(*args, **kwargs):
 
     def _add_response_as_metadata(
         self,
-        method_name: Optional[str] = None,
-        data: Optional[Any] = None,
-        subsegment: Optional[BaseSegment] = None,
-        capture_response: Optional[Union[bool, str]] = None,
+        method_name: str | None = None,
+        data: Any | None = None,
+        subsegment: BaseSegment | None = None,
+        capture_response: bool | str | None = None,
     ):
         """Add response as metadata for given subsegment
 
@@ -729,7 +734,7 @@ def _add_full_exception_as_metadata(
         method_name: str,
         error: Exception,
         subsegment: BaseSegment,
-        capture_error: Optional[bool] = None,
+        capture_error: bool | None = None,
     ):
         """Add full exception object as metadata for given subsegment
 
@@ -756,7 +761,7 @@ def _disable_tracer_provider():
         aws_xray_sdk.global_sdk_config.set_sdk_enabled(False)
 
     @staticmethod
-    def _is_tracer_disabled() -> Union[bool, str]:
+    def _is_tracer_disabled() -> bool | str:
         """Detects whether trace has been disabled
 
         Tracing is automatically disabled in the following conditions:
@@ -767,7 +772,7 @@ def _is_tracer_disabled() -> Union[bool, str]:
 
         Returns
         -------
-        Union[bool, str]
+        bool | str
         """
         logger.debug("Verifying whether Tracing has been disabled")
         is_lambda_env = os.getenv(constants.LAMBDA_TASK_ROOT_ENV)
@@ -787,11 +792,11 @@ def _is_tracer_disabled() -> Union[bool, str]:
 
     def __build_config(
         self,
-        service: Optional[str] = None,
-        disabled: Optional[bool] = None,
-        auto_patch: Optional[bool] = None,
-        patch_modules: Optional[Sequence[str]] = None,
-        provider: Optional[BaseProvider] = None,
+        service: str | None = None,
+        disabled: bool | None = None,
+        auto_patch: bool | None = None,
+        patch_modules: Sequence[str] | None = None,
+        provider: BaseProvider | None = None,
     ):
         """Populates Tracer config for new and existing initializations"""
         is_disabled = disabled if disabled is not None else self._is_tracer_disabled()
@@ -833,7 +838,7 @@ def _disable_xray_trace_batching(self):
     def _is_xray_provider(self):
         return "aws_xray_sdk" in self.provider.__module__
 
-    def ignore_endpoint(self, hostname: Optional[str] = None, urls: Optional[List[str]] = None):
+    def ignore_endpoint(self, hostname: str | None = None, urls: list[str] | None = None):
         """If you want to ignore certain httplib requests you can do so based on the hostname or URL that is being
         requested.
 
@@ -847,7 +852,7 @@ def ignore_endpoint(self, hostname: Optional[str] = None, urls: Optional[List[st
         ----------
         hostname : Optional, str
             The hostname is matched using the Python fnmatch library which does Unix glob style matching.
-        urls: Optional, List[str]
+        urls: Optional, list[str]
             List of urls to ignore. Example `tracer.ignore_endpoint(urls=["/ignored-url"])`
         """
         if not self._is_xray_provider():
diff --git a/tests/e2e/parser/handlers/handler_with_union_tag.py b/tests/e2e/parser/handlers/handler_with_union_tag.py
index 9dbc81662b4..5240a902db0 100644
--- a/tests/e2e/parser/handlers/handler_with_union_tag.py
+++ b/tests/e2e/parser/handlers/handler_with_union_tag.py
@@ -1,6 +1,6 @@
 from __future__ import annotations
 
-from typing import Literal
+from typing import Literal, Union
 
 from pydantic import BaseModel, Field
 from typing_extensions import Annotated
@@ -25,7 +25,7 @@ class PartialFailureCallback(BaseModel):
     error_msg: str
 
 
-OrderCallback = Annotated[SuccessCallback | ErrorCallback | PartialFailureCallback, Field(discriminator="status")]
+OrderCallback = Annotated[Union[SuccessCallback, ErrorCallback, PartialFailureCallback], Field(discriminator="status")]
 
 
 @event_parser