diff --git a/pkg/cel/exception/compiler.go b/pkg/cel/exception/compiler.go
new file mode 100644
index 0000000000..5aa6f09045
--- /dev/null
+++ b/pkg/cel/exception/compiler.go
@@ -0,0 +1,58 @@
+package exception
+
+import (
+	"fmt"
+
+	"github.com/google/cel-go/cel"
+	"github.com/google/cel-go/common/types"
+	kyvernov2alpha1 "github.com/kyverno/kyverno/api/kyverno/v2alpha1"
+	engine "github.com/kyverno/kyverno/pkg/cel"
+	policy "github.com/kyverno/kyverno/pkg/cel/policy"
+	"k8s.io/apimachinery/pkg/util/validation/field"
+)
+
+type Compiler interface {
+	Compile(*kyvernov2alpha1.CELPolicyException) (*CompiledException, field.ErrorList)
+}
+
+func NewCompiler() Compiler {
+	return &compiler{}
+}
+
+type compiler struct{}
+
+func (c *compiler) Compile(exception *kyvernov2alpha1.CELPolicyException) (*CompiledException, field.ErrorList) {
+	var allErrs field.ErrorList
+	base, err := engine.NewEnv()
+	if err != nil {
+		return nil, append(allErrs, field.InternalError(nil, err))
+	}
+	options := []cel.EnvOption{
+		cel.Variable(policy.ObjectKey, cel.DynType),
+	}
+	env, err := base.Extend(options...)
+	if err != nil {
+		return nil, append(allErrs, field.InternalError(nil, err))
+	}
+	path := field.NewPath("spec.matchConditions")
+	matchConditions := make([]cel.Program, 0, len(exception.Spec.MatchConditions))
+	for i, matchCondition := range exception.Spec.MatchConditions {
+		path := path.Index(i).Child("expression")
+		ast, issues := env.Compile(matchCondition.Expression)
+		if err := issues.Err(); err != nil {
+			return nil, append(allErrs, field.Invalid(path, matchCondition.Expression, err.Error()))
+		}
+		if !ast.OutputType().IsExactType(types.BoolType) {
+			msg := fmt.Sprintf("output is expected to be of type %s", types.BoolType.TypeName())
+			return nil, append(allErrs, field.Invalid(path, matchCondition.Expression, msg))
+		}
+		prog, err := env.Program(ast)
+		if err != nil {
+			return nil, append(allErrs, field.Invalid(path, matchCondition.Expression, err.Error()))
+		}
+		matchConditions = append(matchConditions, prog)
+	}
+	return &CompiledException{
+		matchConditions: matchConditions,
+	}, nil
+}
diff --git a/pkg/cel/exception/compiler_test.go b/pkg/cel/exception/compiler_test.go
new file mode 100644
index 0000000000..9d2549b4ff
--- /dev/null
+++ b/pkg/cel/exception/compiler_test.go
@@ -0,0 +1,51 @@
+package exception
+
+import (
+	"testing"
+
+	kyvernov2alpha1 "github.com/kyverno/kyverno/api/kyverno/v2alpha1"
+	"github.com/stretchr/testify/assert"
+	admissionregistrationv1 "k8s.io/api/admissionregistration/v1"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+)
+
+func Test_compiler_Compile(t *testing.T) {
+	tests := []struct {
+		name      string
+		exception *kyvernov2alpha1.CELPolicyException
+		wantErr   bool
+	}{
+		{
+			name: "simple",
+			exception: &kyvernov2alpha1.CELPolicyException{
+				TypeMeta: metav1.TypeMeta{
+					APIVersion: kyvernov2alpha1.GroupVersion.String(),
+					Kind:       "CELPolicyException",
+				},
+				ObjectMeta: metav1.ObjectMeta{
+					Name: "exception",
+				},
+				Spec: kyvernov2alpha1.CELPolicyExceptionSpec{
+					MatchConditions: []admissionregistrationv1.MatchCondition{
+						{
+							Name:       "check env label",
+							Expression: "has(object.metadata.labels) && 'env' in object.metadata.labels && object.metadata.labels['env'] == 'prod'",
+						},
+					},
+				},
+			},
+		},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			c := NewCompiler()
+			compiled, errs := c.Compile(tt.exception)
+			if tt.wantErr {
+				assert.Error(t, errs.ToAggregate())
+			} else {
+				assert.NoError(t, errs.ToAggregate())
+				assert.NotNil(t, compiled)
+			}
+		})
+	}
+}
diff --git a/pkg/cel/exception/exception.go b/pkg/cel/exception/exception.go
new file mode 100644
index 0000000000..f7a1a16a10
--- /dev/null
+++ b/pkg/cel/exception/exception.go
@@ -0,0 +1,9 @@
+package exception
+
+import (
+	"github.com/google/cel-go/cel"
+)
+
+type CompiledException struct {
+	matchConditions []cel.Program
+}