diff --git a/apps/governance-service/README.md b/apps/governance-service/README.md
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+# AITBC Governance Service
+
+Manages governance operations.
+
+## Installation
+
+```bash
+cd /opt/aitbc
+poetry install --with governance-service
+```
+
+## Database Setup
+
+Create a separate database for the governance service:
+
+```sql
+CREATE DATABASE aitbc_governance;
+CREATE USER aitbc_governance WITH PASSWORD 'password';
+GRANT ALL PRIVILEGES ON DATABASE aitbc_governance TO aitbc_governance;
+```
+
+## Running
+
+```bash
+# Development
+python -m governance_service.main
+
+# Production (systemd)
+sudo systemctl start governance-service
+sudo systemctl enable governance-service
+```
+
+## Endpoints
+
+- `GET /health` - Health check
+- `GET /governance/status` - Get governance status
+
+## Migration Status
+
+**Foundation Created:**
+- Application structure (pyproject.toml, main.py)
+- Systemd service configuration
+- Basic health and status endpoints
+
+**Remaining:**
+- Extract governance domain models from coordinator-api
+- Extract governance services from coordinator-api
+- Extract governance routers from coordinator-api
+- Setup separate database session management
+- Update coordinator-api to remove governance code
+- End-to-end testing with gateway
+
+## Service Configuration
+
+- Port: 8105
+- Database: aitbc_governance
+- Gateway route: /governance/*
diff --git a/apps/governance-service/governance-service.service b/apps/governance-service/governance-service.service
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+[Unit]
+Description=AITBC Governance Service
+After=network.target postgresql.service
+
+[Service]
+Type=simple
+User=aitbc
+WorkingDirectory=/opt/aitbc/apps/governance-service
+Environment="PATH=/opt/aitbc/venv/bin"
+Environment="PYTHONPATH=/opt/aitbc/packages/py/aitbc-core/src:/opt/aitbc/apps/governance-service/src:/opt/aitbc"
+Environment="DATABASE_URL=postgresql+asyncpg://aitbc_governance:password@localhost:5432/aitbc_governance"
+ExecStart=/opt/aitbc/venv/bin/python -m governance_service.main
+Restart=always
+RestartSec=10
+
+[Install]
+WantedBy=multi-user.target
diff --git a/apps/governance-service/pyproject.toml b/apps/governance-service/pyproject.toml
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+[project]
+name = "governance-service"
+version = "0.1.0"
+description = "AITBC Governance Service for governance operations"
+authors = [
+    {name = "AITBC Team", email = "team@aitbc.dev"}
+]
+requires-python = ">=3.13"
+dependencies = [
+    "fastapi>=0.104.0",
+    "uvicorn>=0.24.0",
+    "sqlmodel>=0.0.14",
+    "asyncpg>=0.30.0",
+    "aitbc-core",
+]
+
+[build-system]
+requires = ["poetry-core"]
+build-backend = "poetry.core.masonry.api"
+
+[tool.poetry]
+packages = [
+    { include = "governance_service", from = "src" }
+]
diff --git a/apps/governance-service/src/governance_service/__init__.py b/apps/governance-service/src/governance_service/__init__.py
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+"""
+AITBC Governance Service
+Manages governance operations
+"""
+
+__version__ = "0.1.0"
diff --git a/apps/governance-service/src/governance_service/main.py b/apps/governance-service/src/governance_service/main.py
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+"""
+Governance Service main application
+Manages governance operations
+"""
+
+from contextlib import asynccontextmanager
+from typing import AsyncIterator
+
+from fastapi import FastAPI
+from pydantic import BaseModel
+
+from aitbc import (
+    configure_logging,
+    get_logger,
+    RequestIDMiddleware,
+    PerformanceLoggingMiddleware,
+    RequestValidationMiddleware,
+    ErrorHandlerMiddleware,
+)
+
+# Configure structured logging
+configure_logging(level="INFO")
+logger = get_logger(__name__)
+
+
+@asynccontextmanager
+async def lifespan(app: FastAPI) -> AsyncIterator[None]:
+    """Lifecycle events for the Governance Service."""
+    logger.info("Starting Governance Service")
+    yield
+    logger.info("Shutting down Governance Service")
+
+
+app = FastAPI(
+    title="AITBC Governance Service",
+    description="Manages governance operations",
+    version="0.1.0",
+    lifespan=lifespan,
+)
+
+# Add middleware
+app.add_middleware(RequestIDMiddleware)
+app.add_middleware(PerformanceLoggingMiddleware)
+app.add_middleware(RequestValidationMiddleware, max_request_size=10*1024*1024)
+app.add_middleware(ErrorHandlerMiddleware)
+
+
+class HealthResponse(BaseModel):
+    """Health check response"""
+    status: str
+    service: str
+
+
+@app.get("/health")
+async def health() -> HealthResponse:
+    """Health check endpoint"""
+    return HealthResponse(status="healthy", service="governance-service")
+
+
+@app.get("/governance/status")
+async def governance_status() -> dict[str, str]:
+    """Get governance status"""
+    return {
+        "status": "operational",
+        "service": "governance-service",
+        "message": "Governance service is running",
+    }
+
+
+if __name__ == "__main__":
+    import uvicorn
+    uvicorn.run(app, host="0.0.0.0", port=8105)