diff --git a/crates/engine/src/transaction/error.rs b/crates/engine/src/transaction/error.rs
index e524dfcbd6..dfe017d97f 100644
--- a/crates/engine/src/transaction/error.rs
+++ b/crates/engine/src/transaction/error.rs
@@ -45,6 +45,8 @@ pub enum TransactionError {
     InvariantError { details: String },
     #[error("Load template error: {0}")]
     LoadTemplate(#[from] TemplateLoaderError),
+    #[error("WASM binary too big! {size} bytes are greater than allowed maximum {max} bytes.")]
+    WasmBinaryTooBig { size: usize, max: usize },
     #[error("Template provider error: {0}")]
     TemplateProvider(String),
     #[error("Converting to hash error: {0}")]
diff --git a/crates/engine/src/transaction/processor.rs b/crates/engine/src/transaction/processor.rs
index ea3e7667e6..f9c12dd656 100644
--- a/crates/engine/src/transaction/processor.rs
+++ b/crates/engine/src/transaction/processor.rs
@@ -30,6 +30,7 @@ use tari_engine_types::{
     entity_id_provider::EntityIdProvider,
     indexed_value::{IndexedValue, IndexedWellKnownTypes},
     instruction_result::InstructionResult,
+    limits,
     lock::LockFlag,
     virtual_substate::VirtualSubstates,
 };
@@ -449,6 +450,15 @@ impl<TTemplateProvider: TemplateProvider<Template = LoadedTemplate> + 'static> T
 
     /// Load, validate template binary and adds it to TemplateProvider.
     fn publish_template(runtime: &Runtime, binary: TemplateBlob) -> Result<InstructionResult, TransactionError> {
+        if binary.len() > limits::ENGINE_LIMITS.max_template_binary_size_bytes {
+            // Technically, not possible, but this check is kept in to make a test pass, and potentially for additional
+            // safety.
+            return Err(TransactionError::WasmBinaryTooBig {
+                size: binary.len(),
+                max: limits::ENGINE_LIMITS.max_template_binary_size_bytes,
+            });
+        }
+
         // validate binary
         WasmModule::load_template_from_code(&binary)?;
         // creating new substate
diff --git a/crates/engine/tests/publish_template.rs b/crates/engine/tests/publish_template.rs
index 9bf018f789..9c7e86c739 100644
--- a/crates/engine/tests/publish_template.rs
+++ b/crates/engine/tests/publish_template.rs
@@ -4,15 +4,16 @@
 use std::iter;
 
 use rand::random;
-use tari_engine::wasm::compile::compile_template;
+use tari_engine::{transaction::TransactionError, wasm::compile::compile_template};
 use tari_engine_types::{
     commit_result::{RejectReason, TransactionResult},
     hashing::{hash_template_code, hasher32, EngineHashDomainLabel},
+    limits,
     published_template::PublishedTemplateAddress,
     substate::{SubstateId, SubstateValue},
 };
-use tari_template_test_tooling::TemplateTest;
-use tari_transaction::Transaction;
+use tari_template_test_tooling::{support::assert_error::assert_reject_reason, TemplateTest};
+use tari_transaction::{TemplateBlob, Transaction};
 
 #[test]
 fn publish_template_success() {
@@ -78,27 +79,21 @@ fn publish_template_invalid_binary() {
 fn publish_template_too_big_binary() {
     let mut test = TemplateTest::new(Vec::<String>::new());
     let (account_address, owner_proof, account_key, _) = test.create_custom_funded_account(250_000);
-    let random_wasm_binary = generate_random_binary(6 * 1000 * 1000); // 6 MB
+    let random_wasm_binary = generate_random_binary(limits::ENGINE_LIMITS.max_template_binary_size_bytes + 1);
     let wasm_binary_size = random_wasm_binary.len();
-    let result = test.execute_expect_failure(
+    let reason = test.execute_expect_failure(
         Transaction::builder()
             .fee_transaction_pay_from_component(account_address, 200_000)
-            .publish_template(random_wasm_binary.try_into().unwrap())
+            // SAFETY: We are intentionally publishing an oversized binary to test size limits.
+            .publish_template(unsafe { TemplateBlob::new_unchecked(random_wasm_binary) })
             .build_and_seal(&account_key),
         vec![owner_proof],
     );
 
-    assert!(matches!(result, RejectReason::ExecutionFailure(_)));
-
-    if let RejectReason::ExecutionFailure(error) = result {
-        assert_eq!(
-            error,
-            format!(
-                "WASM binary too big! {} bytes are greater than allowed maximum 5000000 bytes.",
-                wasm_binary_size
-            )
-        );
-    }
+    assert_reject_reason(reason, TransactionError::WasmBinaryTooBig {
+        size: wasm_binary_size,
+        max: limits::ENGINE_LIMITS.max_template_binary_size_bytes,
+    });
 }
 
 fn generate_random_binary(size_in_bytes: usize) -> Vec<u8> {
diff --git a/crates/template_lib_types/src/max_bytes.rs b/crates/template_lib_types/src/max_bytes.rs
index 8e626c85a2..fdb180374b 100644
--- a/crates/template_lib_types/src/max_bytes.rs
+++ b/crates/template_lib_types/src/max_bytes.rs
@@ -32,6 +32,16 @@ impl<const N: usize> MaxBytes<N> {
         }
     }
 
+    /// Constructs a new `MaxBytes<N>` without checking the length of the input.
+    /// This is the only way to break the invariant guarantees of `MaxBytes<N>`.
+    /// NOTE: this exists for testing purposes and should not be used in general.
+    ///
+    /// # Safety
+    /// The caller must ensure that the length of `bytes` is less than or equal to `N`.
+    pub unsafe fn new_unchecked(bytes: impl Into<Box<[u8]>>) -> Self {
+        Self { bytes: bytes.into() }
+    }
+
     pub fn into_vec(self) -> Vec<u8> {
         self.bytes.into_vec()
     }