diff --git a/dvc/utils/hydra.py b/dvc/utils/hydra.py
index 793d9664f..274ae2fd0 100644
--- a/dvc/utils/hydra.py
+++ b/dvc/utils/hydra.py
@@ -54,8 +54,12 @@ def compose_and_dump(
     with initialize_config_dir(config_dir, version_base=None):
         cfg = compose(config_name=config_name, overrides=overrides)
 
-    dumper = DUMPERS[Path(output_file).suffix.lower()]
-    dumper(output_file, OmegaConf.to_object(cfg))
+    suffix = Path(output_file).suffix.lower()
+    if suffix not in [".yml", ".yaml"]:
+        dumper = DUMPERS[suffix]
+        dumper(output_file, OmegaConf.to_object(cfg))
+    else:
+        Path(output_file).write_text(OmegaConf.to_yaml(cfg), encoding="utf-8")
 
 
 def apply_overrides(path: "StrPath", overrides: List[str]) -> None:
diff --git a/tests/func/utils/test_hydra.py b/tests/func/utils/test_hydra.py
index 8338e3cbe..cfde109a6 100644
--- a/tests/func/utils/test_hydra.py
+++ b/tests/func/utils/test_hydra.py
@@ -174,12 +174,25 @@ def test_compose_and_dump(tmp_dir, suffix, overrides, expected):
     from dvc.utils.hydra import compose_and_dump
 
     config_name = "config"
-    config_dir = hydra_setup(tmp_dir, "conf", "config")
     output_file = tmp_dir / f"params.{suffix}"
+    config_dir = hydra_setup(tmp_dir, "conf", "config")
     compose_and_dump(output_file, config_dir, config_name, overrides)
     assert output_file.parse() == expected
 
 
+@pytest.mark.skipif(sys.version_info >= (3, 11), reason="unsupported on 3.11")
+def test_compose_and_dump_yaml_handles_string(tmp_dir):
+    """Regression test for 8583"""
+    from dvc.utils.hydra import compose_and_dump
+
+    config = tmp_dir / "conf" / "config.yaml"
+    config.parent.mkdir()
+    config.write_text("foo: 'no'\n")
+    output_file = tmp_dir / "params.yaml"
+    compose_and_dump(output_file, str(config.parent), "config", [])
+    assert output_file.read_text() == "foo: 'no'\n"
+
+
 @pytest.mark.parametrize(
     "overrides, expected",
     [