Can I change the type of a JIRA system field?

We are using the system field environment across all screens. Its a multi-line text field.
Now we have a bunch of projects who would like to have ENVIRONMENT as a dropdown.

Is it possible to change the field type ? Or do we need to create a new custom-field ?

You should create a custom field. I would avoid using the exact name Environment.

The ‘System’ fields cannot be changed or altered unless you want to go modify the source code and rebuild Jira from scratch.

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