diff --git a/CHANGELOG.md b/CHANGELOG.md
index e5d3914..c88fc55 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,13 @@
 All notable changes to the [mlfmu] project will be documented in this file.<br>
 The changelog format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/).
 
+## Unreleased
+
+### Changed
+
+* Generation of modelDescription.xml file to correctly generate tags for each output with 1-indexed indexes and InitialUnknowns tags
+* Generation of modelDescription.xml adds the variables (inputs, parameters and outputs) in the orderer of their valueReference. This is for the indexing to work correctly
+
 ## [1.0.2]
 
 ### Changed
diff --git a/src/mlfmu/utils/fmi_builder.py b/src/mlfmu/utils/fmi_builder.py
index b418f8c..cdb3595 100644
--- a/src/mlfmu/utils/fmi_builder.py
+++ b/src/mlfmu/utils/fmi_builder.py
@@ -76,8 +76,16 @@ def generate_model_description(fmu_model: FmiModel) -> ElementTree:
     # <ModelStructure> tag with <Outputs> tab inside --> Append all outputs
     model_structure = SubElement(root, "ModelStructure")
     outputs = SubElement(model_structure, "Outputs")
+    initial_unknowns = SubElement(model_structure, "InitialUnknowns")
 
-    for var in fmu_model.get_fmi_model_variables():
+    # Get all variables to add them inside the <ModelVariables> tag
+    model_variables = fmu_model.get_fmi_model_variables()
+
+    # The variables needs to be added in the order of their valueReference
+    sorted_model_variables = sorted(model_variables, key=lambda x: x.variable_reference)
+
+    # Add each variable inside the <ModelVariables> tag
+    for var in sorted_model_variables:
         # XML variable attributes
         var_attrs = {
             "name": var.name,
@@ -95,9 +103,13 @@ def generate_model_description(fmu_model: FmiModel) -> ElementTree:
         # FMI variable type element
         _ = SubElement(var_elem, var.type.value.capitalize(), var_type_attrs)
 
-        # Appending output to <Outputs> inside <ModelStructure>
+        # Adding outputs inside <ModelStructure>
         if var.causality == FmiCausality.OUTPUT:
-            _ = SubElement(outputs, "Unknown", {"index": str(var.variable_reference)})
+            # Index is 1-indexed for <Unknown> tag
+            unknown_attributes = {"index": str(var.variable_reference + 1)}
+            # For each output create an <Unknown> tag inside both <Outputs> and <InitialUnknowns>
+            _ = SubElement(outputs, "Unknown", unknown_attributes)
+            _ = SubElement(initial_unknowns, "Unknown", unknown_attributes)
 
     # Create XML tree containing root element and pretty format its contents
     xml_tree = ElementTree(root)
diff --git a/tests/utils/test_modelDescription_builder.py b/tests/utils/test_modelDescription_builder.py
index 7af8308..2ba348f 100644
--- a/tests/utils/test_modelDescription_builder.py
+++ b/tests/utils/test_modelDescription_builder.py
@@ -56,13 +56,14 @@ def test_generate_model_description_with_internal_state_params():
     variables = xml_structure.findall(".//ScalarVariable")
 
     assert xml_structure.getroot().tag == "fmiModelDescription"
-    assert variables[0].attrib["name"] == "state1"
-    assert variables[0].attrib["causality"] == "parameter"
-    assert variables[0][0].tag == "Real"
-    assert variables[0][0].attrib["start"] == "0.0"
 
-    assert variables[1].attrib["name"] == "output1"
-    assert variables[1].attrib["causality"] == "output"
+    assert variables[0].attrib["name"] == "output1"
+    assert variables[0].attrib["causality"] == "output"
+
+    assert variables[1].attrib["name"] == "state1"
+    assert variables[1].attrib["causality"] == "parameter"
+    assert variables[1][0].tag == "Real"
+    assert variables[1][0].attrib["start"] == "0.0"
 
 
 def test_generate_vector_ports():
@@ -193,5 +194,6 @@ def test_generate_model_description_output():
     output_variables = [var for var in variables if var.attrib.get("causality") == "output"]
     outputs_registered = xml_structure.findall(".//Outputs/Unknown")
 
-    assert output_variables[0].attrib["valueReference"] == outputs_registered[0].attrib["index"]
-    assert output_variables[1].attrib["valueReference"] == outputs_registered[1].attrib["index"]
+    # The index should be the valueReference + 1
+    assert int(output_variables[0].attrib["valueReference"]) + 1 == int(outputs_registered[0].attrib["index"])
+    assert int(output_variables[1].attrib["valueReference"]) + 1 == int(outputs_registered[1].attrib["index"])