Technical documentation in software projects is significant as it provides a comprehensive resource for understanding software architecture, user interfaces, and APIs. It serves multiple purposes: aiding developers in coding, guiding users in software utilization, and ensuring maintenance and updates are performed efficiently. Well-structured documentation enhances collaboration among team members and facilitates onboarding new employees. Moreover, it helps in meeting regulatory compliance and minimizing transitional knowledge loss. Essentially, effective technical documentation contributes to the overall quality and longevity of software products, making it an essential part of the development lifecycle.