diff --git a/pw_env_setup/py/pw_env_setup/virtualenv_setup/install.py b/pw_env_setup/py/pw_env_setup/virtualenv_setup/install.py
index d7134d4..2b48e08 100644
--- a/pw_env_setup/py/pw_env_setup/virtualenv_setup/install.py
+++ b/pw_env_setup/py/pw_env_setup/virtualenv_setup/install.py
@@ -192,7 +192,7 @@
 
     def install_packages(gn_target):
         if gn_out_dir is None:
-            build_dir = os.path.join(venv_path, gn_target.name)
+            build_dir = os.path.join(project_root, 'out')
         else:
             build_dir = gn_out_dir