diff --git a/packages/cypress/src/generators/cypress-component-project/cypress-component-project.spec.ts b/packages/cypress/src/generators/cypress-component-project/cypress-component-project.spec.ts
index 58ea97f0502ed..a687f47b9c98c 100644
--- a/packages/cypress/src/generators/cypress-component-project/cypress-component-project.spec.ts
+++ b/packages/cypress/src/generators/cypress-component-project/cypress-component-project.spec.ts
@@ -129,6 +129,7 @@ describe('Cypress Component Project', () => {
       '../**/*.cy.jsx',
       '../**/*.d.ts',
     ]);
+    expect(cyTsConfig.compilerOptions.outDir).toEqual('../../../dist/out-tsc');
     const libTsConfig = readJson(tree, 'libs/cool-lib/tsconfig.lib.json');
     expect(libTsConfig.exclude).toEqual(
       expect.arrayContaining([
diff --git a/packages/cypress/src/generators/cypress-component-project/files/cypress/tsconfig.cy.json b/packages/cypress/src/generators/cypress-component-project/files/cypress/tsconfig.cy.json
index 9025c2aa39eba..9c26314dd83ef 100644
--- a/packages/cypress/src/generators/cypress-component-project/files/cypress/tsconfig.cy.json
+++ b/packages/cypress/src/generators/cypress-component-project/files/cypress/tsconfig.cy.json
@@ -1,7 +1,7 @@
 {
   "extends": "../tsconfig.json",
   "compilerOptions": {
-    "outDir": "../../../dist/out-tsc",
+    "outDir": "<%= offsetFromRoot %>../dist/out-tsc",
     "module": "commonjs",
     "types": ["cypress", "node"]
   },