diff --git a/packages/workspace/src/utilities/cache-directory.ts b/packages/workspace/src/utilities/cache-directory.ts
index b576a7139b..fb7438aec9 100644
--- a/packages/workspace/src/utilities/cache-directory.ts
+++ b/packages/workspace/src/utilities/cache-directory.ts
@@ -2,10 +2,6 @@ import { join } from 'path';
 import { readJsonFile } from './fileutils';
 
 export function readCacheDirectoryProperty(root: string) {
-  const cacheDir = process.env.NX_CACHE_DIRECTORY;
-  if (cacheDir) {
-    return cacheDir;
-  }
   try {
     const nxJson = readJsonFile(join(root, 'nx.json'));
     return nxJson.tasksRunnerOptions.default.options.cacheDirectory;
@@ -15,6 +11,10 @@ export function readCacheDirectoryProperty(root: string) {
 }
 
 export function cacheDirectory(root: string, cacheDirectory: string) {
+  const cacheDirFromEnv = process.env.NX_CACHE_DIRECTORY;
+  if (cacheDirFromEnv) {
+    cacheDirectory = cacheDirFromEnv;
+  }
   if (cacheDirectory) {
     if (cacheDirectory.startsWith('./')) {
       return join(root, cacheDirectory);