diff --git a/grails-gradle/model/src/main/groovy/grails/util/BuildSettings.groovy b/grails-gradle/model/src/main/groovy/grails/util/BuildSettings.groovy
index 3a9a2d72397..7e59bed31f6 100644
--- a/grails-gradle/model/src/main/groovy/grails/util/BuildSettings.groovy
+++ b/grails-gradle/model/src/main/groovy/grails/util/BuildSettings.groovy
@@ -253,7 +253,7 @@ class BuildSettings {
         }
         BASE_DIR = System.getProperty(APP_BASE_DIR) ? new File(System.getProperty(APP_BASE_DIR)) : (IOUtils.findApplicationDirectoryFile() ?: new File('.'))
         GRAILS_APP_DIR_PRESENT = new File(BASE_DIR, 'grails-app').exists() || new File(BASE_DIR, 'Application.groovy').exists()
-        TARGET_DIR = new File(BASE_DIR, 'build')
+        TARGET_DIR = System.getProperty(PROJECT_TARGET_DIR) ? new File(BASE_DIR, System.getProperty(PROJECT_TARGET_DIR)) : new File(BASE_DIR, 'build')
         RESOURCES_DIR = !GRAILS_APP_DIR_PRESENT ? null : (System.getProperty(PROJECT_RESOURCES_DIR) ? new File(System.getProperty(PROJECT_RESOURCES_DIR)) : new File(TARGET_DIR, 'resources/main'))
     }
 }
diff --git a/grails-gradle/plugins/src/main/groovy/org/grails/gradle/plugin/core/GrailsGradlePlugin.groovy b/grails-gradle/plugins/src/main/groovy/org/grails/gradle/plugin/core/GrailsGradlePlugin.groovy
index 2d831789e9b..215710bc9fd 100644
--- a/grails-gradle/plugins/src/main/groovy/org/grails/gradle/plugin/core/GrailsGradlePlugin.groovy
+++ b/grails-gradle/plugins/src/main/groovy/org/grails/gradle/plugin/core/GrailsGradlePlugin.groovy
@@ -427,6 +427,7 @@ class GrailsGradlePlugin extends GroovyPlugin {
     @CompileStatic
     protected String configureGrailsBuildSettings(Project project) {
         System.setProperty(BuildSettings.APP_BASE_DIR, project.projectDir.absolutePath)
+        System.setProperty(BuildSettings.PROJECT_TARGET_DIR, project.layout.buildDirectory.get().asFile.name)
     }
 
     @CompileDynamic