diff --git a/tools/cmake/project.cmake b/tools/cmake/project.cmake
index 72504c061cfb..ee4355ff38e6 100644
--- a/tools/cmake/project.cmake
+++ b/tools/cmake/project.cmake
@@ -632,6 +632,15 @@ macro(project project_name)
         set(${PROJECT_NAME}_VERSION_TWEAK "${${PROJECT_NAME}_VERSION_TWEAK}" PARENT_SCOPE)
         set(${PROJECT_NAME}_DESCRIPTION "${${PROJECT_NAME}_DESCRIPTION}" PARENT_SCOPE)
         set(${PROJECT_NAME}_HOMEPAGE_URL "${${PROJECT_NAME}_HOMEPAGE_URL}" PARENT_SCOPE)
+        if(${CMAKE_VERSION} VERSION_GREATER_EQUAL "3.21")
+            if(CMAKE_CURRENT_SOURCE_DIR STREQUAL CMAKE_SOURCE_DIR)
+                set(PROJECT_IS_TOP_LEVEL ON PARENT_SCOPE)
+                set(${PROJECT_NAME}_IS_TOP_LEVEL ON PARENT_SCOPE)
+            else()
+                set(PROJECT_IS_TOP_LEVEL OFF PARENT_SCOPE)
+                set(${PROJECT_NAME}_IS_TOP_LEVEL OFF PARENT_SCOPE)
+            endif()
+        endif()
     endfunction()
 
     # Prepare the following arguments for the idf_build_process() call using external