diff --git a/assets/runtime/env-defaults b/assets/runtime/env-defaults
index f2d25e6ac..908d368fc 100644
--- a/assets/runtime/env-defaults
+++ b/assets/runtime/env-defaults
@@ -176,7 +176,7 @@ GITLAB_TERRAFORM_STATE_ENABLED=${GITLAB_TERRAFORM_STATE_ENABLED:-true}
 GITLAB_TERRAFORM_STATE_STORAGE_PATH="${GITLAB_TERRAFORM_STATE_STORAGE_PATH:-$GITLAB_SHARED_DIR/terraform_state}"
 
 GITLAB_TERRAFORM_STATE_OBJECT_STORE_ENABLED=${GITLAB_TERRAFORM_STATE_OBJECT_STORE_ENABLED:-false}
-GITLAB_TERRAFORM_STATE_OBJECT_STORE_REMOTE_DIRECTORY=${GITLAB_PACKAGES_OBJECT_STORE_REMOTE_DIRECTORY:-terraform_state}
+GITLAB_TERRAFORM_STATE_OBJECT_STORE_REMOTE_DIRECTORY=${GITLAB_TERRAFORM_STATE_OBJECT_STORE_REMOTE_DIRECTORY:-terraform_state}
 GITLAB_TERRAFORM_STATE_OBJECT_STORE_CONNECTION_PROVIDER=${GITLAB_TERRAFORM_STATE_OBJECT_STORE_CONNECTION_PROVIDER:-$GITLAB_OBJECT_STORE_CONNECTION_PROVIDER}
 
 # TERRAFORM STATE:AWS