diff --git a/flake.nix b/flake.nix
index e9d731f0..e9cd04b9 100644
--- a/flake.nix
+++ b/flake.nix
@@ -65,6 +65,13 @@
             };
           };
 
+          test-cabal2nix = {
+            dir = "test/cabal2nix";
+            overrideInputs = {
+              inherit nixpkgs flake-parts haskell-flake;
+            };
+          };
+
           test-with-subdir = {
             dir = "test/with-subdir";
             overrideInputs = {
diff --git a/nix/build-haskell-package.nix b/nix/build-haskell-package.nix
index 0859b9a8..10ea3255 100644
--- a/nix/build-haskell-package.nix
+++ b/nix/build-haskell-package.nix
@@ -12,7 +12,7 @@
 }:
 
 let
-  mkNewStorePath = name: src:
+  mkNewStorePath' = name: src:
     # Since 'src' may be a subdirectory of a store path
     # (in string form, which means that it isn't automatically
     # copied), the purpose of cleanSourceWith here is to create a
@@ -22,15 +22,39 @@ let
       name = "${name}";
       inherit src;
     };
-in
 
-name: root:
-lib.pipe root
-  [
-    # Avoid rebuilding because of changes in parent directories
-    (mkNewStorePath "source-${name}")
-    (x: log.traceDebug "${name}.mkNewStorePath ${x.outPath}" x)
+  # Avoid rebuilding because of changes in parent directories
+  mkNewStorePath = name: src:
+    let newSrc = mkNewStorePath' name src;
+    in log.traceDebug "${name}.mkNewStorePath ${newSrc}" newSrc;
+
+  callCabal2nix = name: src:
+    let pkg = self.callCabal2nix name src { };
+    in log.traceDebug "${name}.callCabal2nix src=${src} deriver=${pkg.cabal2nixDeriver.outPath}" pkg;
+
+  # Use cached cabal2nix generated nix expression if present, otherwise use IFD (callCabal2nix)
+  callCabal2NixUnlessCached = name: src: cabal2nixFile:
+    let path = "${src}/${cabal2nixFile}";
+    in
+    if builtins.pathExists path
+    then
+      callPackage name path
+    else
+      callCabal2nix name src;
+
+  callPackage = name: nixFilePath:
+    let pkg = self.callPackage nixFilePath { };
+    in log.traceDebug "${name}.callPackage[cabal2nix] ${nixFilePath}" pkg;
+
+  callHackage = name: version:
+    let pkg = self.callHackage name version { };
+    in log.traceDebug "${name}.callHackage ver=${version}" pkg;
+in
 
-    (root: self.callCabal2nix name root { })
-    (x: log.traceDebug "${name}.cabal2nixDeriver ${x.cabal2nixDeriver.outPath}" x)
-  ]
+name: cfg:
+# If 'source' is a path, we treat it as such. Otherwise, we assume it's a version (from hackage).
+if lib.types.path.check cfg.source
+then
+  callCabal2NixUnlessCached name (mkNewStorePath name cfg.source) cfg.cabal2NixFile
+else
+  callHackage name cfg.source
diff --git a/nix/modules/project/packages/default.nix b/nix/modules/project/packages/default.nix
index 5a39934c..6bcd6e6e 100644
--- a/nix/modules/project/packages/default.nix
+++ b/nix/modules/project/packages/default.nix
@@ -58,16 +58,8 @@ in
           build-haskell-package = import ../../../build-haskell-package.nix {
             inherit pkgs lib self log;
           };
-          getOrMkPackage = name: cfg:
-            if lib.types.path.check cfg.source
-            then
-              log.traceDebug "${name}.callCabal2nix ${cfg.source}"
-                (build-haskell-package name cfg.source)
-            else
-              log.traceDebug "${name}.callHackage ${cfg.source}"
-                (self.callHackage name cfg.source { });
         in
-        lib.mapAttrs getOrMkPackage project.config.packages;
+        lib.mapAttrs build-haskell-package project.config.packages;
     };
   };
 }
diff --git a/nix/modules/project/packages/package.nix b/nix/modules/project/packages/package.nix
index e8921c34..21a5c960 100644
--- a/nix/modules/project/packages/package.nix
+++ b/nix/modules/project/packages/package.nix
@@ -23,6 +23,16 @@ in
       '';
     };
 
+    cabal2NixFile = lib.mkOption {
+      type = lib.types.str;
+      description = ''
+        Filename of the cabal2nix generated nix expression.
+
+        This gets used if it exists instead of using IFD (callCabal2nix).
+      '';
+      default = "cabal.nix";
+    };
+
     cabal.executables = mkOption {
       type = types.nullOr (types.listOf types.str);
       description = ''
diff --git a/test/cabal2nix/default.nix b/test/cabal2nix/default.nix
new file mode 100644
index 00000000..bbfbbbcc
--- /dev/null
+++ b/test/cabal2nix/default.nix
@@ -0,0 +1,11 @@
+{ mkDerivation, base, lib, random }:
+mkDerivation {
+  pname = "haskell-flake-test";
+  version = "0.1.0.0";
+  src = ./.;
+  isLibrary = false;
+  isExecutable = true;
+  executableHaskellDepends = [ base random ];
+  license = "unknown";
+  mainProgram = "haskell-flake-test";
+}
diff --git a/test/cabal2nix/flake.nix b/test/cabal2nix/flake.nix
new file mode 100644
index 00000000..3bd27951
--- /dev/null
+++ b/test/cabal2nix/flake.nix
@@ -0,0 +1,35 @@
+{
+  # Disable IFD for this test.
+  nixConfig = {
+    allow-import-from-derivation = false;
+  };
+
+  # Since there is no flake.lock file (to avoid incongruent haskell-flake
+  # pinning), we must specify revisions for *all* inputs to ensure
+  # reproducibility.
+  inputs = {
+    nixpkgs = { };
+    flake-parts = { };
+    haskell-flake = { };
+  };
+
+  outputs = inputs@{ self, nixpkgs, flake-parts, ... }:
+    flake-parts.lib.mkFlake { inherit inputs; } {
+      systems = nixpkgs.lib.systems.flakeExposed;
+      imports = [
+        inputs.haskell-flake.flakeModule
+      ];
+      debug = true;
+      perSystem = { config, self', pkgs, lib, ... }: {
+        haskellProjects.default = {
+          # If IFD is disabled, 
+          # we need to specify the pre-generated `cabal2nix` expressions
+          # file to haskell-flake for the package, 
+          # otherwise build would fail as it would use `callCabal2nix` function
+          # which uses IFD.
+          packages.haskell-flake-test.cabal2NixFile = "default.nix";
+          settings = { };
+        };
+      };
+    };
+}
diff --git a/test/cabal2nix/haskell-flake-test.cabal b/test/cabal2nix/haskell-flake-test.cabal
new file mode 100644
index 00000000..29661a1a
--- /dev/null
+++ b/test/cabal2nix/haskell-flake-test.cabal
@@ -0,0 +1,20 @@
+cabal-version:   3.0
+name:            haskell-flake-test
+version:         0.1.0.0
+license:         NONE
+author:          Joe
+maintainer:      joe@example.com
+build-type:      Simple
+
+common warnings
+    ghc-options: -Wall
+
+executable haskell-flake-test
+    import:           warnings
+    main-is:          Main.hs
+    build-depends:
+        base,
+        random
+    hs-source-dirs:   src
+    default-language: Haskell2010
+
diff --git a/test/cabal2nix/src/Main.hs b/test/cabal2nix/src/Main.hs
new file mode 100644
index 00000000..21d21d0c
--- /dev/null
+++ b/test/cabal2nix/src/Main.hs
@@ -0,0 +1,6 @@
+module Main where
+
+import System.Random
+
+main :: IO ()
+main = putStrLn "Hello, Haskell!"