diff --git a/Kconfig.zephyr b/Kconfig.zephyr
index 0af22907526..3a4ed0e9dae 100644
--- a/Kconfig.zephyr
+++ b/Kconfig.zephyr
@@ -6,7 +6,7 @@
 
 menu "Modules"
 
-source "$(CMAKE_BINARY_DIR)/Kconfig.modules"
+source "$(KCONFIG_BINARY_DIR)/Kconfig.modules"
 source "modules/Kconfig"
 
 endmenu
diff --git a/cmake/app/boilerplate.cmake b/cmake/app/boilerplate.cmake
index a72f325d157..d6e163ec669 100644
--- a/cmake/app/boilerplate.cmake
+++ b/cmake/app/boilerplate.cmake
@@ -492,6 +492,11 @@ include(${ZEPHYR_BASE}/cmake/host-tools.cmake)
 # Include board specific device-tree flags before parsing.
 include(${BOARD_DIR}/pre_dt_board.cmake OPTIONAL)
 
+# Build directory for generated KConfig files, such as:
+# - Zephyr modules Kconfig files
+set(KCONFIG_BINARY_DIR ${CMAKE_BINARY_DIR}/Kconfig)
+file(MAKE_DIRECTORY ${KCONFIG_BINARY_DIR})
+
 # DTS should be close to kconfig because CONFIG_ variables from
 # kconfig and dts should be available at the same time.
 #
diff --git a/cmake/kconfig.cmake b/cmake/kconfig.cmake
index 94f4bf2fd5e..a6bb9052b2b 100644
--- a/cmake/kconfig.cmake
+++ b/cmake/kconfig.cmake
@@ -43,7 +43,7 @@ set(ENV{ARCH}      ${ARCH})
 set(ENV{BOARD_DIR} ${BOARD_DIR})
 set(ENV{SOC_DIR}   ${SOC_DIR})
 set(ENV{SHIELD_AS_LIST} "${SHIELD_AS_LIST}")
-set(ENV{CMAKE_BINARY_DIR} ${CMAKE_BINARY_DIR})
+set(ENV{KCONFIG_BINARY_DIR} ${KCONFIG_BINARY_DIR})
 set(ENV{ARCH_DIR}   ${ARCH_DIR})
 set(ENV{TOOLCHAIN_KCONFIG_DIR} "${TOOLCHAIN_KCONFIG_DIR}")
 set(ENV{EDT_PICKLE} ${EDT_PICKLE})
@@ -87,7 +87,7 @@ foreach(kconfig_target
     BOARD_DIR=$ENV{BOARD_DIR}
     SOC_DIR=$ENV{SOC_DIR}
     SHIELD_AS_LIST=$ENV{SHIELD_AS_LIST}
-    CMAKE_BINARY_DIR=$ENV{CMAKE_BINARY_DIR}
+    KCONFIG_BINARY_DIR=$ENV{KCONFIG_BINARY_DIR}
     ZEPHYR_TOOLCHAIN_VARIANT=${ZEPHYR_TOOLCHAIN_VARIANT}
     TOOLCHAIN_KCONFIG_DIR=${TOOLCHAIN_KCONFIG_DIR}
     ARCH_DIR=$ENV{ARCH_DIR}
diff --git a/cmake/zephyr_module.cmake b/cmake/zephyr_module.cmake
index ef530fb2547..4767f0120f6 100644
--- a/cmake/zephyr_module.cmake
+++ b/cmake/zephyr_module.cmake
@@ -18,7 +18,7 @@ if(ZEPHYR_EXTRA_MODULES)
   set(ZEPHYR_EXTRA_MODULES_ARG "--extra-modules" ${ZEPHYR_EXTRA_MODULES})
 endif()
 
-set(KCONFIG_MODULES_FILE ${CMAKE_BINARY_DIR}/Kconfig.modules)
+set(KCONFIG_MODULES_FILE ${KCONFIG_BINARY_DIR}/Kconfig.modules)
 
 if(WEST)
   set(WEST_ARG "--zephyr-base" ${ZEPHYR_BASE})