diff --git a/include/shell/shell_dummy.h b/include/shell/shell_dummy.h
index e2af17fcd91..7d970121099 100644
--- a/include/shell/shell_dummy.h
+++ b/include/shell/shell_dummy.h
@@ -24,7 +24,7 @@ struct shell_dummy {
 	size_t len;
 
 	/** output buffer to collect shell output */
-	char buf[300];
+	char buf[CONFIG_SHELL_BACKEND_DUMMY_BUF_SIZE];
 };
 
 #define SHELL_DUMMY_DEFINE(_name)					\
diff --git a/subsys/shell/Kconfig.backends b/subsys/shell/Kconfig.backends
index dcdee1761d6..076aa2d4052 100644
--- a/subsys/shell/Kconfig.backends
+++ b/subsys/shell/Kconfig.backends
@@ -291,11 +291,21 @@ config SHELL_BACKEND_DUMMY
 	  Enable dummy backend which can be used to execute commands with no
 	  need for physical transport interface.
 
+if SHELL_BACKEND_DUMMY
+
 config SHELL_PROMPT_DUMMY
 	string "Displayed prompt name"
-	depends on SHELL_BACKEND_DUMMY
 	default "~$ "
 	help
 	  Displayed prompt name for DUMMY backend.
 
+config SHELL_BACKEND_DUMMY_BUF_SIZE
+	int "Size of dummy buffer size"
+	default 300
+	help
+	  This is size of output buffer that will be used by dummy backend, this limits number of
+	  characters that will be captured from command output.
+
+endif # SHELL_BACKEND_DUMMY
+
 endif # SHELL_BACKENDS
diff --git a/subsys/shell/shell.c b/subsys/shell/shell.c
index 5237d76e1e7..e58f5bd0098 100644
--- a/subsys/shell/shell.c
+++ b/subsys/shell/shell.c
@@ -8,7 +8,9 @@
 #include <stdlib.h>
 #include <sys/atomic.h>
 #include <shell/shell.h>
+#if defined(CONFIG_SHELL_BACKEND_DUMMY)
 #include <shell/shell_dummy.h>
+#endif
 #include "shell_ops.h"
 #include "shell_help.h"
 #include "shell_utils.h"