diff --git a/Makefile b/Makefile
index 98081009cd0..954bd7d4287 100644
--- a/Makefile
+++ b/Makefile
@@ -599,9 +599,9 @@ ARCH = $(subst $(DQUOTE),,$(CONFIG_ARCH))
 export ARCH
 
 ifeq ($(CONFIG_DEBUG),y)
-KBUILD_CFLAGS += -Og
+KBUILD_CFLAGS_OPTIMIZE := -Og
 else
-KBUILD_CFLAGS += -Os
+KBUILD_CFLAGS_OPTIMIZE := -Os
 endif
 
 ifdef ZEPHYR_GCC_VARIANT
@@ -613,6 +613,9 @@ $(if $(CROSS_COMPILE),, \
 endif
 endif
 
+# Let Makefile.toolchain adjust optimization level
+KBUILD_CFLAGS += $(KBUILD_CFLAGS_OPTIMIZE)
+
 -include $(srctree)/ext/Makefile
 -include $(srctree)/lib/Makefile
 
diff --git a/scripts/Makefile.toolchain.zephyr b/scripts/Makefile.toolchain.zephyr
index faea0b1a5d2..8aa81ddae25 100644
--- a/scripts/Makefile.toolchain.zephyr
+++ b/scripts/Makefile.toolchain.zephyr
@@ -36,6 +36,16 @@ ifeq ($(SDK_VERSION),0.8.2)
 	TOOLCHAIN_ARCH := i686
 endif
 
+# TODO remove once we have a replacement for 0.9 that fixes ZEP-1882
+# See https://jira.zephyrproject.org/browse/ZEP-1882
+ifeq ($(SDK_VERSION),0.9)
+ifeq ($(ARCH),arc)
+ifneq ($(CONFIG_DEBUG),y)
+KBUILD_CFLAGS_OPTIMIZE := -O2
+endif
+endif
+endif
+
 ifeq ($(HOST_OS),MINGW)
 	TOOLCHAIN_HOME = ${ZEPHYR_SDK_INSTALL_DIR}/sysroots/i686-pokysdk-mingw32
 else