diff --git a/src/cargo/core/compiler/build_runner/compilation_files.rs b/src/cargo/core/compiler/build_runner/compilation_files.rs
index a914dc7056d..bbc13c1536a 100644
--- a/src/cargo/core/compiler/build_runner/compilation_files.rs
+++ b/src/cargo/core/compiler/build_runner/compilation_files.rs
@@ -11,6 +11,7 @@ use tracing::debug;
 
 use super::{BuildContext, BuildRunner, CompileKind, FileFlavor, Layout};
 use crate::core::compiler::{CompileMode, CompileTarget, CrateType, FileType, Unit};
+use crate::core::features::is_new_build_dir_layout_enabled;
 use crate::core::{Target, TargetKind, Workspace};
 use crate::util::{self, CargoResult, OnceExt, StableHasher};
 
@@ -245,7 +246,7 @@ impl<'a, 'gctx: 'a> CompilationFiles<'a, 'gctx> {
     /// Note that some units may share the same directory, so care should be
     /// taken in those cases!
     fn pkg_dir(&self, unit: &Unit) -> String {
-        let separator = match self.ws.gctx().cli_unstable().build_dir_new_layout {
+        let separator = match is_new_build_dir_layout_enabled(self.ws.gctx()) {
             true => "/",
             false => "-",
         };
diff --git a/src/cargo/core/compiler/build_runner/mod.rs b/src/cargo/core/compiler/build_runner/mod.rs
index 02f3c62267a..f64284ee8e2 100644
--- a/src/cargo/core/compiler/build_runner/mod.rs
+++ b/src/cargo/core/compiler/build_runner/mod.rs
@@ -7,6 +7,7 @@ use std::sync::{Arc, Mutex};
 use crate::core::PackageId;
 use crate::core::compiler::compilation::{self, UnitOutput};
 use crate::core::compiler::{self, Unit, UserIntent, artifact};
+use crate::core::features::is_new_build_dir_layout_enabled;
 use crate::util::cache_lock::CacheLockMode;
 use crate::util::errors::CargoResult;
 use annotate_snippets::{Level, Message};
@@ -467,7 +468,7 @@ impl<'a, 'gctx> BuildRunner<'a, 'gctx> {
                     .root_output
                     .insert(kind, artifact_dir.dest().to_path_buf());
             }
-            if self.bcx.gctx.cli_unstable().build_dir_new_layout {
+            if is_new_build_dir_layout_enabled(self.bcx.gctx) {
                 for (unit, _) in self.bcx.unit_graph.iter() {
                     let dep_dir = self.files().deps_dir(unit);
                     paths::create_dir_all(&dep_dir)?;
diff --git a/src/cargo/core/compiler/layout.rs b/src/cargo/core/compiler/layout.rs
index 272e8198e27..664ccd41c9e 100644
--- a/src/cargo/core/compiler/layout.rs
+++ b/src/cargo/core/compiler/layout.rs
@@ -103,6 +103,7 @@
 
 use crate::core::Workspace;
 use crate::core::compiler::CompileTarget;
+use crate::core::features::is_new_build_dir_layout_enabled;
 use crate::util::flock::is_on_nfs_mount;
 use crate::util::{CargoResult, FileLock};
 use cargo_util::paths;
@@ -129,7 +130,7 @@ impl Layout {
         dest: &str,
         must_take_artifact_dir_lock: bool,
     ) -> CargoResult<Layout> {
-        let is_new_layout = ws.gctx().cli_unstable().build_dir_new_layout;
+        let is_new_layout = is_new_build_dir_layout_enabled(ws.gctx());
         let mut root = ws.target_dir();
         let mut build_root = ws.build_dir();
         if let Some(target) = target {
diff --git a/src/cargo/core/compiler/mod.rs b/src/cargo/core/compiler/mod.rs
index 4ad36afdbb8..4df1bb57672 100644
--- a/src/cargo/core/compiler/mod.rs
+++ b/src/cargo/core/compiler/mod.rs
@@ -95,6 +95,7 @@ use self::unit_graph::UnitDep;
 use crate::core::compiler::future_incompat::FutureIncompatReport;
 use crate::core::compiler::timings::SectionTiming;
 pub use crate::core::compiler::unit::{Unit, UnitInterner};
+use crate::core::features::is_new_build_dir_layout_enabled;
 use crate::core::manifest::TargetSourcePath;
 use crate::core::profiles::{PanicStrategy, Profile, StripInner};
 use crate::core::{Feature, PackageId, Target, Verbosity};
@@ -1825,7 +1826,7 @@ pub fn lib_search_paths(
     unit: &Unit,
 ) -> CargoResult<Vec<OsString>> {
     let mut lib_search_paths = Vec::new();
-    if build_runner.bcx.gctx.cli_unstable().build_dir_new_layout {
+    if is_new_build_dir_layout_enabled(build_runner.bcx.gctx) {
         let mut map = BTreeMap::new();
 
         // Recursively add all dependency args to rustc process
diff --git a/src/cargo/core/features.rs b/src/cargo/core/features.rs
index 36bb8414296..82f71ae3bc7 100644
--- a/src/cargo/core/features.rs
+++ b/src/cargo/core/features.rs
@@ -1556,3 +1556,13 @@ pub fn cargo_docs_link(path: &str) -> String {
     };
     format!("https://doc.rust-lang.org/{url_channel}cargo/{path}")
 }
+
+/// Returns true of the new build dir layout is enabled.
+#[allow(clippy::disallowed_methods)]
+pub fn is_new_build_dir_layout_enabled(gctx: &GlobalContext) -> bool {
+    match std::env::var("CARGO_BUILD_DIR_LAYOUT_V2").as_deref() {
+        Ok("true") => true,
+        Ok("false") => false,
+        Ok(_) | Err(_) => gctx.cli_unstable().build_dir_new_layout,
+    }
+}
diff --git a/src/cargo/ops/cargo_clean.rs b/src/cargo/ops/cargo_clean.rs
index 7f445259dcc..28ad6e4be16 100644
--- a/src/cargo/ops/cargo_clean.rs
+++ b/src/cargo/ops/cargo_clean.rs
@@ -1,4 +1,5 @@
 use crate::core::compiler::{CompileKind, CompileMode, Layout, RustcTargetData};
+use crate::core::features::is_new_build_dir_layout_enabled;
 use crate::core::profiles::Profiles;
 use crate::core::{PackageIdSpec, PackageIdSpecQuery, TargetKind, Workspace};
 use crate::ops;
@@ -196,7 +197,7 @@ fn clean_specs(
     clean_ctx.progress = Box::new(CleaningPackagesBar::new(clean_ctx.gctx, packages.len()));
     let mut dirs_to_clean = DirectoriesToClean::default();
 
-    if clean_ctx.gctx.cli_unstable().build_dir_new_layout {
+    if is_new_build_dir_layout_enabled(clean_ctx.gctx) {
         for pkg in packages {
             clean_ctx.progress.on_cleaning_package(&pkg.name())?;
 
diff --git a/src/doc/src/reference/unstable.md b/src/doc/src/reference/unstable.md
index 9e684dc1d9d..dcf158cfce8 100644
--- a/src/doc/src/reference/unstable.md
+++ b/src/doc/src/reference/unstable.md
@@ -2040,6 +2040,12 @@ enabled = true
 Enables the new build-dir filesystem layout.
 This layout change unblocks work towards caching and locking improvements.
 
+In addition to `-Zbuild-dir-new-layout`, `CARGO_BUILD_DIR_LAYOUT_V2` also exists as
+a way to opt in and out of the new layout during the transition period.
+`CARGO_BUILD_DIR_LAYOUT_V2=true` allows users to opt in to the new layout, even on stable.
+`CARGO_BUILD_DIR_LAYOUT_V2=false` allows users to opt out to the new layout.
+This includes post stabilization but it's important to note that this is a temporary flag and will
+eventually be removed. See the tracking issue for the transition plan and updates.
 
 ## compile-time-deps
 
diff --git a/tests/testsuite/build_dir.rs b/tests/testsuite/build_dir.rs
index 8c0e591dcaa..30b44d7def8 100644
--- a/tests/testsuite/build_dir.rs
+++ b/tests/testsuite/build_dir.rs
@@ -1094,6 +1094,63 @@ fn template_should_handle_reject_unmatched_brackets() {
         .run();
 }
 
+#[cargo_test]
+fn fallback_env_var_should_allow_overriding() {
+    let p = project()
+        .file("src/main.rs", r#"fn main() { println!("Hello, World!") }"#)
+        .file(
+            ".cargo/config.toml",
+            r#"
+            [build]
+            target-dir = "target-dir"
+            build-dir = "build-dir"
+            "#,
+        )
+        .build();
+
+    // Stable + CARGO_BUILD_DIR_LAYOUT_V2=true should opt in
+    p.cargo("build")
+        .env("CARGO_BUILD_DIR_LAYOUT_V2", "true")
+        .enable_mac_dsym()
+        .run();
+
+    p.root().join("build-dir").assert_build_dir_layout(str![[r#"
+[ROOT]/foo/build-dir/.rustc_info.json
+[ROOT]/foo/build-dir/CACHEDIR.TAG
+[ROOT]/foo/build-dir/debug/.cargo-lock
+[ROOT]/foo/build-dir/debug/build/foo/[HASH]/fingerprint/bin-foo
+[ROOT]/foo/build-dir/debug/build/foo/[HASH]/fingerprint/bin-foo.json
+[ROOT]/foo/build-dir/debug/build/foo/[HASH]/fingerprint/dep-bin-foo
+[ROOT]/foo/build-dir/debug/build/foo/[HASH]/fingerprint/invoked.timestamp
+[ROOT]/foo/build-dir/debug/build/foo/[HASH]/deps/foo[..][EXE]
+[ROOT]/foo/build-dir/debug/build/foo/[HASH]/deps/foo[..].d
+
+"#]]);
+
+    p.root().join("build-dir").rm_rf();
+
+    // Nightly + -Zbuild-dir-new-layout + CARGO_BUILD_DIR_LAYOUT_V2=false should allow user to fall
+    // back to old layout
+    p.cargo("-Zbuild-dir-new-layout build")
+        .masquerade_as_nightly_cargo(&["new build-dir layout"])
+        .env("CARGO_BUILD_DIR_LAYOUT_V2", "false")
+        .enable_mac_dsym()
+        .run();
+
+    p.root().join("build-dir").assert_build_dir_layout(str![[r#"
+[ROOT]/foo/build-dir/.rustc_info.json
+[ROOT]/foo/build-dir/CACHEDIR.TAG
+[ROOT]/foo/build-dir/debug/.cargo-lock
+[ROOT]/foo/build-dir/debug/.fingerprint/foo-[HASH]/bin-foo
+[ROOT]/foo/build-dir/debug/.fingerprint/foo-[HASH]/bin-foo.json
+[ROOT]/foo/build-dir/debug/.fingerprint/foo-[HASH]/dep-bin-foo
+[ROOT]/foo/build-dir/debug/.fingerprint/foo-[HASH]/invoked.timestamp
+[ROOT]/foo/build-dir/debug/deps/foo[..][EXE]
+[ROOT]/foo/build-dir/debug/deps/foo[..].d
+
+"#]]);
+}
+
 fn parse_workspace_manifest_path_hash(hash_dir: &PathBuf) -> PathBuf {
     // Since the hash will change between test runs simply find the first directories and assume
     // that is the hash dir. The format is a 2 char directory followed by the remaining hash in the