diff --git a/tools/ci/test_build_system_cmake.sh b/tools/ci/test_build_system_cmake.sh
index 92acd5965..b2f9cae7f 100755
--- a/tools/ci/test_build_system_cmake.sh
+++ b/tools/ci/test_build_system_cmake.sh
@@ -279,6 +279,18 @@ function run_tests()
     mv CMakeLists.bak CMakeLists.txt
     assert_built ${APP_BINS} ${BOOTLOADER_BINS} ${PARTITION_BIN}
 
+    print_status "Setting EXTRA_COMPONENT_DIRS works"
+    clean_build_dir
+    mkdir -p main/main/main # move main component contents to another directory
+    mv main/* main/main/main
+    cp CMakeLists.txt CMakeLists.bak # set EXTRA_COMPONENT_DIRS to point to the other directory
+    sed -i "s%cmake_minimum_required(VERSION \([0-9]\+\).\([0-9]\+\))%cmake_minimum_required(VERSION \1.\2)\nset(EXTRA_COMPONENT_DIRS main/main/main)%" CMakeLists.txt
+    idf.py build || failure "Build with EXTRA_COMPONENT_DIRS set failed"
+    mv CMakeLists.bak CMakeLists.txt # revert previous modifications
+    mv main/main/main/* main
+    rm -rf main/main
+    assert_built ${APP_BINS} ${BOOTLOADER_BINS} ${PARTITION_BIN}
+
     print_status "All tests completed"
     if [ -n "${FAILURES}" ]; then
         echo "Some failures were detected:"
diff --git a/tools/cmake/project.cmake b/tools/cmake/project.cmake
index 679023e48..034566e7f 100644
--- a/tools/cmake/project.cmake
+++ b/tools/cmake/project.cmake
@@ -18,25 +18,31 @@ endfunction()
 
 macro(project name)
 
-    # Bridge existing documented variable names with library namespaced variables in order for old projects to work.
+    # Bridge existing documented variable names with library namespaced
+    # variables in order for old projects to work.
+
     if(COMPONENT_DIRS)
         spaces2list(COMPONENT_DIRS)
 
         foreach(component_dir ${COMPONENT_DIRS})
-            get_filename_component(full_path ${component_dir} ABSOLUTE)
-            get_filename_component(idf_path "${IDF_PATH}/components" ABSOLUTE)
-
-            if(NOT full_path STREQUAL idf_path)
-                set(IDF_EXTRA_COMPONENT_DIRS "${IDF_EXTRA_COMPONENT_DIRS} ${component_dir}")
-            endif()
+            get_filename_component(component_dir ${component_dir} ABSOLUTE BASE_DIR ${CMAKE_SOURCE_DIR})
+            list(APPEND IDF_COMPONENT_DIRS "${component_dir}")
         endforeach()
-    else()
-        if(MAIN_SRCS)
-            set(IDF_EXTRA_COMPONENT_DIRS "${EXTRA_COMPONENT_DIRS} ${CMAKE_SOURCE_DIR}/components")
-        else()
-            set(IDF_EXTRA_COMPONENT_DIRS "${EXTRA_COMPONENT_DIRS} \
-                                        ${CMAKE_SOURCE_DIR}/components ${CMAKE_SOURCE_DIR}/main")
-        endif()
+    endif()
+
+    if(EXTRA_COMPONENT_DIRS)
+        spaces2list(EXTRA_COMPONENT_DIRS)
+
+        foreach(component_dir ${EXTRA_COMPONENT_DIRS})
+            get_filename_component(component_dir ${component_dir} ABSOLUTE BASE_DIR ${CMAKE_SOURCE_DIR})
+            list(APPEND IDF_EXTRA_COMPONENT_DIRS "${component_dir}")
+        endforeach()
+    endif()
+
+    list(APPEND IDF_EXTRA_COMPONENT_DIRS "${CMAKE_SOURCE_DIR}/components")
+
+    if(NOT MAIN_SRCS)
+        list(APPEND IDF_EXTRA_COMPONENT_DIRS "${CMAKE_SOURCE_DIR}/main")
     endif()
 
     if(COMPONENTS)