diff --git a/app/ide-desktop/lib/client/src/bin/server.ts b/app/ide-desktop/lib/client/src/bin/server.ts
index afbaeb8ddf7..bebd8d22cef 100644
--- a/app/ide-desktop/lib/client/src/bin/server.ts
+++ b/app/ide-desktop/lib/client/src/bin/server.ts
@@ -3,7 +3,6 @@
 import * as fs from 'node:fs/promises'
 import * as fsSync from 'node:fs'
 import * as http from 'node:http'
-import * as os from 'node:os'
 import * as path from 'node:path'
 import * as stream from 'node:stream'
 import * as mkcert from 'mkcert'
@@ -17,6 +16,7 @@ import * as common from 'enso-common'
 import GLOBAL_CONFIG from 'enso-common/src/config.json' assert { type: 'json' }
 import * as contentConfig from 'enso-content-config'
 import * as ydocServer from 'enso-gui2/ydoc-server'
+import * as projectManagement from 'enso-project-manager-shim/src/projectManagement'
 
 import * as paths from '../paths'
 
@@ -92,7 +92,7 @@ export class Server {
 
     /** Create a simple HTTP server. */
     constructor(public config: Config) {
-        this.projectsRootDirectory = path.join(os.homedir(), 'enso/projects')
+        this.projectsRootDirectory = projectManagement.getProjectsDirectory()
     }
 
     /** Server constructor. */
diff --git a/app/ide-desktop/lib/project-manager-shim/package.json b/app/ide-desktop/lib/project-manager-shim/package.json
index 7ea1db9bf7d..4fb055ea882 100644
--- a/app/ide-desktop/lib/project-manager-shim/package.json
+++ b/app/ide-desktop/lib/project-manager-shim/package.json
@@ -3,7 +3,8 @@
   "version": "1.0.0",
   "type": "module",
   "exports": {
-    ".": "./src/projectManagerShimMiddleware.ts"
+    ".": "./src/projectManagerShimMiddleware.ts",
+    "./src/projectManagement": "./src/projectManagement.ts"
   },
   "dependencies": {
     "yaml": "^2.4.1"
diff --git a/app/ide-desktop/lib/project-manager-shim/src/desktopEnvironment.ts b/app/ide-desktop/lib/project-manager-shim/src/desktopEnvironment.ts
new file mode 100644
index 00000000000..760a8dd942b
--- /dev/null
+++ b/app/ide-desktop/lib/project-manager-shim/src/desktopEnvironment.ts
@@ -0,0 +1,81 @@
+/**
+ * @file This module contains the logic for the detection of user-specific desktop environment attributes.
+ */
+
+import * as childProcess from 'node:child_process'
+import * as os from 'node:os'
+import * as path from 'node:path'
+
+export const DOCUMENTS = getDocumentsPath()
+
+const CHILD_PROCESS_TIMEOUT = 3000
+
+/**
+ * Detects path of the user documents directory depending on the operating system.
+ */
+function getDocumentsPath(): string | undefined {
+    if (process.platform === 'linux') {
+        return getLinuxDocumentsPath()
+    } else if (process.platform === 'darwin') {
+        return getMacOsDocumentsPath()
+    } else if (process.platform === 'win32') {
+        return getWindowsDocumentsPath()
+    } else {
+        return
+    }
+}
+
+/**
+ * Returns the user documents path on Linux.
+ */
+function getLinuxDocumentsPath(): string {
+    const xdgDocumentsPath = getXdgDocumentsPath()
+
+    return xdgDocumentsPath ?? path.join(os.homedir(), 'enso')
+}
+
+/**
+ * Gets the documents directory from the XDG directory management system.
+ */
+function getXdgDocumentsPath(): string | undefined {
+    const out = childProcess.spawnSync('xdg-user-dir', ['DOCUMENTS'], {
+        timeout: CHILD_PROCESS_TIMEOUT,
+    })
+
+    if (out.error !== undefined) {
+        return
+    } else {
+        return out.stdout.toString().trim()
+    }
+}
+
+/**
+ * Get the user documents path. On macOS, `Documents` acts as a symlink pointing to the
+ * real locale-specific user documents directory.
+ */
+function getMacOsDocumentsPath(): string {
+    return path.join(os.homedir(), 'Documents')
+}
+
+/**
+ * Get the path to the `My Documents` Windows directory.
+ */
+function getWindowsDocumentsPath(): string | undefined {
+    const out = childProcess.spawnSync(
+        'reg',
+        [
+            'query',
+            '"HKCU\\Software\\Microsoft\\Windows\\CurrentVersion\\Explorer\\ShellFolders"',
+            '/v',
+            'personal',
+        ],
+        { timeout: CHILD_PROCESS_TIMEOUT }
+    )
+
+    if (out.error !== undefined) {
+        return
+    } else {
+        const stdoutString = out.stdout.toString()
+        return stdoutString.split('\\s\\s+')[4]
+    }
+}
diff --git a/app/ide-desktop/lib/project-manager-shim/src/projectManagement.ts b/app/ide-desktop/lib/project-manager-shim/src/projectManagement.ts
index 0cdd6f8eca0..52f184f78fb 100644
--- a/app/ide-desktop/lib/project-manager-shim/src/projectManagement.ts
+++ b/app/ide-desktop/lib/project-manager-shim/src/projectManagement.ts
@@ -17,6 +17,7 @@ import * as tar from 'tar'
 
 import * as common from 'enso-common'
 import * as buildUtils from 'enso-common/src/buildUtils'
+import * as desktopEnvironment from './desktopEnvironment'
 
 const logger = console
 
@@ -369,7 +370,12 @@ export function getProjectRoot(subtreePath: string): string | null {
 
 /** Get the directory that stores Enso projects. */
 export function getProjectsDirectory(): string {
-    return pathModule.join(os.homedir(), 'enso', 'projects')
+    const documentsPath = desktopEnvironment.DOCUMENTS
+    if (documentsPath === undefined) {
+        return pathModule.join(os.homedir(), 'enso', 'projects')
+    } else {
+        return pathModule.join(documentsPath, 'enso-projects')
+    }
 }
 
 /** Check if the given project is installed, i.e. can be opened with the Project Manager. */
diff --git a/app/ide-desktop/lib/project-manager-shim/src/projectManagerShimMiddleware.ts b/app/ide-desktop/lib/project-manager-shim/src/projectManagerShimMiddleware.ts
index 66e9e6d93a8..ce07aac80dc 100644
--- a/app/ide-desktop/lib/project-manager-shim/src/projectManagerShimMiddleware.ts
+++ b/app/ide-desktop/lib/project-manager-shim/src/projectManagerShimMiddleware.ts
@@ -3,7 +3,6 @@
 import * as fs from 'node:fs/promises'
 import * as fsSync from 'node:fs'
 import * as http from 'node:http'
-import * as os from 'node:os'
 import * as path from 'node:path'
 
 import * as isHiddenFile from 'is-hidden-file'
@@ -22,7 +21,7 @@ import * as projectManagement from './projectManagement'
 const HTTP_STATUS_OK = 200
 const HTTP_STATUS_BAD_REQUEST = 400
 const HTTP_STATUS_NOT_FOUND = 404
-const PROJECTS_ROOT_DIRECTORY = path.join(os.homedir(), 'enso/projects')
+const PROJECTS_ROOT_DIRECTORY = projectManagement.getProjectsDirectory()
 
 // =============
 // === Types ===
diff --git a/build.sbt b/build.sbt
index e9bcb8d1ed4..2aac1d07449 100644
--- a/build.sbt
+++ b/build.sbt
@@ -1120,6 +1120,7 @@ lazy val `project-manager` = (project in file("lib/scala/project-manager"))
       .value
   )
   .dependsOn(`akka-native`)
+  .dependsOn(`desktop-environment`)
   .dependsOn(`version-output`)
   .dependsOn(editions)
   .dependsOn(`edition-updater`)
@@ -2797,6 +2798,17 @@ lazy val `benchmarks-common` =
     )
     .dependsOn(`polyglot-api`)
 
+lazy val `desktop-environment` =
+  project
+    .in(file("lib/java/desktop-environment"))
+    .settings(
+      frgaalJavaCompilerSetting,
+      libraryDependencies ++= Seq(
+        "junit"          % "junit"           % junitVersion   % Test,
+        "com.github.sbt" % "junit-interface" % junitIfVersion % Test
+      )
+    )
+
 lazy val `bench-processor` = (project in file("lib/scala/bench-processor"))
   .settings(
     frgaalJavaCompilerSetting,
diff --git a/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/Directories.java b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/Directories.java
new file mode 100644
index 00000000000..54ed82110cb
--- /dev/null
+++ b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/Directories.java
@@ -0,0 +1,21 @@
+package org.enso.desktopenvironment;
+
+import java.io.IOException;
+import java.nio.file.Path;
+
+/** Provides information about user directories. */
+public sealed interface Directories permits LinuxDirectories, MacOsDirectories, WindowsDirectories {
+
+  /**
+   * @return the user home directory.
+   */
+  default Path getUserHome() {
+    return Path.of(System.getProperty("user.home"));
+  }
+
+  /**
+   * @return the user documents directory.
+   * @throws IOException when cannot detect the documents directory of the user.
+   */
+  Path getDocuments() throws IOException;
+}
diff --git a/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/DirectoriesFactory.java b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/DirectoriesFactory.java
new file mode 100644
index 00000000000..e6f37e9bece
--- /dev/null
+++ b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/DirectoriesFactory.java
@@ -0,0 +1,28 @@
+package org.enso.desktopenvironment;
+
+final class DirectoriesFactory {
+
+  private static final Directories INSTANCE = initDirectories();
+
+  private static Directories initDirectories() {
+    if (Platform.isLinux()) {
+      return new LinuxDirectories();
+    }
+
+    if (Platform.isMacOs()) {
+      return new MacOsDirectories();
+    }
+
+    if (Platform.isWindows()) {
+      return new WindowsDirectories();
+    }
+
+    throw new UnsupportedOperationException("Unsupported OS '" + Platform.getOsName() + "'");
+  }
+
+  private DirectoriesFactory() {}
+
+  public static Directories getInstance() {
+    return INSTANCE;
+  }
+}
diff --git a/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/LinuxDirectories.java b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/LinuxDirectories.java
new file mode 100644
index 00000000000..c005bac8b35
--- /dev/null
+++ b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/LinuxDirectories.java
@@ -0,0 +1,38 @@
+package org.enso.desktopenvironment;
+
+import java.io.IOException;
+import java.nio.charset.StandardCharsets;
+import java.nio.file.Path;
+import java.util.concurrent.TimeUnit;
+
+final class LinuxDirectories implements Directories {
+
+  private static final String[] PROCESS_XDG_DOCUMENTS = new String[] {"xdg-user-dir", "DOCUMENTS"};
+
+  /**
+   * Get the user 'Documents' directory.
+   *
+   * <p>Tries to obtain the documents directory from the XDG directory management system if
+   * available and falls back to {@code $HOME/enso}.
+   *
+   * @return the path to the user documents directory.
+   */
+  @Override
+  public Path getDocuments() {
+    try {
+      return getXdgDocuments();
+    } catch (IOException | InterruptedException e) {
+      return getUserHome().resolve("enso");
+    }
+  }
+
+  private Path getXdgDocuments() throws IOException, InterruptedException {
+    var process = new ProcessBuilder(PROCESS_XDG_DOCUMENTS).start();
+    process.waitFor(3, TimeUnit.SECONDS);
+
+    var documentsString =
+        new String(process.getInputStream().readAllBytes(), StandardCharsets.UTF_8);
+
+    return Path.of(documentsString.trim());
+  }
+}
diff --git a/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/MacOsDirectories.java b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/MacOsDirectories.java
new file mode 100644
index 00000000000..dc689bb6e2a
--- /dev/null
+++ b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/MacOsDirectories.java
@@ -0,0 +1,27 @@
+package org.enso.desktopenvironment;
+
+import java.io.IOException;
+import java.nio.file.Path;
+
+final class MacOsDirectories implements Directories {
+
+  private static final String DOCUMENTS = "Documents";
+
+  /**
+   * Get the user documents path.
+   *
+   * <p>On macOS, the 'Documents' directory acts like a symlink and points to the real
+   * locale-dependent user documents folder.
+   *
+   * @return the path to the user documents directory.
+   * @throws IOException when unable to resolve the real documents path.
+   */
+  @Override
+  public Path getDocuments() throws IOException {
+    try {
+      return getUserHome().resolve(DOCUMENTS).toRealPath();
+    } catch (IOException e) {
+      throw new IOException("Failed to resolve real MacOs documents path", e);
+    }
+  }
+}
diff --git a/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/Platform.java b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/Platform.java
new file mode 100644
index 00000000000..2bc20350dc8
--- /dev/null
+++ b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/Platform.java
@@ -0,0 +1,31 @@
+package org.enso.desktopenvironment;
+
+public final class Platform {
+
+  private static final String OS_NAME = "os.name";
+  private static final String LINUX = "linux";
+  private static final String MAC = "mac";
+  private static final String WINDOWS = "windows";
+
+  private Platform() {}
+
+  public static String getOsName() {
+    return System.getProperty(OS_NAME);
+  }
+
+  public static boolean isLinux() {
+    return getOsName().toLowerCase().contains(LINUX);
+  }
+
+  public static boolean isMacOs() {
+    return getOsName().toLowerCase().contains(MAC);
+  }
+
+  public static boolean isWindows() {
+    return getOsName().toLowerCase().contains(WINDOWS);
+  }
+
+  public static Directories getDirectories() {
+    return DirectoriesFactory.getInstance();
+  }
+}
diff --git a/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/WindowsDirectories.java b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/WindowsDirectories.java
new file mode 100644
index 00000000000..195a2b7d0f7
--- /dev/null
+++ b/lib/java/desktop-environment/src/main/java/org/enso/desktopenvironment/WindowsDirectories.java
@@ -0,0 +1,47 @@
+package org.enso.desktopenvironment;
+
+import java.io.IOException;
+import java.nio.charset.StandardCharsets;
+import java.nio.file.Path;
+import java.util.concurrent.TimeUnit;
+
+final class WindowsDirectories implements Directories {
+
+  private static final String[] PROCESS_REG_QUERY =
+      new String[] {
+        "reg",
+        "query",
+        "\"HKCU\\Software\\Microsoft\\Windows\\CurrentVersion\\Explorer\\ShellFolders\"",
+        "/v",
+        "personal"
+      };
+
+  /**
+   * Get the path to 'My Documents' user directory.
+   *
+   * <p>Method uses the registry query that may not work on Windows XP versions and below.
+   *
+   * @return the 'My Documents' user directory path.
+   * @throws IOException when fails to detect the user documents directory.
+   */
+  @Override
+  public Path getDocuments() throws IOException {
+    try {
+      var process = new ProcessBuilder(PROCESS_REG_QUERY).start();
+      process.waitFor(3, TimeUnit.SECONDS);
+
+      var stdoutString =
+          new String(process.getInputStream().readAllBytes(), StandardCharsets.UTF_8);
+      var stdoutParts = stdoutString.split("\\s\\s+");
+      if (stdoutParts.length < 5) {
+        throw new IOException("Invalid Windows registry query output: '" + stdoutString + "'");
+      }
+
+      return Path.of(stdoutParts[4].trim());
+    } catch (IOException e) {
+      throw new IOException("Failed to run Windows registry query", e);
+    } catch (InterruptedException e) {
+      throw new IOException("Windows registry query timeout", e);
+    }
+  }
+}
diff --git a/lib/java/desktop-environment/src/test/java/org/enso/desktopenvironment/DirectoriesTest.java b/lib/java/desktop-environment/src/test/java/org/enso/desktopenvironment/DirectoriesTest.java
new file mode 100644
index 00000000000..19810f8d65c
--- /dev/null
+++ b/lib/java/desktop-environment/src/test/java/org/enso/desktopenvironment/DirectoriesTest.java
@@ -0,0 +1,30 @@
+package org.enso.desktopenvironment;
+
+import java.io.IOException;
+import java.nio.file.Files;
+import org.junit.Assert;
+import org.junit.BeforeClass;
+import org.junit.Test;
+
+public class DirectoriesTest {
+
+  private static Directories directories;
+
+  @BeforeClass
+  public static void setup() {
+    directories = Platform.getDirectories();
+  }
+
+  @Test
+  public void getUserHome() {
+    var userHome = directories.getUserHome();
+    Assert.assertTrue("User home is not a directory: " + userHome, Files.isDirectory(userHome));
+  }
+
+  @Test
+  public void getDocuments() throws IOException {
+    var documents = directories.getDocuments();
+    Assert.assertTrue(
+        "User documents is not a directory" + documents, Files.isDirectory(documents));
+  }
+}
diff --git a/lib/java/desktop-environment/src/test/java/org/enso/desktopenvironment/PlatformTest.java b/lib/java/desktop-environment/src/test/java/org/enso/desktopenvironment/PlatformTest.java
new file mode 100644
index 00000000000..1b8f7de1719
--- /dev/null
+++ b/lib/java/desktop-environment/src/test/java/org/enso/desktopenvironment/PlatformTest.java
@@ -0,0 +1,12 @@
+package org.enso.desktopenvironment;
+
+import org.junit.Assert;
+import org.junit.Test;
+
+public class PlatformTest {
+
+  @Test
+  public void getDirectories() {
+    Assert.assertNotNull(Platform.getDirectories());
+  }
+}
diff --git a/lib/scala/project-manager/src/main/java/org/enso/projectmanager/event/package-info.java b/lib/scala/project-manager/src/main/java/org/enso/projectmanager/event/package-info.java
deleted file mode 100644
index 3dcf3832573..00000000000
--- a/lib/scala/project-manager/src/main/java/org/enso/projectmanager/event/package-info.java
+++ /dev/null
@@ -1 +0,0 @@
-package org.enso.projectmanager.event;
diff --git a/lib/scala/project-manager/src/main/java/org/enso/projectmanager/infrastructure/migration/ProjectsMigration.java b/lib/scala/project-manager/src/main/java/org/enso/projectmanager/infrastructure/migration/ProjectsMigration.java
new file mode 100644
index 00000000000..b98d21a0bd7
--- /dev/null
+++ b/lib/scala/project-manager/src/main/java/org/enso/projectmanager/infrastructure/migration/ProjectsMigration.java
@@ -0,0 +1,118 @@
+package org.enso.projectmanager.infrastructure.migration;
+
+import java.io.File;
+import java.io.IOException;
+import java.nio.file.Files;
+import java.nio.file.StandardCopyOption;
+import java.nio.file.attribute.PosixFilePermission;
+import java.util.HashSet;
+import java.util.Set;
+import org.apache.commons.io.FileUtils;
+import org.enso.desktopenvironment.Platform;
+import org.enso.projectmanager.boot.configuration;
+import org.slf4j.Logger;
+import org.slf4j.LoggerFactory;
+
+public final class ProjectsMigration {
+
+  private static final Logger logger = LoggerFactory.getLogger(ProjectsMigration.class);
+
+  private ProjectsMigration() {}
+
+  public static void migrate(configuration.StorageConfig storageConfig) {
+    var oldProjectsPath =
+        Platform.getDirectories().getUserHome().resolve("enso").resolve("projects").toFile();
+    if (oldProjectsPath.isDirectory()) {
+      try {
+        File newProjectsPath = storageConfig.userProjectsPath();
+        migrateProjectsDirectory(oldProjectsPath, newProjectsPath);
+      } catch (IOException e) {
+        logger.error("Migration aborted. Failed to get user documents directory.", e);
+      }
+    }
+  }
+
+  static void migrateProjectsDirectory(File oldProjectsPath, File newProjectsPath) {
+    if (oldProjectsPath.isDirectory()) {
+      logger.info(
+          "Running projects migration from '{}' to '{}'.", oldProjectsPath, newProjectsPath);
+      if (newProjectsPath.isDirectory()) {
+        try {
+          logger.info(
+              "Both '{}' and '{}' project directories exist. Cleaning up.",
+              oldProjectsPath,
+              newProjectsPath);
+          FileUtils.deleteDirectory(oldProjectsPath);
+          return;
+        } catch (IOException e) {
+          logger.error(
+              "Both '{}' and '{}' project directories exist. Failed to clean up.",
+              oldProjectsPath,
+              newProjectsPath,
+              e);
+          return;
+        }
+      }
+
+      try {
+        logger.info(
+            "Moving projects directory from '{}' to '{}'.", oldProjectsPath, newProjectsPath);
+        moveDirectory(oldProjectsPath, newProjectsPath);
+      } catch (IOException ex) {
+        logger.error("Migration aborted. Failed to copy user projects directory.", ex);
+        return;
+      }
+
+      if (!Platform.isWindows()) {
+        try {
+          logger.info("Setting projects directory permissions '{}'.", newProjectsPath);
+          setProjectsDirectoryPermissions(newProjectsPath);
+        } catch (IOException ex) {
+          logger.error(
+              "Failed to set permissions on projects directory '{}'.", newProjectsPath, ex);
+          return;
+        }
+      }
+
+      logger.info("Projects migration successful.");
+    }
+  }
+
+  /**
+   * Moves the source directory to the destination directory by renaming the source directory. If
+   * renaming is not supported by the file system or the destination directory is located on a
+   * different file system, tries to copy the source directory and then delete the source.
+   *
+   * @param source the source path
+   * @param destination the destination path
+   * @throws IOException if the moving was unsuccessful
+   */
+  static void moveDirectory(File source, File destination) throws IOException {
+    try {
+      Files.move(source.toPath(), destination.toPath(), StandardCopyOption.ATOMIC_MOVE);
+    } catch (IOException e) {
+      try {
+        FileUtils.copyDirectory(source, destination);
+      } catch (IOException ex) {
+        FileUtils.deleteQuietly(destination);
+        throw ex;
+      }
+      FileUtils.deleteDirectory(source);
+    }
+  }
+
+  /**
+   * Sets the projects directory permissions to {@code rwx------}.
+   *
+   * @param path the directory path.
+   * @throws IOException if the action is unsuccessful.
+   */
+  static void setProjectsDirectoryPermissions(File path) throws IOException {
+    Set<PosixFilePermission> permissions = new HashSet<>();
+    permissions.add(PosixFilePermission.OWNER_READ);
+    permissions.add(PosixFilePermission.OWNER_WRITE);
+    permissions.add(PosixFilePermission.OWNER_EXECUTE);
+
+    Files.setPosixFilePermissions(path.toPath(), permissions);
+  }
+}
diff --git a/lib/scala/project-manager/src/main/resources/application.conf b/lib/scala/project-manager/src/main/resources/application.conf
index f284777aa64..368c88996ca 100644
--- a/lib/scala/project-manager/src/main/resources/application.conf
+++ b/lib/scala/project-manager/src/main/resources/application.conf
@@ -119,14 +119,12 @@ project-manager {
   }
 
   storage {
-    projects-root = ${user.home}/enso
     projects-root = ${?PROJECTS_ROOT}
-    temporary-projects-path = ${project-manager.storage.projects-root}/tmp
-    user-projects-path = ${project-manager.storage.projects-root}/projects
-    tutorials-path = ${project-manager.storage.projects-root}/tutorials
-    tutorials-cache-path = ${project-manager.storage.projects-root}/.tutorials-cache
-    project-metadata-directory = ".enso"
-    project-metadata-file-name = "project.json"
+    projects-directory = "enso-projects"
+    metadata {
+      project-metadata-directory = ".enso"
+      project-metadata-file-name = "project.json"
+    }
   }
 
   timeout {
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/MainModule.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/MainModule.scala
index f612851790b..99a844cbc60 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/MainModule.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/MainModule.scala
@@ -21,10 +21,7 @@ import org.enso.projectmanager.infrastructure.languageserver.{
 }
 import org.enso.projectmanager.infrastructure.log.Slf4jLogging
 import org.enso.projectmanager.infrastructure.random.SystemGenerator
-import org.enso.projectmanager.infrastructure.repository.{
-  ProjectFileRepository,
-  ProjectFileRepositoryFactory
-}
+import org.enso.projectmanager.infrastructure.repository.ProjectFileRepositoryFactory
 import org.enso.projectmanager.infrastructure.time.RealClock
 import org.enso.projectmanager.protocol.{
   JsonRpcProtocolFactory,
@@ -74,14 +71,6 @@ class MainModule[
   lazy val projectRepositoryFactory =
     new ProjectFileRepositoryFactory[F](config.storage, clock, fileSystem, gen)
 
-  lazy val projectRepository =
-    new ProjectFileRepository[F](
-      config.storage,
-      clock,
-      fileSystem,
-      gen
-    )
-
   val distributionConfiguration = DefaultDistributionConfiguration
   val loggingService            = Logging.GlobalLoggingService
 
@@ -149,7 +138,7 @@ class MainModule[
       timeoutConfig                   = config.timeout
     )
 
-  lazy val projectsEndpoint = new ProjectsEndpoint(projectRepository)
+  lazy val projectsEndpoint = new ProjectsEndpoint(projectRepositoryFactory)
   lazy val server =
     new JsonRpcServer(
       new JsonRpcProtocolFactory,
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/ProjectManager.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/ProjectManager.scala
index 79a1be76ee9..f132d2d7a1e 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/ProjectManager.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/ProjectManager.scala
@@ -21,6 +21,7 @@ import org.enso.projectmanager.boot.configuration.{
   MainProcessConfig,
   ProjectManagerConfig
 }
+import org.enso.projectmanager.infrastructure.migration.ProjectsMigration
 import org.enso.projectmanager.protocol.JsonRpcProtocolFactory
 import org.enso.version.VersionDescription
 import org.slf4j.event.Level
@@ -53,11 +54,11 @@ object ProjectManager extends ZIOAppDefault with LazyLogging {
     new JsonRpcProtocolFactory().getProtocol()
   )
 
-  val computeThreadPool = new ScheduledThreadPoolExecutor(
+  private val computeThreadPool = new ScheduledThreadPoolExecutor(
     java.lang.Runtime.getRuntime.availableProcessors()
   )
 
-  val computeExecutionContext: ExecutionContextExecutor =
+  private val computeExecutionContext: ExecutionContextExecutor =
     ExecutionContext.fromExecutor(
       computeThreadPool,
       th => logger.error("An expected error occurred.", th)
@@ -77,6 +78,7 @@ object ProjectManager extends ZIOAppDefault with LazyLogging {
   private def mainProcess(
     processConfig: MainProcessConfig
   ): ZIO[ZAny, IOException, Unit] = {
+    ProjectsMigration.migrate(config.storage)
     val mainModule =
       new MainModule[ZIO[ZAny, +*, +*]](
         config,
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/command/ProjectListCommand.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/command/ProjectListCommand.scala
index ed8c8b006bd..92afe861541 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/command/ProjectListCommand.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/command/ProjectListCommand.scala
@@ -8,7 +8,7 @@ import org.enso.projectmanager.control.effect.{ErrorChannel, Sync}
 import org.enso.projectmanager.infrastructure.file.BlockingFileSystem
 import org.enso.projectmanager.infrastructure.random.SystemGenerator
 import org.enso.projectmanager.infrastructure.repository.{
-  ProjectFileRepository,
+  ProjectFileRepositoryFactory,
   ProjectRepository
 }
 import org.enso.projectmanager.infrastructure.time.RealClock
@@ -47,17 +47,15 @@ object ProjectListCommand {
     val clock      = new RealClock[F]
     val fileSystem = new BlockingFileSystem[F](config.timeout.ioTimeout)
     val gen        = new SystemGenerator[F]
-    val storageConfig = projectsPath.fold(config.storage)(path =>
-      config.storage.copy(userProjectsPath = path)
-    )
 
+    val projectRepositoryFactory = new ProjectFileRepositoryFactory[F](
+      config.storage,
+      clock,
+      fileSystem,
+      gen
+    )
     val projectRepository =
-      new ProjectFileRepository[F](
-        storageConfig,
-        clock,
-        fileSystem,
-        gen
-      )
+      projectRepositoryFactory.getProjectRepository(projectsPath)
 
     new ProjectListCommand[F](projectRepository, limitOpt)
   }
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/configuration.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/configuration.scala
index b60327e28b9..af220fd6481 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/configuration.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/boot/configuration.scala
@@ -1,9 +1,11 @@
 package org.enso.projectmanager.boot
 
+import org.enso.desktopenvironment.Platform
 import org.slf4j.event.Level
 
-import java.io.File
+import java.io.{File, IOException}
 import java.nio.file.Path
+
 import scala.concurrent.duration.FiniteDuration
 
 object configuration {
@@ -41,21 +43,37 @@ object configuration {
     */
   case class ServerConfig(host: String, port: Int)
 
-  /** A configuration object for properties of project storage.
+  /** A configuration object for metadata storage.
     *
-    * @param projectsRoot a project root
-    * @param userProjectsPath a user project root
-    * @param projectMetadataDirectory a directory name containing project
-    *                                 metadata
+    * @param projectMetadataDirectory a directory name containing project metadata
     * @param projectMetadataFileName a name of project metadata file
     */
-  case class StorageConfig(
-    projectsRoot: File,
-    userProjectsPath: File,
+  case class MetadataStorageConfig(
     projectMetadataDirectory: String,
     projectMetadataFileName: String
   )
 
+  /** A configuration object for properties of project storage.
+    *
+    * @param projectsRoot overrides user projects root directory
+    * @param projectsDirectory a user projects directory
+    * @param metadata a metadata storage config
+    */
+  case class StorageConfig(
+    projectsRoot: Option[File],
+    projectsDirectory: String,
+    metadata: MetadataStorageConfig
+  ) {
+
+    /** @return a path to the user projects directory. */
+    @throws[IOException]
+    def userProjectsPath: File = {
+      val projectsRootDirectory =
+        projectsRoot.getOrElse(Platform.getDirectories.getDocuments.toFile)
+      new File(projectsRootDirectory, projectsDirectory)
+    }
+  }
+
   /** A configuration object for timeout properties.
     *
     * @param ioTimeout a timeout for IO operations
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/http/ProjectsEndpoint.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/http/ProjectsEndpoint.scala
index dd8e82fc392..920050a1a58 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/http/ProjectsEndpoint.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/http/ProjectsEndpoint.scala
@@ -15,7 +15,7 @@ import org.enso.projectmanager.control.core.CovariantFlatMap
 import org.enso.projectmanager.control.core.syntax._
 import org.enso.projectmanager.control.effect.Exec
 import org.enso.projectmanager.infrastructure.repository.{
-  ProjectRepository,
+  ProjectRepositoryFactory,
   ProjectRepositoryFailure
 }
 
@@ -26,10 +26,13 @@ import scala.util.{Failure, Success}
 
 final class ProjectsEndpoint[
   F[+_, +_]: Exec: CovariantFlatMap
-](repo: ProjectRepository[F])
+](projectRepositoryFactory: ProjectRepositoryFactory[F])
     extends Endpoint
     with LazyLogging {
 
+  private val projectRepository =
+    projectRepositoryFactory.getProjectRepository(None)
+
   /** @inheritdoc */
   override def route: Route =
     projectsEndpoint
@@ -74,7 +77,7 @@ final class ProjectsEndpoint[
     projectId: UUID
   ): Future[Either[ProjectRepositoryFailure, Option[EnsoProjectArchive]]] =
     Exec[F].exec {
-      repo
+      projectRepository
         .findById(projectId)
         .map(projectOpt =>
           projectOpt.map(project =>
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/MetadataFileStorage.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/MetadataFileStorage.scala
index fd3c1a0105b..7c767ea81a8 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/MetadataFileStorage.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/MetadataFileStorage.scala
@@ -1,9 +1,8 @@
 package org.enso.projectmanager.infrastructure.repository
 
 import java.io.File
-
 import io.circe.generic.auto._
-import org.enso.projectmanager.boot.configuration.StorageConfig
+import org.enso.projectmanager.boot.configuration.MetadataStorageConfig
 import org.enso.projectmanager.control.core.CovariantFlatMap
 import org.enso.projectmanager.control.core.syntax._
 import org.enso.projectmanager.control.effect.syntax._
@@ -27,7 +26,7 @@ import shapeless.{Coproduct, Inl, Inr}
 /** File based implementation of the project metadata storage.
   *
   * @param directory a project directory
-  * @param storageConfig a storage config
+  * @param metadataStorageConfig a metadata storage config
   * @param clock a clock
   * @param fileSystem a file system abstraction
   * @param gen a random generator
@@ -36,7 +35,7 @@ final class MetadataFileStorage[
   F[+_, +_]: ErrorChannel: CovariantFlatMap
 ](
   directory: File,
-  storageConfig: StorageConfig,
+  metadataStorageConfig: MetadataStorageConfig,
   clock: Clock[F],
   fileSystem: FileSystem[F],
   gen: Generator[F]
@@ -89,8 +88,8 @@ final class MetadataFileStorage[
     new File(
       project,
       new File(
-        storageConfig.projectMetadataDirectory,
-        storageConfig.projectMetadataFileName
+        metadataStorageConfig.projectMetadataDirectory,
+        metadataStorageConfig.projectMetadataFileName
       ).toString
     )
 }
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepository.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepository.scala
index e3a79c2184b..08b5bb934bc 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepository.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepository.scala
@@ -4,9 +4,8 @@ import java.io.File
 import java.nio.file.Path
 import java.nio.file.attribute.FileTime
 import java.util.UUID
-
 import org.enso.pkg.{Package, PackageManager}
-import org.enso.projectmanager.boot.configuration.StorageConfig
+import org.enso.projectmanager.boot.configuration.MetadataStorageConfig
 import org.enso.projectmanager.control.core.{
   Applicative,
   CovariantFlatMap,
@@ -31,7 +30,7 @@ import org.enso.projectmanager.model.{Project, ProjectMetadata}
 
 /** File based implementation of the project repository.
   *
-  * @param storageConfig a storage config
+  * @param metadataStorageConfig a metadata storage config
   * @param clock a clock
   * @param fileSystem a file system abstraction
   * @param gen a random generator
@@ -39,7 +38,8 @@ import org.enso.projectmanager.model.{Project, ProjectMetadata}
 class ProjectFileRepository[
   F[+_, +_]: Sync: ErrorChannel: CovariantFlatMap: Applicative
 ](
-  storageConfig: StorageConfig,
+  projectsPath: File,
+  metadataStorageConfig: MetadataStorageConfig,
   clock: Clock[F],
   fileSystem: FileSystem[F],
   gen: Generator[F]
@@ -60,7 +60,7 @@ class ProjectFileRepository[
   /** @inheritdoc */
   override def getAll(): F[ProjectRepositoryFailure, List[Project]] = {
     fileSystem
-      .list(storageConfig.userProjectsPath)
+      .list(projectsPath)
       .map(_.filter(_.isDirectory))
       .recover { case FileNotFound | NotDirectory =>
         Nil
@@ -243,7 +243,7 @@ class ProjectFileRepository[
 
     for {
       project <- getProject(projectId)
-      primaryPath = new File(storageConfig.userProjectsPath, newName)
+      primaryPath = new File(projectsPath, newName)
       finalPath <-
         if (isLocationOk(project.path, primaryPath)) {
           CovariantFlatMap[F].pure(primaryPath)
@@ -283,7 +283,7 @@ class ProjectFileRepository[
       .tailRecM[ProjectRepositoryFailure, Int, File](0) { number =>
         val path =
           new File(
-            storageConfig.userProjectsPath,
+            projectsPath,
             moduleName + genSuffix(number)
           )
         fileSystem
@@ -307,7 +307,7 @@ class ProjectFileRepository[
   private def metadataStorage(projectPath: File): MetadataFileStorage[F] =
     new MetadataFileStorage[F](
       projectPath,
-      storageConfig,
+      metadataStorageConfig,
       clock,
       fileSystem,
       gen
diff --git a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepositoryFactory.scala b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepositoryFactory.scala
index e3d764373b1..d29f5610561 100644
--- a/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepositoryFactory.scala
+++ b/lib/scala/project-manager/src/main/scala/org/enso/projectmanager/infrastructure/repository/ProjectFileRepositoryFactory.scala
@@ -21,9 +21,14 @@ class ProjectFileRepositoryFactory[
   override def getProjectRepository(
     projectsDirectory: Option[File]
   ): ProjectRepository[F] = {
-    val config = projectsDirectory.fold(storageConfig)(dir =>
-      storageConfig.copy(userProjectsPath = dir)
+    val projectsPath =
+      projectsDirectory.getOrElse(storageConfig.userProjectsPath)
+    new ProjectFileRepository[F](
+      projectsPath,
+      storageConfig.metadata,
+      clock,
+      fileSystem,
+      gen
     )
-    new ProjectFileRepository[F](config, clock, fileSystem, gen)
   }
 }
diff --git a/lib/scala/project-manager/src/test/java/org/enso/projectmanager/infrastructure/migration/ProjectsMigrationTest.java b/lib/scala/project-manager/src/test/java/org/enso/projectmanager/infrastructure/migration/ProjectsMigrationTest.java
new file mode 100644
index 00000000000..02d1651c2f9
--- /dev/null
+++ b/lib/scala/project-manager/src/test/java/org/enso/projectmanager/infrastructure/migration/ProjectsMigrationTest.java
@@ -0,0 +1,124 @@
+package org.enso.projectmanager.infrastructure.migration;
+
+import java.io.File;
+import java.io.IOException;
+import java.nio.file.Files;
+import java.nio.file.attribute.PosixFilePermissions;
+import org.apache.commons.io.FileUtils;
+import org.enso.desktopenvironment.Platform;
+import org.junit.Assert;
+import org.junit.Rule;
+import org.junit.Test;
+import org.junit.rules.TemporaryFolder;
+
+public class ProjectsMigrationTest {
+
+  @Rule public TemporaryFolder tmp = new TemporaryFolder();
+
+  @Test
+  public void moveDirectory() throws IOException {
+    File oldProjectsDir = tmp.newFolder("old-projects");
+    File newProjectsDir = new File(tmp.getRoot(), "new-projects");
+
+    File project1 = createProjectStructure(oldProjectsDir, "Project1");
+    File project2 = createProjectStructure(oldProjectsDir, "Project2");
+
+    Assert.assertTrue(oldProjectsDir.isDirectory());
+    Assert.assertTrue(project1.isDirectory());
+    Assert.assertTrue(project2.isDirectory());
+    Assert.assertFalse(newProjectsDir.isDirectory());
+
+    ProjectsMigration.moveDirectory(oldProjectsDir, newProjectsDir);
+
+    Assert.assertFalse(oldProjectsDir.isDirectory());
+    Assert.assertTrue(newProjectsDir.isDirectory());
+    Assert.assertTrue(new File(newProjectsDir, "Project1").isDirectory());
+    Assert.assertTrue(new File(newProjectsDir, "Project2").isDirectory());
+  }
+
+  @Test
+  public void setProjectDirectoryPermissions() throws IOException {
+    if (!Platform.isWindows()) {
+      File projectsDir = tmp.newFolder("projects");
+      createProjectStructure(projectsDir, "Project1");
+
+      Assert.assertTrue(projectsDir.isDirectory());
+
+      ProjectsMigration.setProjectsDirectoryPermissions(projectsDir);
+
+      var permissions = Files.getPosixFilePermissions(projectsDir.toPath());
+      Assert.assertEquals("rwx------", PosixFilePermissions.toString(permissions));
+    }
+  }
+
+  @Test
+  public void migrateProjectsDirectoryIdempotent() throws IOException {
+    File oldProjectsDir = tmp.newFolder("old-projects");
+    File newProjectsDir = new File(tmp.getRoot(), "new-projects");
+
+    File project1 = createProjectStructure(oldProjectsDir, "Project1");
+    File project2 = createProjectStructure(oldProjectsDir, "Project2");
+
+    Assert.assertTrue(oldProjectsDir.isDirectory());
+    Assert.assertTrue(project1.isDirectory());
+    Assert.assertTrue(project2.isDirectory());
+    Assert.assertFalse(newProjectsDir.isDirectory());
+
+    ProjectsMigration.migrateProjectsDirectory(oldProjectsDir, newProjectsDir);
+
+    File newProject1 = new File(newProjectsDir, "Project1");
+    File newProject2 = new File(newProjectsDir, "Project2");
+    Assert.assertFalse(oldProjectsDir.isDirectory());
+    Assert.assertTrue(newProjectsDir.isDirectory());
+    Assert.assertTrue(newProject1.isDirectory());
+    Assert.assertTrue(newProject2.isDirectory());
+
+    ProjectsMigration.migrateProjectsDirectory(oldProjectsDir, newProjectsDir);
+
+    Assert.assertFalse(oldProjectsDir.isDirectory());
+    Assert.assertTrue(newProjectsDir.isDirectory());
+    Assert.assertTrue(newProject1.isDirectory());
+    Assert.assertTrue(newProject2.isDirectory());
+  }
+
+  @Test
+  public void migrateProjectsDirectoryCleanupWhenBothExist() throws IOException {
+    File oldProjectsDir = tmp.newFolder("old-projects");
+    File newProjectsDir = new File(tmp.getRoot(), "new-projects");
+
+    File project1 = createProjectStructure(newProjectsDir, "Project1");
+    File project2 = createProjectStructure(newProjectsDir, "Project2");
+
+    Assert.assertTrue(oldProjectsDir.isDirectory());
+    Assert.assertTrue(newProjectsDir.isDirectory());
+    Assert.assertTrue(project1.isDirectory());
+    Assert.assertTrue(project2.isDirectory());
+
+    ProjectsMigration.migrateProjectsDirectory(oldProjectsDir, newProjectsDir);
+
+    Assert.assertFalse(oldProjectsDir.isDirectory());
+    Assert.assertTrue(newProjectsDir.isDirectory());
+    Assert.assertTrue(new File(newProjectsDir, "Project1").isDirectory());
+    Assert.assertTrue(new File(newProjectsDir, "Project2").isDirectory());
+  }
+
+  private static File createProjectStructure(File tmp, String name) throws IOException {
+    var projectDir = new File(tmp, name);
+    var srcDir = new File(projectDir, "src");
+    var ensoDir = new File(projectDir, ".enso");
+
+    FileUtils.forceMkdir(srcDir);
+    FileUtils.forceMkdir(ensoDir);
+
+    createNewFile(new File(projectDir, "package.yaml"));
+    createNewFile(new File(srcDir, "Main.enso"));
+
+    return projectDir;
+  }
+
+  private static void createNewFile(File file) throws IOException {
+    if (!file.createNewFile()) {
+      throw new IOException("File '" + file + "' already exists.");
+    }
+  }
+}
diff --git a/lib/scala/project-manager/src/test/resources/application-test.conf b/lib/scala/project-manager/src/test/resources/application-test.conf
index 688e6b1c3b0..fe2ecb616f9 100644
--- a/lib/scala/project-manager/src/test/resources/application-test.conf
+++ b/lib/scala/project-manager/src/test/resources/application-test.conf
@@ -56,13 +56,12 @@ project-manager {
   }
 
   storage {
-    projects-root = ${user.home}/enso
-    projects-root=${?PROJECTS_ROOT}
-    project-index-path = ${project-manager.storage.projects-root}/.enso/project-index.json
-    temporary-projects-path = ${project-manager.storage.projects-root}/tmp
-    user-projects-path = ${project-manager.storage.projects-root}/projects
-    tutorials-path = ${project-manager.storage.projects-root}/tutorials
-    tutorials-cache-path = ${project-manager.storage.projects-root}/.tutorials-cache
+    projects-root = ${?PROJECTS_ROOT}
+    projects-directory = "enso-projects"
+    metadata {
+      project-metadata-directory = ".enso"
+      project-metadata-file-name = "project.json"
+    }
   }
 
   timeout {
diff --git a/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/BaseServerSpec.scala b/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/BaseServerSpec.scala
index 1332a1018b9..277abb66ad4 100644
--- a/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/BaseServerSpec.scala
+++ b/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/BaseServerSpec.scala
@@ -108,15 +108,17 @@ class BaseServerSpec extends JsonRpcServerTestKit with BeforeAndAfterAll {
   val testDistributionRoot = Files.createTempDirectory(null).toFile
   sys.addShutdownHook(FileUtils.deleteQuietly(testDistributionRoot))
 
-  val userProjectDir = new File(testProjectsRoot, "projects")
-
   lazy val testStorageConfig = StorageConfig(
-    projectsRoot             = testProjectsRoot,
-    userProjectsPath         = userProjectDir,
-    projectMetadataDirectory = ".enso",
-    projectMetadataFileName  = "project.json"
+    projectsRoot      = Some(testProjectsRoot),
+    projectsDirectory = "enso-projects",
+    metadata = MetadataStorageConfig(
+      projectMetadataDirectory = ".enso",
+      projectMetadataFileName  = "project.json"
+    )
   )
 
+  lazy val userProjectDir = testStorageConfig.userProjectsPath
+
   lazy val bootloaderConfig = config.bootloader
 
   lazy val timeoutConfig = config.timeout
diff --git a/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/service/filesystem/FileSystemServiceSpec.scala b/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/service/filesystem/FileSystemServiceSpec.scala
index 281a9ee5b1e..8c0d67a6a85 100644
--- a/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/service/filesystem/FileSystemServiceSpec.scala
+++ b/lib/scala/project-manager/src/test/scala/org/enso/projectmanager/service/filesystem/FileSystemServiceSpec.scala
@@ -46,7 +46,7 @@ class FileSystemServiceSpec
   def metadataFileStorage(directory: File) =
     new MetadataFileStorage[ZIO[ZAny, +*, +*]](
       directory,
-      config.storage,
+      config.storage.metadata,
       testClock,
       fileSystem,
       gen