diff --git a/android/bazel_handler.go b/android/bazel_handler.go
index a1206dc..f906c8a 100644
--- a/android/bazel_handler.go
+++ b/android/bazel_handler.go
@@ -351,6 +351,9 @@
 		"HOME="+paths.homeDir,
 		pwdPrefix(),
 		"BUILD_DIR="+absolutePath(paths.buildDir),
+		// Make OUT_DIR absolute here so tools/bazel.sh uses the correct
+		// OUT_DIR at <root>/out, instead of <root>/out/soong/workspace/out.
+		"OUT_DIR="+absolutePath(paths.outDir()),
 		// Disables local host detection of gcc; toolchain information is defined
 		// explicitly in BUILD files.
 		"BAZEL_DO_NOT_DETECT_CPP_TOOLCHAIN=1")
@@ -576,6 +579,11 @@
 	return filepath.Join(p.buildDir, "workspace")
 }
 
+// Returns the path to the top level out dir ($OUT_DIR).
+func (p *bazelPaths) outDir() string {
+	return filepath.Dir(p.buildDir)
+}
+
 // Issues commands to Bazel to receive results for all cquery requests
 // queued in the BazelContext.
 func (context *bazelContext) InvokeBazel() error {