diff --git a/gns3server/modules/project.py b/gns3server/modules/project.py
index b3ba2c99..8fa0dc85 100644
--- a/gns3server/modules/project.py
+++ b/gns3server/modules/project.py
@@ -170,7 +170,7 @@ class Project:
         :returns: A string with a VM working directory
         """
 
-        workdir = os.path.join(self._path, vm.manager.module_name.lower(), vm.id)
+        workdir = os.path.join(self._path, 'project-files', vm.manager.module_name.lower(), vm.id)
         try:
             os.makedirs(workdir, exist_ok=True)
         except OSError as e:
diff --git a/tests/modules/test_project.py b/tests/modules/test_project.py
index b2ce3466..d410da31 100644
--- a/tests/modules/test_project.py
+++ b/tests/modules/test_project.py
@@ -115,8 +115,8 @@ def test_json(tmpdir):
 def test_vm_working_directory(tmpdir, vm):
     with patch("gns3server.config.Config.get_section_config", return_value={"local": True}):
         p = Project(location=str(tmpdir))
+        assert p.vm_working_directory(vm) == os.path.join(str(tmpdir), p.id, 'project-files', vm.module_name, vm.id)
         assert os.path.exists(p.vm_working_directory(vm))
-        assert os.path.exists(os.path.join(str(tmpdir), p.id, vm.module_name, vm.id))
 
 
 def test_mark_vm_for_destruction(vm):