diff --git a/android/bazel_handler.go b/android/bazel_handler.go
index a1206dc53..f906c8add 100644
--- a/android/bazel_handler.go
+++ b/android/bazel_handler.go
@@ -351,6 +351,9 @@ func (r *builtinBazelRunner) issueBazelCommand(paths *bazelPaths, runName bazel.
 		"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 @@ func (p *bazelPaths) syntheticWorkspaceDir() string {
 	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 {
diff --git a/build_test.bash b/build_test.bash
index 296a79cd0..b039285ca 100755
--- a/build_test.bash
+++ b/build_test.bash
@@ -54,7 +54,7 @@ df -h
 
 echo
 echo "Running Bazel smoke test..."
-"${TOP}/tools/bazel" --batch --max_idle_secs=1 info
+STANDALONE_BAZEL=true "${TOP}/tools/bazel" --batch --max_idle_secs=1 info
 
 echo
 echo "Running Soong test..."
diff --git a/tests/mixed_mode_test.sh b/tests/mixed_mode_test.sh
index 80774bf0f..b408fd325 100755
--- a/tests/mixed_mode_test.sh
+++ b/tests/mixed_mode_test.sh
@@ -14,7 +14,7 @@ function test_bazel_smoke {
   setup
   create_mock_bazel
 
-  run_bazel info
+  STANDALONE_BAZEL=true run_bazel info
 }
 
 test_bazel_smoke