diff --git a/plugin/src/main/scala/com/here/bom/internal/IvyPomLocator.scala b/plugin/src/main/scala/com/here/bom/internal/IvyPomLocator.scala
index 08f011a..489eb5c 100644
--- a/plugin/src/main/scala/com/here/bom/internal/IvyPomLocator.scala
+++ b/plugin/src/main/scala/com/here/bom/internal/IvyPomLocator.scala
@@ -27,7 +27,8 @@ import scala.collection.JavaConverters._
 
 object IvyPomLocator {
   /*
-     Ivy internals require ivy.home to be absolute.
+     Ivy internals require ivy.home and sbt.ivy.home to be equals and have absolute path.
+     Related sbt issue: https://github.com/sbt/sbt/issues/1894
      Example of error if this doesn't hold:
 
      java.lang.IllegalArgumentException: ivy.home must be absolute: .sbt-cache/ivy2
@@ -36,16 +37,51 @@ object IvyPomLocator {
             at org.apache.ivy.core.settings.IvySettings.getDefaultCache(IvySettings.java:824)
             at org.apache.ivy.core.settings.IvySettings.getDefaultResolutionCacheBasedir(IvySettings.java:864)
             at sbt.internal.librarymanagement.IvySbt$.$anonfun$configureResolutionCache$1(Ivy.scala:582)
+
    */
   def tweakIvyHome(logger: Logger): Unit = {
-    val ivyHome = System.getProperty("ivy.home")
-    if (ivyHome != null) {
-      val absHome = new File(ivyHome).getAbsolutePath
-      if (System.setProperty("ivy.home", absHome) != absHome) {
-        logger.warn(s"Adjusting ivy.home: $ivyHome -> $absHome")
+    var sbtIvyHome = System.getProperty("sbt.ivy.home")
+    var ivyHome = System.getProperty("ivy.home")
+    if (sbtIvyHome == null && ivyHome == null)
+      return
+
+    if (sbtIvyHome != ivyHome) {
+      if (sbtIvyHome != null && ivyHome != null) {
+        logger.error(
+          s"System properties ivy.home and sbt.ivy.home have different values: $ivyHome and $sbtIvyHome. Consider use the same value"
+        )
+        throw new RuntimeException(
+          "System properties ivy.home and sbt.ivy.home must have same value"
+        )
+      } else if (sbtIvyHome != null) {
+        sbtIvyHome = convertToAbsolutePath(sbtIvyHome)
+        ivyHome = sbtIvyHome
+      } else if (ivyHome != null) {
+        ivyHome = convertToAbsolutePath(ivyHome)
+        sbtIvyHome = ivyHome
       }
+    } else {
+      sbtIvyHome = convertToAbsolutePath(sbtIvyHome)
+      ivyHome = sbtIvyHome
+    }
+    adjustSystemProperty(logger, "sbt.ivy.home", sbtIvyHome)
+    adjustSystemProperty(logger, "ivy.home", ivyHome)
+  }
+
+  private def adjustSystemProperty(
+      logger: Logger,
+      systemPropertyName: String,
+      value: String
+  ): Unit = {
+    val oldValue = System.setProperty(systemPropertyName, value)
+    if (oldValue != value) {
+      logger.warn(s"Adjusting $systemPropertyName: $oldValue -> $value")
     }
   }
+
+  private def convertToAbsolutePath(path: String): String = {
+    new File(path).getAbsolutePath
+  }
 }
 
 /**
diff --git a/plugin/src/sbt-test/psv/custom_ivy_home_config/build.sbt b/plugin/src/sbt-test/psv/custom_ivy_home_config/build.sbt
new file mode 100644
index 0000000..ed202a0
--- /dev/null
+++ b/plugin/src/sbt-test/psv/custom_ivy_home_config/build.sbt
@@ -0,0 +1,15 @@
+import Dependencies._
+import com.here.bom.Bom
+
+lazy val deps = Bom.read("com.fasterxml.jackson" % "jackson-bom" % "2.14.2")(bom => Dependencies(bom))
+
+lazy val `demo` = project
+  .in(file("."))
+  .settings(scalaVersion := "2.12.15")
+  .enablePlugins(SbtPlugin)
+  .settings(deps)
+  .settings(
+    name := "custom-ivy-home-test",
+    libraryDependencies ++= deps.key.value.dependencies,
+    resolvers := Resolver.DefaultMavenRepository +: resolvers.value
+  )
diff --git a/plugin/src/sbt-test/psv/custom_ivy_home_config/project/Dependencies.scala b/plugin/src/sbt-test/psv/custom_ivy_home_config/project/Dependencies.scala
new file mode 100644
index 0000000..eb45e13
--- /dev/null
+++ b/plugin/src/sbt-test/psv/custom_ivy_home_config/project/Dependencies.scala
@@ -0,0 +1,26 @@
+/*
+ * Copyright (C) 2019-2024 HERE Europe B.V.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ *
+ * SPDX-License-Identifier: Apache-2.0
+ * License-Filename: LICENSE
+ */
+import sbt._
+import com.here.bom.Bom
+
+case class Dependencies(platformBom: Bom) {
+  val dependencies: Seq[ModuleID] = Seq(
+    "com.fasterxml.jackson.core" % "jackson-databind" % platformBom
+  )
+}
\ No newline at end of file
diff --git a/plugin/src/sbt-test/psv/custom_ivy_home_config/project/build.properties b/plugin/src/sbt-test/psv/custom_ivy_home_config/project/build.properties
new file mode 100644
index 0000000..3161d21
--- /dev/null
+++ b/plugin/src/sbt-test/psv/custom_ivy_home_config/project/build.properties
@@ -0,0 +1 @@
+sbt.version=1.6.1
diff --git a/plugin/src/sbt-test/psv/custom_ivy_home_config/project/plugins.sbt b/plugin/src/sbt-test/psv/custom_ivy_home_config/project/plugins.sbt
new file mode 100644
index 0000000..9f738c3
--- /dev/null
+++ b/plugin/src/sbt-test/psv/custom_ivy_home_config/project/plugins.sbt
@@ -0,0 +1,7 @@
+addSbtPlugin("com.here.platform.artifact" % "sbt-resolver" % "2.0.24")
+
+sys.props.get("plugin.version") match {
+  case Some(x) => addSbtPlugin("com.here.platform" % "sbt-bom" % x)
+  case _ => sys.error("""|The system property 'plugin.version' is not defined.
+                         |Specify this property using the scriptedLaunchOpts -D.""".stripMargin)
+}
\ No newline at end of file
diff --git a/plugin/src/sbt-test/psv/custom_ivy_home_config/src/main/scala/Demo.scala b/plugin/src/sbt-test/psv/custom_ivy_home_config/src/main/scala/Demo.scala
new file mode 100644
index 0000000..6a16e7b
--- /dev/null
+++ b/plugin/src/sbt-test/psv/custom_ivy_home_config/src/main/scala/Demo.scala
@@ -0,0 +1,26 @@
+/*
+ * Copyright (C) 2019-2024 HERE Europe B.V.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ *
+ * SPDX-License-Identifier: Apache-2.0
+ * License-Filename: LICENSE
+ */
+package com.here.bom
+
+import com.fasterxml.jackson.databind.ObjectMapper
+
+object Demo extends App {
+  val mapper = new ObjectMapper()
+  println("ObjectMapper instance: " + mapper)
+}
\ No newline at end of file
diff --git a/plugin/src/sbt-test/psv/custom_ivy_home_config/test b/plugin/src/sbt-test/psv/custom_ivy_home_config/test
new file mode 100644
index 0000000..94d4f24
--- /dev/null
+++ b/plugin/src/sbt-test/psv/custom_ivy_home_config/test
@@ -0,0 +1,10 @@
+> set scriptedBufferLog := false
+> eval System.setProperty("ivy.home", "/tmp/custom-ivy-home")
+> eval System.setProperty("sbt.ivy.home", "/tmp/custom-sbt-ivy-home")
+# check that build failed for the different custom home locations
+-> reload
+> eval System.setProperty("sbt.ivy.home", "/tmp/custom-ivy-home")
+> eval System.setProperty("ivy.home", "/tmp/custom-ivy-home")
+# check that build succeeded for the same custom home locations
+> reload
+> package
\ No newline at end of file