diff --git a/.github/workflows/_build-and-test-locally.yml b/.github/workflows/_build-and-test-locally.yml
index 3f66f41ef2..f9b96271a4 100644
--- a/.github/workflows/_build-and-test-locally.yml
+++ b/.github/workflows/_build-and-test-locally.yml
@@ -313,10 +313,10 @@ jobs:
           # Use tar to copy files matching the pattern, preserving the paths in the destionation
           tar c \
             pg_install/v* \
-            pg_install/build/*/src/test/regress/*.so \
-            pg_install/build/*/src/test/regress/pg_regress \
-            pg_install/build/*/src/test/isolation/isolationtester \
-            pg_install/build/*/src/test/isolation/pg_isolation_regress \
+            build/*/src/test/regress/*.so \
+            build/*/src/test/regress/pg_regress \
+            build/*/src/test/isolation/isolationtester \
+            build/*/src/test/isolation/pg_isolation_regress \
             | tar  x -C /tmp/neon
 
       - name: Upload Neon artifact
diff --git a/.github/workflows/build-macos.yml b/.github/workflows/build-macos.yml
index 0f7fa3e813..226369de52 100644
--- a/.github/workflows/build-macos.yml
+++ b/.github/workflows/build-macos.yml
@@ -144,7 +144,7 @@ jobs:
         id: cache_walproposer_lib
         uses: actions/cache@5a3ec84eff668545956fd18022155c47e93e2684 # v4.2.3
         with:
-          path: pg_install/build/walproposer-lib
+          path: build/walproposer-lib
           key: v1-${{ runner.os }}-${{ runner.arch }}-${{ env.BUILD_TYPE }}-walproposer_lib-v17-${{ steps.pg_rev.outputs.pg_rev }}-${{ hashFiles('Makefile') }}
 
       - name: Checkout submodule vendor/postgres-v17
@@ -169,11 +169,11 @@ jobs:
         run:
           make walproposer-lib -j$(sysctl -n hw.ncpu)
 
-      - name: Upload "pg_install/build/walproposer-lib" artifact
+      - name: Upload "build/walproposer-lib" artifact
         uses: actions/upload-artifact@ea165f8d65b6e75b540449e92b4886f43607fa02 # v4.6.2
         with:
-          name: pg_install--build--walproposer-lib
-          path: pg_install/build/walproposer-lib
+          name: build--walproposer-lib
+          path: build/walproposer-lib
           # The artifact is supposed to be used by the next job in the same workflow,
           # so there’s no need to store it for too long.
           retention-days: 1
@@ -226,11 +226,11 @@ jobs:
           name: pg_install--v17
           path: pg_install/v17
 
-      - name: Download "pg_install/build/walproposer-lib" artifact
+      - name: Download "build/walproposer-lib" artifact
         uses: actions/download-artifact@d3f86a106a0bac45b974a628896c90dbdf5c8093 # v4.3.0
         with:
-          name: pg_install--build--walproposer-lib
-          path: pg_install/build/walproposer-lib
+          name: build--walproposer-lib
+          path: build/walproposer-lib
 
       # `actions/download-artifact` doesn't preserve permissions:
       # https://github.com/actions/download-artifact?tab=readme-ov-file#permission-loss
diff --git a/.gitignore b/.gitignore
index 45eb4dbf0e..70c7e96303 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,4 +1,5 @@
 /artifact_cache
+/build
 /pg_install
 /target
 /tmp_check
diff --git a/Dockerfile b/Dockerfile
index f72d7d9bbc..69657067de 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -45,7 +45,6 @@ COPY --chown=nonroot scripts/ninstall.sh scripts/ninstall.sh
 ENV BUILD_TYPE=release
 RUN set -e \
     && mold -run make -j $(nproc) -s neon-pg-ext \
-    && rm -rf pg_install/build \
     && tar -C pg_install -czf /home/nonroot/postgres_install.tar.gz .
 
 # Prepare cargo-chef recipe
diff --git a/Makefile b/Makefile
index 5130e17e59..dee50a51c1 100644
--- a/Makefile
+++ b/Makefile
@@ -1,8 +1,12 @@
 ROOT_PROJECT_DIR := $(dir $(abspath $(lastword $(MAKEFILE_LIST))))
 
-# Where to install Postgres, default is ./pg_install, maybe useful for package managers
+# Where to install Postgres, default is ./pg_install, maybe useful for package
+# managers.
 POSTGRES_INSTALL_DIR ?= $(ROOT_PROJECT_DIR)/pg_install/
 
+# All intermediate build artifacts are stored here.
+BUILD_DIR := build
+
 ICU_PREFIX_DIR := /usr/local/icu
 
 #
@@ -104,21 +108,20 @@ cargo-target-dir:
 # Some rules are duplicated for Postgres v14 and 15. We may want to refactor
 # to avoid the duplication in the future, but it's tolerable for now.
 #
-$(POSTGRES_INSTALL_DIR)/build/%/config.status:
-
-	mkdir -p $(POSTGRES_INSTALL_DIR)
-	test -e $(POSTGRES_INSTALL_DIR)/CACHEDIR.TAG || echo "$(CACHEDIR_TAG_CONTENTS)" > $(POSTGRES_INSTALL_DIR)/CACHEDIR.TAG
+$(BUILD_DIR)/%/config.status:
+	mkdir -p $(BUILD_DIR)
+	test -e $(BUILD_DIR)/CACHEDIR.TAG || echo "$(CACHEDIR_TAG_CONTENTS)" > $(BUILD_DIR)/CACHEDIR.TAG
 
 	+@echo "Configuring Postgres $* build"
 	@test -s $(ROOT_PROJECT_DIR)/vendor/postgres-$*/configure || { \
 		echo "\nPostgres submodule not found in $(ROOT_PROJECT_DIR)/vendor/postgres-$*/, execute "; \
 		echo "'git submodule update --init --recursive --depth 2 --progress .' in project root.\n"; \
 		exit 1; }
-	mkdir -p $(POSTGRES_INSTALL_DIR)/build/$*
+	mkdir -p $(BUILD_DIR)/$*
 
 	VERSION=$*; \
 	EXTRA_VERSION=$$(cd $(ROOT_PROJECT_DIR)/vendor/postgres-$$VERSION && git rev-parse HEAD); \
-	(cd $(POSTGRES_INSTALL_DIR)/build/$$VERSION && \
+	(cd $(BUILD_DIR)/$$VERSION && \
 	env PATH="$(EXTRA_PATH_OVERRIDES):$$PATH" $(ROOT_PROJECT_DIR)/vendor/postgres-$$VERSION/configure \
 		CFLAGS='$(PG_CFLAGS)' LDFLAGS='$(PG_LDFLAGS)' \
 		$(PG_CONFIGURE_OPTS) --with-extra-version=" ($$EXTRA_VERSION)" \
@@ -130,73 +133,73 @@ $(POSTGRES_INSTALL_DIR)/build/%/config.status:
 # the "build-all-versions" entry points) where direct mention of PostgreSQL
 # versions is used.
 .PHONY: postgres-configure-v17
-postgres-configure-v17: $(POSTGRES_INSTALL_DIR)/build/v17/config.status
+postgres-configure-v17: $(BUILD_DIR)/v17/config.status
 .PHONY: postgres-configure-v16
-postgres-configure-v16: $(POSTGRES_INSTALL_DIR)/build/v16/config.status
+postgres-configure-v16: $(BUILD_DIR)/v16/config.status
 .PHONY: postgres-configure-v15
-postgres-configure-v15: $(POSTGRES_INSTALL_DIR)/build/v15/config.status
+postgres-configure-v15: $(BUILD_DIR)/v15/config.status
 .PHONY: postgres-configure-v14
-postgres-configure-v14: $(POSTGRES_INSTALL_DIR)/build/v14/config.status
+postgres-configure-v14: $(BUILD_DIR)/v14/config.status
 
 # Install the PostgreSQL header files into $(POSTGRES_INSTALL_DIR)/<version>/include
 .PHONY: postgres-headers-%
 postgres-headers-%: postgres-configure-%
 	+@echo "Installing PostgreSQL $* headers"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/src/include MAKELEVEL=0 install
+	$(MAKE) -C $(BUILD_DIR)/$*/src/include MAKELEVEL=0 install
 
 # Compile and install PostgreSQL
 .PHONY: postgres-%
 postgres-%: postgres-configure-% \
 		  postgres-headers-% # to prevent `make install` conflicts with neon's `postgres-headers`
 	+@echo "Compiling PostgreSQL $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$* MAKELEVEL=0 install
+	$(MAKE) -C $(BUILD_DIR)/$* MAKELEVEL=0 install
 	+@echo "Compiling libpq $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/src/interfaces/libpq install
+	$(MAKE) -C $(BUILD_DIR)/$*/src/interfaces/libpq install
 	+@echo "Compiling pg_prewarm $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/contrib/pg_prewarm install
+	$(MAKE) -C $(BUILD_DIR)/$*/contrib/pg_prewarm install
 	+@echo "Compiling pg_buffercache $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/contrib/pg_buffercache install
+	$(MAKE) -C $(BUILD_DIR)/$*/contrib/pg_buffercache install
 	+@echo "Compiling pg_visibility $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/contrib/pg_visibility install
+	$(MAKE) -C $(BUILD_DIR)/$*/contrib/pg_visibility install
 	+@echo "Compiling pageinspect $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/contrib/pageinspect install
+	$(MAKE) -C $(BUILD_DIR)/$*/contrib/pageinspect install
 	+@echo "Compiling pg_trgm $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/contrib/pg_trgm install
+	$(MAKE) -C $(BUILD_DIR)/$*/contrib/pg_trgm install
 	+@echo "Compiling amcheck $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/contrib/amcheck install
+	$(MAKE) -C $(BUILD_DIR)/$*/contrib/amcheck install
 	+@echo "Compiling test_decoding $*"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/contrib/test_decoding install
+	$(MAKE) -C $(BUILD_DIR)/$*/contrib/test_decoding install
 
 .PHONY: postgres-check-%
 postgres-check-%: postgres-%
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$* MAKELEVEL=0 check
+	$(MAKE) -C $(BUILD_DIR)/$* MAKELEVEL=0 check
 
 .PHONY: neon-pg-ext-%
 neon-pg-ext-%: postgres-%
 	+@echo "Compiling neon $*"
-	mkdir -p $(POSTGRES_INSTALL_DIR)/build/neon-$*
+	mkdir -p $(BUILD_DIR)/neon-$*
 	$(MAKE) PG_CONFIG=$(POSTGRES_INSTALL_DIR)/$*/bin/pg_config COPT='$(COPT)' \
-		-C $(POSTGRES_INSTALL_DIR)/build/neon-$* \
+		-C $(BUILD_DIR)/neon-$* \
 		-f $(ROOT_PROJECT_DIR)/pgxn/neon/Makefile install
 	+@echo "Compiling neon_walredo $*"
-	mkdir -p $(POSTGRES_INSTALL_DIR)/build/neon-walredo-$*
+	mkdir -p $(BUILD_DIR)/neon-walredo-$*
 	$(MAKE) PG_CONFIG=$(POSTGRES_INSTALL_DIR)/$*/bin/pg_config COPT='$(COPT)' \
-		-C $(POSTGRES_INSTALL_DIR)/build/neon-walredo-$* \
+		-C $(BUILD_DIR)/neon-walredo-$* \
 		-f $(ROOT_PROJECT_DIR)/pgxn/neon_walredo/Makefile install
 	+@echo "Compiling neon_rmgr $*"
-	mkdir -p $(POSTGRES_INSTALL_DIR)/build/neon-rmgr-$*
+	mkdir -p $(BUILD_DIR)/neon-rmgr-$*
 	$(MAKE) PG_CONFIG=$(POSTGRES_INSTALL_DIR)/$*/bin/pg_config COPT='$(COPT)' \
-		-C $(POSTGRES_INSTALL_DIR)/build/neon-rmgr-$* \
+		-C $(BUILD_DIR)/neon-rmgr-$* \
 		-f $(ROOT_PROJECT_DIR)/pgxn/neon_rmgr/Makefile install
 	+@echo "Compiling neon_test_utils $*"
-	mkdir -p $(POSTGRES_INSTALL_DIR)/build/neon-test-utils-$*
+	mkdir -p $(BUILD_DIR)/neon-test-utils-$*
 	$(MAKE) PG_CONFIG=$(POSTGRES_INSTALL_DIR)/$*/bin/pg_config COPT='$(COPT)' \
-		-C $(POSTGRES_INSTALL_DIR)/build/neon-test-utils-$* \
+		-C $(BUILD_DIR)/neon-test-utils-$* \
 		-f $(ROOT_PROJECT_DIR)/pgxn/neon_test_utils/Makefile install
 	+@echo "Compiling neon_utils $*"
-	mkdir -p $(POSTGRES_INSTALL_DIR)/build/neon-utils-$*
+	mkdir -p $(BUILD_DIR)/neon-utils-$*
 	$(MAKE) PG_CONFIG=$(POSTGRES_INSTALL_DIR)/$*/bin/pg_config COPT='$(COPT)' \
-		-C $(POSTGRES_INSTALL_DIR)/build/neon-utils-$* \
+		-C $(BUILD_DIR)/neon-utils-$* \
 		-f $(ROOT_PROJECT_DIR)/pgxn/neon_utils/Makefile install
 
 # Build walproposer as a static library. walproposer source code is located
@@ -211,15 +214,15 @@ neon-pg-ext-%: postgres-%
 .PHONY: walproposer-lib
 walproposer-lib: neon-pg-ext-v17
 	+@echo "Compiling walproposer-lib"
-	mkdir -p $(POSTGRES_INSTALL_DIR)/build/walproposer-lib
+	mkdir -p $(BUILD_DIR)/walproposer-lib
 	$(MAKE) PG_CONFIG=$(POSTGRES_INSTALL_DIR)/v17/bin/pg_config COPT='$(COPT)' \
-		-C $(POSTGRES_INSTALL_DIR)/build/walproposer-lib \
+		-C $(BUILD_DIR)/walproposer-lib \
 		-f $(ROOT_PROJECT_DIR)/pgxn/neon/Makefile walproposer-lib
-	cp $(POSTGRES_INSTALL_DIR)/v17/lib/libpgport.a $(POSTGRES_INSTALL_DIR)/build/walproposer-lib
-	cp $(POSTGRES_INSTALL_DIR)/v17/lib/libpgcommon.a $(POSTGRES_INSTALL_DIR)/build/walproposer-lib
-	$(AR) d $(POSTGRES_INSTALL_DIR)/build/walproposer-lib/libpgport.a \
+	cp $(POSTGRES_INSTALL_DIR)/v17/lib/libpgport.a $(BUILD_DIR)/walproposer-lib
+	cp $(POSTGRES_INSTALL_DIR)/v17/lib/libpgcommon.a $(BUILD_DIR)/walproposer-lib
+	$(AR) d $(BUILD_DIR)/walproposer-lib/libpgport.a \
 		pg_strong_random.o
-	$(AR) d $(POSTGRES_INSTALL_DIR)/build/walproposer-lib/libpgcommon.a \
+	$(AR) d $(BUILD_DIR)/walproposer-lib/libpgcommon.a \
 		checksum_helper.o \
 		cryptohash_openssl.o \
 		hmac_openssl.o \
@@ -227,7 +230,7 @@ walproposer-lib: neon-pg-ext-v17
 		parse_manifest.o \
 		scram-common.o
 ifeq ($(UNAME_S),Linux)
-	$(AR) d $(POSTGRES_INSTALL_DIR)/build/walproposer-lib/libpgcommon.a \
+	$(AR) d $(BUILD_DIR)/walproposer-lib/libpgcommon.a \
 		pg_crc32c.o
 endif
 
@@ -272,7 +275,7 @@ fmt:
 
 postgres-%-pg-bsd-indent: postgres-%
 	+@echo "Compiling pg_bsd_indent"
-	$(MAKE) -C $(POSTGRES_INSTALL_DIR)/build/$*/src/tools/pg_bsd_indent/
+	$(MAKE) -C $(BUILD_DIR)/$*/src/tools/pg_bsd_indent/
 
 # Create typedef list for the core. Note that generally it should be combined with
 # buildfarm one to cover platform specific stuff.
@@ -291,7 +294,7 @@ postgres-%-pgindent: postgres-%-pg-bsd-indent postgres-%-typedefs.list
 	cat $(ROOT_PROJECT_DIR)/vendor/postgres-$*/src/tools/pgindent/typedefs.list |\
 		cat - postgres-$*-typedefs.list | sort | uniq > postgres-$*-typedefs-full.list
 	+@echo note: you might want to run it on selected files/dirs instead.
-	INDENT=$(POSTGRES_INSTALL_DIR)/build/$*/src/tools/pg_bsd_indent/pg_bsd_indent \
+	INDENT=$(BUILD_DIR)/$*/src/tools/pg_bsd_indent/pg_bsd_indent \
 		$(ROOT_PROJECT_DIR)/vendor/postgres-$*/src/tools/pgindent/pgindent --typedefs postgres-$*-typedefs-full.list \
 		$(ROOT_PROJECT_DIR)/vendor/postgres-$*/src/ \
 		--excludes $(ROOT_PROJECT_DIR)/vendor/postgres-$*/src/tools/pgindent/exclude_file_patterns
@@ -302,9 +305,9 @@ postgres-%-pgindent: postgres-%-pg-bsd-indent postgres-%-typedefs.list
 neon-pgindent: postgres-v17-pg-bsd-indent neon-pg-ext-v17
 	$(MAKE) PG_CONFIG=$(POSTGRES_INSTALL_DIR)/v17/bin/pg_config COPT='$(COPT)' \
 		FIND_TYPEDEF=$(ROOT_PROJECT_DIR)/vendor/postgres-v17/src/tools/find_typedef \
-		INDENT=$(POSTGRES_INSTALL_DIR)/build/v17/src/tools/pg_bsd_indent/pg_bsd_indent \
+		INDENT=$(BUILD_DIR)/v17/src/tools/pg_bsd_indent/pg_bsd_indent \
 		PGINDENT_SCRIPT=$(ROOT_PROJECT_DIR)/vendor/postgres-v17/src/tools/pgindent/pgindent \
-		-C $(POSTGRES_INSTALL_DIR)/build/neon-v17 \
+		-C $(BUILD_DIR)/neon-v17 \
 		-f $(ROOT_PROJECT_DIR)/pgxn/neon/Makefile pgindent
 
 
diff --git a/libs/walproposer/build.rs b/libs/walproposer/build.rs
index 530ceb1327..b13c8b32b4 100644
--- a/libs/walproposer/build.rs
+++ b/libs/walproposer/build.rs
@@ -13,22 +13,24 @@ fn main() -> anyhow::Result<()> {
     // Tell cargo to invalidate the built crate whenever the wrapper changes
     println!("cargo:rerun-if-changed=bindgen_deps.h");
 
+    let root_path = PathBuf::from(env!("CARGO_MANIFEST_DIR")).join("../..");
+
     // Finding the location of built libraries and Postgres C headers:
     // - if POSTGRES_INSTALL_DIR is set look into it, otherwise look into `<project_root>/pg_install`
     // - if there's a `bin/pg_config` file use it for getting include server, otherwise use `<project_root>/pg_install/{PG_MAJORVERSION}/include/postgresql/server`
     let pg_install_dir = if let Some(postgres_install_dir) = env::var_os("POSTGRES_INSTALL_DIR") {
         postgres_install_dir.into()
     } else {
-        PathBuf::from(env!("CARGO_MANIFEST_DIR")).join("../../pg_install")
+        root_path.join("pg_install")
     };
 
     let pg_install_abs = std::fs::canonicalize(pg_install_dir)?;
-    let walproposer_lib_dir = pg_install_abs.join("build/walproposer-lib");
+    let walproposer_lib_dir = root_path.join("build/walproposer-lib");
     let walproposer_lib_search_str = walproposer_lib_dir
         .to_str()
         .ok_or(anyhow!("Bad non-UTF path"))?;
 
-    let pgxn_neon = PathBuf::from(env!("CARGO_MANIFEST_DIR")).join("../../pgxn/neon");
+    let pgxn_neon = root_path.join("pgxn/neon");
     let pgxn_neon = std::fs::canonicalize(pgxn_neon)?;
     let pgxn_neon = pgxn_neon.to_str().ok_or(anyhow!("Bad non-UTF path"))?;
 
diff --git a/test_runner/regress/test_pg_regress.py b/test_runner/regress/test_pg_regress.py
index 3695ece66b..728241b465 100644
--- a/test_runner/regress/test_pg_regress.py
+++ b/test_runner/regress/test_pg_regress.py
@@ -173,7 +173,11 @@ def test_pg_regress(
     (runpath / "testtablespace").mkdir(parents=True)
 
     # Compute all the file locations that pg_regress will need.
-    build_path = pg_distrib_dir / f"build/{env.pg_version.v_prefixed}/src/test/regress"
+    #
+    # XXX: We assume that the `build` directory is a sibling of the
+    # pg_distrib_dir.  That is the default when you check out the
+    # repository; `build` and `pg_install` are created side by side.
+    build_path = pg_distrib_dir / f"../build/{env.pg_version.v_prefixed}/src/test/regress"
     src_path = base_dir / f"vendor/postgres-{env.pg_version.v_prefixed}/src/test/regress"
     bindir = pg_distrib_dir / f"v{env.pg_version}/bin"
     schedule = src_path / "parallel_schedule"
@@ -250,7 +254,11 @@ def test_isolation(
     (runpath / "testtablespace").mkdir(parents=True)
 
     # Compute all the file locations that pg_isolation_regress will need.
-    build_path = pg_distrib_dir / f"build/{env.pg_version.v_prefixed}/src/test/isolation"
+    #
+    # XXX: We assume that the `build` directory is a sibling of the
+    # pg_distrib_dir.  That is the default when you check out the
+    # repository; `build` and `pg_install` are created side by side.
+    build_path = pg_distrib_dir / f"../build/{env.pg_version.v_prefixed}/src/test/isolation"
     src_path = base_dir / f"vendor/postgres-{env.pg_version.v_prefixed}/src/test/isolation"
     bindir = pg_distrib_dir / f"v{env.pg_version}/bin"
     schedule = src_path / "isolation_schedule"
@@ -314,8 +322,11 @@ def test_sql_regress(
     (runpath / "testtablespace").mkdir(parents=True)
 
     # Compute all the file locations that pg_regress will need.
-    # This test runs neon specific tests
-    build_path = pg_distrib_dir / f"build/v{env.pg_version}/src/test/regress"
+    #
+    # XXX: We assume that the `build` directory is a sibling of the
+    # pg_distrib_dir.  That is the default when you check out the
+    # repository; `build` and `pg_install` are created side by side.
+    build_path = pg_distrib_dir / f"../build/{env.pg_version.v_prefixed}/src/test/regress"
     src_path = base_dir / "test_runner/sql_regress"
     bindir = pg_distrib_dir / f"v{env.pg_version}/bin"
     schedule = src_path / "parallel_schedule"