diff --git a/packages/schematics/angular/application/files/common-files/tsconfig.app.json.template b/packages/schematics/angular/application/files/common-files/tsconfig.app.json.template
index 12de92966bbb..d4018062fd8c 100644
--- a/packages/schematics/angular/application/files/common-files/tsconfig.app.json.template
+++ b/packages/schematics/angular/application/files/common-files/tsconfig.app.json.template
@@ -3,7 +3,6 @@
 {
   "extends": "<%= relativePathToWorkspaceRoot %>/tsconfig.json",
   "compilerOptions": {
-    "outDir": "<%= relativePathToWorkspaceRoot %>/out-tsc/app",
     "types": []
   },
   "include": [
diff --git a/packages/schematics/angular/application/index_spec.ts b/packages/schematics/angular/application/index_spec.ts
index 0fe4d142dc4a..961e4f9d294f 100644
--- a/packages/schematics/angular/application/index_spec.ts
+++ b/packages/schematics/angular/application/index_spec.ts
@@ -94,10 +94,12 @@ describe('Application Schematic', () => {
     const tree = await schematicRunner.runSchematic('application', defaultOptions, workspaceTree);
 
     const {
+      compilerOptions,
       include,
       exclude,
       extends: _extends,
     } = readJsonFile(tree, '/projects/foo/tsconfig.app.json');
+    expect(compilerOptions.outDir).toBeUndefined();
     expect(include).toEqual(['src/**/*.ts']);
     expect(exclude).toEqual(['src/**/*.spec.ts']);
     expect(_extends).toBe('../../tsconfig.json');