diff --git a/e2e/node/src/node-ts-solution.test.ts b/e2e/node/src/node-ts-solution.test.ts
index ec15e7a5aa..4323815b3c 100644
--- a/e2e/node/src/node-ts-solution.test.ts
+++ b/e2e/node/src/node-ts-solution.test.ts
@@ -49,8 +49,8 @@ describe('Node Applications', () => {
     updateFile(`apps/${nodeapp}/src/main.ts`, `console.log('Hello World!');`);
     runCLI(`build ${nodeapp}`);
 
-    checkFilesExist(`dist/apps/${nodeapp}/main.js`);
-    const result = execSync(`node dist/apps/${nodeapp}/main.js`, {
+    checkFilesExist(`apps/${nodeapp}/dist/main.js`);
+    const result = execSync(`node apps/${nodeapp}/dist/main.js`, {
       cwd: tmpProjPath(),
     }).toString();
     expect(result).toContain('Hello World!');
@@ -144,7 +144,7 @@ describe('Node Applications', () => {
     expect(() => runCLI(`test ${nestapp}`)).not.toThrow();
 
     runCLI(`build ${nestapp}`);
-    checkFilesExist(`dist/apps/${nestapp}/main.js`);
+    checkFilesExist(`apps/${nestapp}/dist/main.js`);
 
     const p = await runCommandUntil(
       `serve ${nestapp}`,
diff --git a/packages/express/src/generators/application/application.spec.ts b/packages/express/src/generators/application/application.spec.ts
index a9fd9acb39..c2ce54def5 100644
--- a/packages/express/src/generators/application/application.spec.ts
+++ b/packages/express/src/generators/application/application.spec.ts
@@ -202,7 +202,7 @@ describe('app', () => {
                   ],
                   "compiler": "tsc",
                   "main": "myapp/src/main.ts",
-                  "outputPath": "dist/myapp",
+                  "outputPath": "myapp/dist",
                   "target": "node",
                   "tsConfig": "myapp/tsconfig.app.json",
                   "webpackConfig": "myapp/webpack.config.js",
diff --git a/packages/node/src/generators/application/application.spec.ts b/packages/node/src/generators/application/application.spec.ts
index 185920fa48..c0b2b702b2 100644
--- a/packages/node/src/generators/application/application.spec.ts
+++ b/packages/node/src/generators/application/application.spec.ts
@@ -775,5 +775,67 @@ describe('app', () => {
         "
       `);
     });
+
+    it('should configure webpack correctly with the output contained within the project root', async () => {
+      await applicationGenerator(tree, {
+        directory: 'apps/my-app',
+        bundler: 'webpack',
+        addPlugin: true,
+        skipFormat: true,
+      });
+
+      expect(tree.read('apps/my-app/webpack.config.js', 'utf-8'))
+        .toMatchInlineSnapshot(`
+        "const { NxAppWebpackPlugin } = require('@nx/webpack/app-plugin');
+        const { join } = require('path');
+
+        module.exports = {
+          output: {
+            path: join(__dirname, 'dist'),
+          },
+          plugins: [
+            new NxAppWebpackPlugin({
+              target: 'node',
+              compiler: 'tsc',
+              main: './src/main.ts',
+              tsConfig: './tsconfig.app.json',
+              assets: ["./src/assets"],
+              optimization: false,
+              outputHashing: 'none',
+              generatePackageJson: true,
+            })
+          ],
+        };
+        "
+      `);
+    });
+
+    it('should configure webpack build task correctly with the output contained within the project root', async () => {
+      await applicationGenerator(tree, {
+        directory: 'apps/my-app',
+        bundler: 'webpack',
+        addPlugin: false,
+        skipFormat: true,
+      });
+
+      expect(
+        readProjectConfiguration(tree, 'my-app').targets.build.options
+          .outputPath
+      ).toBe('apps/my-app/dist');
+    });
+
+    it('should configure esbuild build task correctly with the output contained within the project root', async () => {
+      await applicationGenerator(tree, {
+        directory: 'apps/my-app',
+        bundler: 'esbuild',
+        addPlugin: false,
+        skipFormat: true,
+      });
+
+      expect(
+        readProjectConfiguration(tree, 'my-app').targets.build.options
+          .outputPath
+      ).toBe('apps/my-app/dist');
+    });
   });
 });
diff --git a/packages/node/src/generators/application/application.ts b/packages/node/src/generators/application/application.ts
index bf96a69dcb..79f7fa6b0b 100644
--- a/packages/node/src/generators/application/application.ts
+++ b/packages/node/src/generators/application/application.ts
@@ -246,7 +246,13 @@ function addAppFiles(tree: Tree, options: NormalizedSchema) {
       ),
       webpackPluginOptions: hasWebpackPlugin(tree)
         ? {
-            outputPath: options.outputPath,
+            outputPath: options.isUsingTsSolutionConfig
+              ? 'dist'
+              : joinPathFragments(
+                  offsetFromRoot(options.appProjectRoot),
+                  'dist',
+                  options.rootProject ? options.name : options.appProjectRoot
+                ),
             main: './src/main' + (options.js ? '.js' : '.ts'),
             tsConfig: './tsconfig.app.json',
             assets: ['./src/assets'],
@@ -650,10 +656,12 @@ async function normalizeOptions(
     unitTestRunner: options.unitTestRunner ?? 'jest',
     rootProject: options.rootProject ?? false,
     port: options.port ?? 3000,
-    outputPath: joinPathFragments(
-      'dist',
-      options.rootProject ? options.name : appProjectRoot
-    ),
+    outputPath: isUsingTsSolutionConfig
+      ? joinPathFragments(appProjectRoot, 'dist')
+      : joinPathFragments(
+          'dist',
+          options.rootProject ? options.name : appProjectRoot
+        ),
     isUsingTsSolutionConfig,
     swcJest,
   };
diff --git a/packages/node/src/generators/application/files/common/webpack.config.js__tmpl__ b/packages/node/src/generators/application/files/common/webpack.config.js__tmpl__
index 77ab0d9c05..bbd7a45077 100644
--- a/packages/node/src/generators/application/files/common/webpack.config.js__tmpl__
+++ b/packages/node/src/generators/application/files/common/webpack.config.js__tmpl__
@@ -4,7 +4,7 @@ const { join } = require('path');
 
 module.exports = {
   output: {
-    path: join(__dirname, '<%= offset %><%= webpackPluginOptions.outputPath %>'),
+    path: join(__dirname, '<%= webpackPluginOptions.outputPath %>'),
   },
   plugins: [
     new NxAppWebpackPlugin({
diff --git a/packages/react/src/generators/application/application.spec.ts b/packages/react/src/generators/application/application.spec.ts
index 01177ceaff..67dee48993 100644
--- a/packages/react/src/generators/application/application.spec.ts
+++ b/packages/react/src/generators/application/application.spec.ts
@@ -5,6 +5,7 @@ import {
   ProjectGraph,
   readJson,
   readNxJson,
+  readProjectConfiguration,
   Tree,
   updateJson,
   updateNxJson,
@@ -1554,6 +1555,92 @@ describe('app', () => {
         'packages/shared/*',
       ]);
     });
+
+    it('should configure webpack correctly with the output contained within the project root', async () => {
+      await applicationGenerator(appTree, {
+        directory: 'apps/my-app',
+        bundler: 'webpack',
+        linter: Linter.EsLint,
+        style: 'none',
+        e2eTestRunner: 'none',
+        addPlugin: true,
+        skipFormat: true,
+      });
+
+      expect(appTree.read('apps/my-app/webpack.config.js', 'utf-8'))
+        .toMatchInlineSnapshot(`
+        "const { NxAppWebpackPlugin } = require('@nx/webpack/app-plugin');
+        const { NxReactWebpackPlugin } = require('@nx/react/webpack-plugin');
+        const { join } = require('path');
+
+        module.exports = {
+          output: {
+            path: join(__dirname, 'dist'),
+          },
+          devServer: {
+            port: 4200,
+            historyApiFallback: {
+              index: '/index.html',
+              disableDotRule: true,
+              htmlAcceptHeaders: ['text/html', 'application/xhtml+xml'],
+            },
+          },
+          plugins: [
+            new NxAppWebpackPlugin({
+              tsConfig: './tsconfig.app.json',
+              compiler: 'babel',
+              main: './src/main.tsx',
+              index: './src/index.html',
+              baseHref: '/',
+              assets: ["./src/favicon.ico","./src/assets"],
+              styles: [],
+              outputHashing: process.env['NODE_ENV'] === 'production' ? 'all' : 'none',
+              optimization: process.env['NODE_ENV'] === 'production',
+            }),
+            new NxReactWebpackPlugin({
+              // Uncomment this line if you don't want to use SVGR
+              // See: https://react-svgr.com/
+              // svgr: false
+            }),
+          ],
+        };
+        "
+      `);
+    });
+
+    it('should configure webpack build task correctly with the output contained within the project root', async () => {
+      await applicationGenerator(appTree, {
+        directory: 'apps/my-app',
+        bundler: 'webpack',
+        linter: Linter.EsLint,
+        style: 'none',
+        e2eTestRunner: 'none',
+        addPlugin: false,
+        skipFormat: true,
+      });
+
+      expect(
+        readProjectConfiguration(appTree, '@proj/my-app').targets.build.options
+          .outputPath
+      ).toBe('apps/my-app/dist');
+    });
+
+    it('should configure rspack build task correctly with the output contained within the project root', async () => {
+      await applicationGenerator(appTree, {
+        directory: 'apps/my-app',
+        bundler: 'rspack',
+        linter: Linter.EsLint,
+        style: 'none',
+        e2eTestRunner: 'none',
+        addPlugin: true,
+        skipFormat: true,
+      });
+
+      expect(
+        readProjectConfiguration(appTree, '@proj/my-app').targets.build.options
+          .outputPath
+      ).toBe('apps/my-app/dist');
+    });
   });
 
   describe('--bundler=rsbuild', () => {
diff --git a/packages/react/src/generators/application/files/base-rspack/rspack.config.js__tmpl__ b/packages/react/src/generators/application/files/base-rspack/rspack.config.js__tmpl__
index 7d59123572..b6fc7fad8b 100644
--- a/packages/react/src/generators/application/files/base-rspack/rspack.config.js__tmpl__
+++ b/packages/react/src/generators/application/files/base-rspack/rspack.config.js__tmpl__
@@ -5,7 +5,7 @@ const { join } = require('path');
 
 module.exports = {
   output: {
-    path: join(__dirname, '<%= offsetFromRoot %><%= rspackPluginOptions.outputPath %>'),
+    path: join(__dirname, '<%= rspackPluginOptions.outputPath %>'),
   },
   devServer: {
     port: 4200,
diff --git a/packages/react/src/generators/application/files/base-webpack/webpack.config.js__tmpl__ b/packages/react/src/generators/application/files/base-webpack/webpack.config.js__tmpl__
index d5b037cf0c..8da4f74349 100644
--- a/packages/react/src/generators/application/files/base-webpack/webpack.config.js__tmpl__
+++ b/packages/react/src/generators/application/files/base-webpack/webpack.config.js__tmpl__
@@ -5,7 +5,7 @@ const { join } = require('path');
 
 module.exports = {
   output: {
-    path: join(__dirname, '<%= offsetFromRoot %><%= webpackPluginOptions.outputPath %>'),
+    path: join(__dirname, '<%= webpackPluginOptions.outputPath %>'),
   },
   devServer: {
     port: 4200,
diff --git a/packages/react/src/generators/application/lib/add-project.ts b/packages/react/src/generators/application/lib/add-project.ts
index 8dfa4e2cef..675da5d2a0 100644
--- a/packages/react/src/generators/application/lib/add-project.ts
+++ b/packages/react/src/generators/application/lib/add-project.ts
@@ -5,12 +5,12 @@ import {
   ProjectConfiguration,
   TargetConfiguration,
   Tree,
+  updateProjectConfiguration,
   writeJson,
 } from '@nx/devkit';
 import { hasWebpackPlugin } from '../../../utils/has-webpack-plugin';
 import { maybeJs } from '../../../utils/maybe-js';
 import { hasRspackPlugin } from '../../../utils/has-rspack-plugin';
-import { getImportPath } from '@nx/js/src/utils/get-import-path';
 
 export function addProject(host: Tree, options: NormalizedSchema) {
   const project: ProjectConfiguration = {
@@ -43,11 +43,6 @@ export function addProject(host: Tree, options: NormalizedSchema) {
       name: options.projectName,
       version: '0.0.1',
       private: true,
-      nx: options.parsedTags?.length
-        ? {
-            tags: options.parsedTags,
-          }
-        : undefined,
     });
   }
 
@@ -55,6 +50,16 @@ export function addProject(host: Tree, options: NormalizedSchema) {
     addProjectConfiguration(host, options.projectName, {
       ...project,
     });
+  } else if (
+    options.parsedTags?.length ||
+    Object.keys(project.targets).length
+  ) {
+    const updatedProject: ProjectConfiguration = {
+      root: options.appProjectRoot,
+      targets: project.targets,
+      tags: options.parsedTags?.length ? options.parsedTags : undefined,
+    };
+    updateProjectConfiguration(host, options.projectName, updatedProject);
   }
 }
 
@@ -66,7 +71,14 @@ function createRspackBuildTarget(
     outputs: ['{options.outputPath}'],
     defaultConfiguration: 'production',
     options: {
-      outputPath: joinPathFragments('dist', options.appProjectRoot),
+      outputPath: options.isUsingTsSolutionConfig
+        ? joinPathFragments(options.appProjectRoot, 'dist')
+        : joinPathFragments(
+            'dist',
+            options.appProjectRoot !== '.'
+              ? options.appProjectRoot
+              : options.projectName
+          ),
       index: joinPathFragments(options.appProjectRoot, 'src/index.html'),
       baseHref: '/',
       main: joinPathFragments(
@@ -139,12 +151,14 @@ function createBuildTarget(options: NormalizedSchema): TargetConfiguration {
     defaultConfiguration: 'production',
     options: {
       compiler: options.compiler ?? 'babel',
-      outputPath: joinPathFragments(
-        'dist',
-        options.appProjectRoot != '.'
-          ? options.appProjectRoot
-          : options.projectName
-      ),
+      outputPath: options.isUsingTsSolutionConfig
+        ? joinPathFragments(options.appProjectRoot, 'dist')
+        : joinPathFragments(
+            'dist',
+            options.appProjectRoot !== '.'
+              ? options.appProjectRoot
+              : options.projectName
+          ),
       index: joinPathFragments(options.appProjectRoot, 'src/index.html'),
       baseHref: '/',
       main: joinPathFragments(
diff --git a/packages/react/src/generators/application/lib/create-application-files.ts b/packages/react/src/generators/application/lib/create-application-files.ts
index 5935b106da..54c1bf8559 100644
--- a/packages/react/src/generators/application/lib/create-application-files.ts
+++ b/packages/react/src/generators/application/lib/create-application-files.ts
@@ -86,7 +86,10 @@ export async function createApplicationFiles(
       {
         ...templateVariables,
         webpackPluginOptions: hasWebpackPlugin(host)
-          ? createNxWebpackPluginOptions(options)
+          ? createNxWebpackPluginOptions(
+              options,
+              templateVariables.offsetFromRoot
+            )
           : null,
       }
     );
@@ -151,7 +154,10 @@ export async function createApplicationFiles(
       {
         ...templateVariables,
         rspackPluginOptions: hasRspackPlugin(host)
-          ? createNxRspackPluginOptions(options)
+          ? createNxRspackPluginOptions(
+              options,
+              templateVariables.offsetFromRoot
+            )
           : null,
       }
     );
@@ -211,17 +217,21 @@ export async function createApplicationFiles(
 }
 
 function createNxWebpackPluginOptions(
-  options: NormalizedSchema
+  options: NormalizedSchema,
+  rootOffset: string
 ): WithNxOptions & WithReactOptions {
   return {
     target: 'web',
     compiler: options.compiler ?? 'babel',
-    outputPath: joinPathFragments(
-      'dist',
-      options.appProjectRoot != '.'
-        ? options.appProjectRoot
-        : options.projectName
-    ),
+    outputPath: options.isUsingTsSolutionConfig
+      ? 'dist'
+      : joinPathFragments(
+          rootOffset,
+          'dist',
+          options.appProjectRoot != '.'
+            ? options.appProjectRoot
+            : options.projectName
+        ),
     index: './src/index.html',
     baseHref: '/',
     main: maybeJs(
@@ -245,16 +255,20 @@ function createNxWebpackPluginOptions(
 }
 
 function createNxRspackPluginOptions(
-  options: NormalizedSchema
+  options: NormalizedSchema,
+  rootOffset: string
 ): WithNxOptions & WithReactOptions {
   return {
     target: 'web',
-    outputPath: joinPathFragments(
-      'dist',
-      options.appProjectRoot != '.'
-        ? options.appProjectRoot
-        : options.projectName
-    ),
+    outputPath: options.isUsingTsSolutionConfig
+      ? 'dist'
+      : joinPathFragments(
+          rootOffset,
+          'dist',
+          options.appProjectRoot != '.'
+            ? options.appProjectRoot
+            : options.projectName
+        ),
     index: './src/index.html',
     baseHref: '/',
     main: maybeJs(
diff --git a/packages/rspack/src/utils/generator-utils.ts b/packages/rspack/src/utils/generator-utils.ts
index 575291ff67..fa694b1752 100644
--- a/packages/rspack/src/utils/generator-utils.ts
+++ b/packages/rspack/src/utils/generator-utils.ts
@@ -9,6 +9,7 @@ import {
   updateProjectConfiguration,
 } from '@nx/devkit';
 import { ensureTypescript } from '@nx/js/src/utils/typescript/ensure-typescript';
+import { isUsingTsSolutionSetup } from '@nx/js/src/utils/typescript/ts-solution-setup';
 import { type RspackExecutorSchema } from '../executors/rspack/schema';
 import { type ConfigurationSchema } from '../generators/configuration/schema';
 import { type Framework } from '../generators/init/schema';
@@ -171,13 +172,17 @@ export function addOrChangeBuildTarget(
     assets.push(joinPathFragments(project.root, 'src/assets'));
   }
 
+  const isTsSolutionSetup = isUsingTsSolutionSetup(tree);
+
   const buildOptions: RspackExecutorSchema = {
     target: options.target ?? 'web',
-    outputPath: joinPathFragments(
-      'dist',
-      // If standalone project then use the project's name in dist.
-      project.root === '.' ? project.name : project.root
-    ),
+    outputPath: isTsSolutionSetup
+      ? joinPathFragments(project.root, 'dist')
+      : joinPathFragments(
+          'dist',
+          // If standalone project then use the project's name in dist.
+          project.root === '.' ? project.name : project.root
+        ),
     index: joinPathFragments(project.root, 'src/index.html'),
     main: determineMain(tree, options),
     tsConfig: determineTsConfig(tree, options),
diff --git a/packages/web/src/generators/application/application.spec.ts b/packages/web/src/generators/application/application.spec.ts
index 4e72714bfb..e5fdf3356b 100644
--- a/packages/web/src/generators/application/application.spec.ts
+++ b/packages/web/src/generators/application/application.spec.ts
@@ -697,6 +697,48 @@ describe('app', () => {
     });
   });
 
+  describe('--bundler=webpack', () => {
+    it('should configure webpack correctly', async () => {
+      await applicationGenerator(tree, {
+        directory: 'apps/my-app',
+        bundler: 'webpack',
+        addPlugin: true,
+        skipFormat: true,
+      });
+
+      expect(tree.read('apps/my-app/webpack.config.js', 'utf-8'))
+        .toMatchInlineSnapshot(`
+        "
+        const { NxAppWebpackPlugin } = require('@nx/webpack/app-plugin');
+        const { join } = require('path');
+
+        module.exports = {
+          output: {
+            path: join(__dirname, '../../dist/apps/my-app'),
+          },
+          devServer: {
+            port: 4200
+          },
+          plugins: [
+            new NxAppWebpackPlugin({
+              tsConfig: './tsconfig.app.json',
+              compiler: 'babel',
+              main: './src/main.ts',
+              index: './src/index.html',
+              baseHref: '/',
+              assets: ["./src/favicon.ico","./src/assets"],
+              styles: ["./src/styles.css"],
+              outputHashing: process.env['NODE_ENV'] === 'production' ? 'all' : 'none',
+              optimization: process.env['NODE_ENV'] === 'production',
+            })
+          ],
+        };
+
+        "
+      `);
+    });
+  });
+
   describe('TS solution setup', () => {
     beforeEach(() => {
       tree = createTreeWithEmptyWorkspace();
@@ -852,5 +894,45 @@ describe('app', () => {
         }
       `);
     });
+
+    it('should configure webpack correctly with the output contained within the project root', async () => {
+      await applicationGenerator(tree, {
+        directory: 'apps/my-app',
+        bundler: 'webpack',
+        addPlugin: true,
+        skipFormat: true,
+      });
+
+      expect(tree.read('apps/my-app/webpack.config.js', 'utf-8'))
+        .toMatchInlineSnapshot(`
+        "
+        const { NxAppWebpackPlugin } = require('@nx/webpack/app-plugin');
+        const { join } = require('path');
+
+        module.exports = {
+          output: {
+            path: join(__dirname, 'dist'),
+          },
+          devServer: {
+            port: 4200
+          },
+          plugins: [
+            new NxAppWebpackPlugin({
+              tsConfig: './tsconfig.app.json',
+              compiler: 'babel',
+              main: './src/main.ts',
+              index: './src/index.html',
+              baseHref: '/',
+              assets: ["./src/favicon.ico","./src/assets"],
+              styles: ["./src/styles.css"],
+              outputHashing: process.env['NODE_ENV'] === 'production' ? 'all' : 'none',
+              optimization: process.env['NODE_ENV'] === 'production',
+            })
+          ],
+        };
+
+        "
+      `);
+    });
   });
 });
diff --git a/packages/web/src/generators/application/application.ts b/packages/web/src/generators/application/application.ts
index 8a0eaaa9cd..6fae37f034 100644
--- a/packages/web/src/generators/application/application.ts
+++ b/packages/web/src/generators/application/application.ts
@@ -83,6 +83,7 @@ function createApplicationFiles(tree: Tree, options: NormalizedSchema) {
       }
     );
   } else {
+    const rootOffset = offsetFromRoot(options.appProjectRoot);
     generateFiles(
       tree,
       join(__dirname, './files/app-webpack'),
@@ -91,18 +92,21 @@ function createApplicationFiles(tree: Tree, options: NormalizedSchema) {
         ...options,
         ...names(options.name),
         tmpl: '',
-        offsetFromRoot: offsetFromRoot(options.appProjectRoot),
+        offsetFromRoot: rootOffset,
         rootTsConfigPath,
         webpackPluginOptions: hasWebpackPlugin(tree)
           ? {
               compiler: options.compiler,
               target: 'web',
-              outputPath: joinPathFragments(
-                'dist',
-                options.appProjectRoot != '.'
-                  ? options.appProjectRoot
-                  : options.projectName
-              ),
+              outputPath: options.isUsingTsSolutionConfig
+                ? 'dist'
+                : joinPathFragments(
+                    rootOffset,
+                    'dist',
+                    options.appProjectRoot !== '.'
+                      ? options.appProjectRoot
+                      : options.projectName
+                  ),
               tsConfig: './tsconfig.app.json',
               main: './src/main.ts',
               assets: ['./src/favicon.ico', './src/assets'],
@@ -181,7 +185,7 @@ async function setupBundler(tree: Tree, options: NormalizedSchema) {
       addPlugin: options.addPlugin,
     });
     const project = readProjectConfiguration(tree, options.projectName);
-    if (project.targets.build) {
+    if (project.targets?.build) {
       const prodConfig = project.targets.build.configurations.production;
       const buildOptions = project.targets.build.options;
       buildOptions.assets = assets;
diff --git a/packages/web/src/generators/application/files/app-webpack/webpack.config.js__tmpl__ b/packages/web/src/generators/application/files/app-webpack/webpack.config.js__tmpl__
index e92be324f4..23983478b7 100644
--- a/packages/web/src/generators/application/files/app-webpack/webpack.config.js__tmpl__
+++ b/packages/web/src/generators/application/files/app-webpack/webpack.config.js__tmpl__
@@ -4,7 +4,7 @@ const { join } = require('path');
 
 module.exports = {
   output: {
-    path: join(__dirname, '<%= offsetFromRoot %><%= webpackPluginOptions.outputPath %>'),
+    path: join(__dirname, '<%= webpackPluginOptions.outputPath %>'),
   },
   devServer: {
     port: 4200