diff --git a/python/ide/src/com/jetbrains/python/newProject/actions/GenerateProjectCallback.java b/python/ide/src/com/jetbrains/python/newProject/actions/GenerateProjectCallback.java
index 40603b07d766..51285a044a78 100644
--- a/python/ide/src/com/jetbrains/python/newProject/actions/GenerateProjectCallback.java
+++ b/python/ide/src/com/jetbrains/python/newProject/actions/GenerateProjectCallback.java
@@ -28,10 +28,10 @@ import com.intellij.openapi.projectRoots.SdkAdditionalData;
 import com.intellij.openapi.projectRoots.impl.SdkConfigurationUtil;
 import com.intellij.openapi.roots.ui.configuration.projectRoot.ProjectSdksModel;
 import com.intellij.openapi.util.Computable;
+import com.intellij.openapi.util.io.FileUtil;
 import com.intellij.openapi.vfs.LocalFileSystem;
 import com.intellij.openapi.vfs.VirtualFile;
 import com.intellij.platform.DirectoryProjectGenerator;
-import com.intellij.util.Function;
 import com.intellij.util.NullableConsumer;
 import com.jetbrains.python.configuration.PyConfigurableInterpreterList;
 import com.jetbrains.python.newProject.PyNewProjectSettings;
@@ -94,7 +94,8 @@ public class GenerateProjectCallback implements NullableConsumer<ProjectSettings
   private static Project generateProject(@NotNull final Project project,
                                          @NotNull final ProjectSettingsStepBase settings) {
     final DirectoryProjectGenerator generator = settings.getProjectGenerator();
-    return AbstractNewProjectStep.doGenerateProject(project, settings.getProjectLocation(), generator,
+    final String location = FileUtil.expandUserHome(settings.getProjectLocation());
+    return AbstractNewProjectStep.doGenerateProject(project, location, generator,
                                                     file -> computeProjectSettings(generator, (ProjectSpecificSettingsStep)settings));
   }