diff --git a/common.bazelrc b/common.bazelrc
index 964c5c56105b..ea2b48f0d37b 100644
--- a/common.bazelrc
+++ b/common.bazelrc
@@ -6,6 +6,10 @@
 
 ### --- ###
 
+### NOTE on --experimental_sibling_repository_layout
+### The option was removed due to https://github.com/bazelbuild/bazel/issues/26361
+### One experimental option less and also it looks like it won't enabled by default in the future
+
 common --@rules_jvm//:jvm-builder=@community//:monorepo-jvm-builder
 common --@rules_jvm//:default-kotlinc-opts=@community//:k17
 common --@rules_jvm//:resource-packager=@rules_jvm//src/misc:worker-jvm
@@ -30,7 +34,7 @@ common:windows --lockfile_mode=off  # todo: https://youtrack.jetbrains.com/issue
 
 common --noenable_workspace
 
-common --nolegacy_external_runfiles --experimental_sibling_repository_layout
+common --nolegacy_external_runfiles
 
 # https://bazel.build/docs/bazel-and-java#config-build-tools-java
 # A second pair of JDK and JVM used to build and execute tools, which are used in the build process, but are not in the build results.
@@ -41,6 +45,7 @@ common --tool_java_runtime_version=remotejdk_17
 
 # make sure you don't need to open file to read compilation errors
 common --experimental_ui_max_stdouterr_bytes=-1
+common --experimental_ui_max_stdouterr_bytes=-1
 
 # IDEA do not handle symlinks efficiently (freeze due to modal non-cancellable dialog) and no way to exclude directories by pattern bazel-
 common --symlink_prefix=out/bazel-
diff --git a/platform/build-scripts/bazel/.bazelrc b/platform/build-scripts/bazel/.bazelrc
index 2cbe298cc7cf..12569af10a26 100644
--- a/platform/build-scripts/bazel/.bazelrc
+++ b/platform/build-scripts/bazel/.bazelrc
@@ -1,5 +1,5 @@
 build --nobuild_runfile_links
-common --nolegacy_external_runfiles --experimental_sibling_repository_layout
+common --nolegacy_external_runfiles
 
 # Without it it fails in Windows Sandbox with:
 # ERROR: C:/users/wdagutilityaccount/desktop/bazel/BUILD.bazel:24:15: JdepsMerge //:jps_to_bazel-lib { jdeps: 1 } failed: Worker process did not return a WorkResponse:
diff --git a/platform/build-scripts/bazel/src/org/jetbrains/intellij/build/bazel/BazelBuildFileGenerator.kt b/platform/build-scripts/bazel/src/org/jetbrains/intellij/build/bazel/BazelBuildFileGenerator.kt
index 26cc7ffb88ed..410108d3f6c6 100644
--- a/platform/build-scripts/bazel/src/org/jetbrains/intellij/build/bazel/BazelBuildFileGenerator.kt
+++ b/platform/build-scripts/bazel/src/org/jetbrains/intellij/build/bazel/BazelBuildFileGenerator.kt
@@ -51,11 +51,11 @@ internal data class CustomModuleDescription(
 
 internal val customModules: Map<String, CustomModuleDescription> = listOf(
   CustomModuleDescription(moduleName = "intellij.idea.community.build.zip", bazelPackage = "@rules_jvm//zip", bazelTargetName = "zip",
-                          outputDirectory = "out/bazel-out/rules_jvm+/\${CONF}/bin/zip"),
+                          outputDirectory = "out/bazel-bin/external/rules_jvm+/zip"),
   CustomModuleDescription(moduleName = "intellij.platform.jps.build.dependencyGraph", bazelPackage = "@rules_jvm//dependency-graph", bazelTargetName = "dependency-graph",
-                          outputDirectory = "out/bazel-out/rules_jvm+/\${CONF}/bin/dependency-graph"),
+                          outputDirectory = "out/bazel-bin/external/rules_jvm+/dependency-graph"),
   CustomModuleDescription(moduleName = "intellij.platform.jps.build.javac.rt", bazelPackage = "@rules_jvm//jps-builders-6", bazelTargetName = "build-javac-rt",
-                          outputDirectory = "out/bazel-out/rules_jvm+/\${CONF}/bin/jps-builders-6"),
+                          outputDirectory = "out/bazel-bin/external/rules_jvm+/jps-builders-6"),
 ).associateBy { it.moduleName }
 
 @Suppress("ReplaceGetOrSet")
@@ -520,7 +520,7 @@ internal class BazelBuildFileGenerator(
 
     val jarOutputDirectory = when {
       customModule != null -> customModule.outputDirectory
-      moduleDescriptor.isCommunity -> "out/bazel-out/community+/\${CONF}/bin/$bazelModuleRelativePath"
+      moduleDescriptor.isCommunity -> "out/bazel-bin/external/community+/$bazelModuleRelativePath"
       else -> "out/bazel-bin/$bazelModuleRelativePath"
     }
 
@@ -531,7 +531,7 @@ internal class BazelBuildFileGenerator(
       // full target name instead of just jar for intellij.dotenv.*
       // like @community//plugins/env-files-support:dotenv-go_resources
       jarName.startsWith("@community//") ->
-        "out/bazel-out/community+/\${CONF}/bin/${jarName.substringAfter("@community//").replace(':', '/')}.jar"
+        "out/bazel-bin/external/community+/${jarName.substringAfter("@community//").replace(':', '/')}.jar"
       else -> "$jarOutputDirectory/$jarName.jar"
     }