diff --git a/src/poetry/console/application.py b/src/poetry/console/application.py
index 843279c8bd3..f950511c662 100644
--- a/src/poetry/console/application.py
+++ b/src/poetry/console/application.py
@@ -189,6 +189,10 @@ def _default_definition(self) -> Definition:
     def project_directory(self) -> Path:
         return self._project_directory or self._working_directory
 
+    @property
+    def working_directory(self) -> Path:
+        return self._working_directory
+
     @property
     def poetry(self) -> Poetry:
         from poetry.factory import Factory
@@ -339,7 +343,7 @@ def _configure_global_options(self, io: IO) -> None:
         # this will raise an exception if the path is invalid
         self._working_directory = ensure_path(
             io.input.option("directory") or Path.cwd(), is_directory=True
-        )
+        ).resolve()
 
         self._project_directory = io.input.option("project")
         if self._project_directory is not None:
diff --git a/tests/console/test_application_global_options.py b/tests/console/test_application_global_options.py
index c511e8bdfc5..89a6f7c709a 100644
--- a/tests/console/test_application_global_options.py
+++ b/tests/console/test_application_global_options.py
@@ -94,9 +94,11 @@ def with_mocked_version_command(mocker: MockerFixture) -> None:
 
     def mock_handle(command: VersionCommand) -> int:
         exit_code = orig_version_command(command)
+        application = command.application
+        assert isinstance(application, Application)
 
         command.io.write_line(f"ProjectPath: {command.poetry.pyproject_path.parent}")
-        command.io.write_line(f"WorkingDirectory: {Path.cwd()}")
+        command.io.write_line(f"WorkingDirectory: {application.working_directory}")
 
         return exit_code
 
@@ -226,6 +228,28 @@ def test_application_with_relative_project_parameter(
         """)
 
 
+def test_application_with_relative_directory_parameter(
+    tester: ApplicationTester,
+    project_source_directory: Path,
+    relative_project_source_directory: Path,
+    with_mocked_version_command: None,
+) -> None:
+    args = f"--directory '{relative_project_source_directory}' version"
+
+    tester.execute(args)
+    assert tester.io.fetch_error() == ""
+    assert tester.status_code == 0
+
+    output = tester.io.fetch_output()
+
+    # relative directory parameter results in absolute path for working directory
+    assert output == textwrap.dedent(f"""\
+    foobar 0.1.0
+    ProjectPath: {project_source_directory}
+    WorkingDirectory: {project_source_directory}
+    """)
+
+
 def test_application_with_relative_directory_parameter_and_early_poetry_access_plugin(
     tester: ApplicationTester,
     with_early_poetry_access_plugin: None,