diff --git a/project-api-tests/src/test/java/org/ballerina/projectapi/BuildNewCommandTest.java b/project-api-tests/src/test/java/org/ballerina/projectapi/BuildNewCommandTest.java
new file mode 100644
index 0000000000..73f7d9bd70
--- /dev/null
+++ b/project-api-tests/src/test/java/org/ballerina/projectapi/BuildNewCommandTest.java
@@ -0,0 +1,142 @@
+/*
+ * Copyright (c) 2024, WSO2 Inc. (http://www.wso2.org) All Rights Reserved.
+ *
+ * WSO2 Inc. licenses this file to you under the Apache License,
+ * Version 2.0 (the "License"); you may not use this file except
+ * in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied.  See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+
+package org.ballerina.projectapi;
+
+import org.testng.Assert;
+import org.testng.annotations.AfterClass;
+import org.testng.annotations.BeforeClass;
+import org.testng.annotations.Test;
+
+import java.io.IOException;
+import java.nio.file.Files;
+import java.nio.file.Path;
+import java.nio.file.Paths;
+import java.util.LinkedList;
+import java.util.List;
+import java.util.Map;
+
+import static org.ballerina.projectapi.CentralTestUtils.createSettingToml;
+import static org.ballerina.projectapi.CentralTestUtils.deleteFiles;
+import static org.ballerina.projectapi.CentralTestUtils.getEnvVariables;
+import static org.ballerina.projectapi.CentralTestUtils.getString;
+import static org.ballerina.projectapi.TestUtils.addEnvVariables;
+import static org.ballerina.projectapi.TestUtils.executeBuildCommand;
+import static org.ballerina.projectapi.TestUtils.executeNewCommand;
+
+/**
+ * Tests related new command compiling.
+ */
+public class BuildNewCommandTest {
+    public static final Path MAVEN_VERSION = Paths.get(System.getProperty("maven.version"));
+    public static final Path CODE_NAME = Paths.get(System.getProperty("code.name"));
+    public static final String DISTRIBUTION_FILE_NAME = "ballerina-" + MAVEN_VERSION + "-" + CODE_NAME;
+
+    private Path tempHomeDirectory;
+    private Path tempWorkspaceDirectory;
+    Map<String, String> envProperties;
+
+    @BeforeClass()
+    public void setUp() throws IOException {
+        TestUtils.setupDistributions();
+        tempHomeDirectory = Files.createTempDirectory("bal-test-integration-packaging-home-");
+        tempWorkspaceDirectory = Files.createTempDirectory("bal-test-integration-packaging-workspace-");
+        createSettingToml(tempHomeDirectory);
+        envProperties = addEnvVariables(getEnvVariables(), tempHomeDirectory);
+    }
+
+    @Test(description = "Build package created from new command with default template")
+    public void testCompilingNewCommandDefaultTempProject() throws IOException, InterruptedException {
+        List<String> args = new LinkedList<>();
+        String projectName = "project_sample";
+        args.add(projectName);
+        executeNewCommand(DISTRIBUTION_FILE_NAME, tempWorkspaceDirectory, args, envProperties);
+        Path projectPath = tempWorkspaceDirectory.resolve(projectName);
+        Assert.assertTrue(Files.isDirectory(projectPath));
+        Assert.assertTrue(Files.exists(projectPath.resolve("Ballerina.toml")));
+
+        List<String> buildArgs = new LinkedList<>();
+        Process build = executeBuildCommand(DISTRIBUTION_FILE_NAME, projectPath, buildArgs, envProperties);
+        String buildOutput = getString(build.getInputStream());
+        Assert.assertTrue(buildOutput.contains("Compiling source"));
+        Assert.assertTrue(buildOutput.contains("Generating executable"));
+    }
+
+    @Test(description = "Build package created from new command with main template")
+    public void testCompilingNewCommandMainTempProject() throws IOException, InterruptedException {
+        List<String> args = new LinkedList<>();
+        String projectName = "main_sample";
+        args.add(projectName);
+        args.add("-t");
+        args.add("main");
+        executeNewCommand(DISTRIBUTION_FILE_NAME, tempWorkspaceDirectory, args, envProperties);
+        Path projectPath = tempWorkspaceDirectory.resolve(projectName);
+        Assert.assertTrue(Files.isDirectory(projectPath));
+        Assert.assertTrue(Files.exists(projectPath.resolve("Ballerina.toml")));
+
+        List<String> buildArgs = new LinkedList<>();
+        Process build = executeBuildCommand(DISTRIBUTION_FILE_NAME, projectPath, buildArgs, envProperties);
+        String buildOutput = getString(build.getInputStream());
+        Assert.assertTrue(buildOutput.contains("Compiling source"));
+        Assert.assertTrue(buildOutput.contains("Generating executable"));
+    }
+
+    @Test(description = "Build package created from new command with service template")
+    public void testCompilingNewCommandServiceTempProject() throws IOException, InterruptedException {
+        List<String> args = new LinkedList<>();
+        String projectName = "service_sample";
+        args.add(projectName);
+        args.add("-t");
+        args.add("service");
+        executeNewCommand(DISTRIBUTION_FILE_NAME, tempWorkspaceDirectory, args, envProperties);
+        Path projectPath = tempWorkspaceDirectory.resolve(projectName);
+        Assert.assertTrue(Files.isDirectory(projectPath));
+        Assert.assertTrue(Files.exists(projectPath.resolve("Ballerina.toml")));
+
+        List<String> buildArgs = new LinkedList<>();
+        Process build = executeBuildCommand(DISTRIBUTION_FILE_NAME, projectPath, buildArgs, envProperties);
+        String buildOutput = getString(build.getInputStream());
+        Assert.assertTrue(buildOutput.contains("Compiling source"));
+        Assert.assertTrue(buildOutput.contains("Generating executable"));
+    }
+
+    @Test(description = "Build package created from new command with lib template")
+    public void testCompilingNewCommandLibTempProject() throws IOException, InterruptedException {
+        List<String> args = new LinkedList<>();
+        String projectName = "lib_sample";
+        args.add(projectName);
+        args.add("-t");
+        args.add("lib");
+        executeNewCommand(DISTRIBUTION_FILE_NAME, tempWorkspaceDirectory, args, envProperties);
+        Path projectPath = tempWorkspaceDirectory.resolve(projectName);
+        Assert.assertTrue(Files.isDirectory(projectPath));
+        Assert.assertTrue(Files.exists(projectPath.resolve("Ballerina.toml")));
+
+        List<String> buildArgs = new LinkedList<>();
+        Process build = executeBuildCommand(DISTRIBUTION_FILE_NAME, projectPath, buildArgs, envProperties);
+        String buildOutput = getString(build.getInputStream());
+        Assert.assertTrue(buildOutput.contains("Compiling source"));
+        Assert.assertTrue(buildOutput.contains("Generating executable"));
+    }
+
+    @AfterClass
+    private void cleanup() throws IOException {
+        deleteFiles(tempHomeDirectory);
+        deleteFiles(tempWorkspaceDirectory);
+    }
+}
diff --git a/project-api-tests/src/test/java/org/ballerina/projectapi/TestUtils.java b/project-api-tests/src/test/java/org/ballerina/projectapi/TestUtils.java
index 8f9c047dba..67cc0ef516 100644
--- a/project-api-tests/src/test/java/org/ballerina/projectapi/TestUtils.java
+++ b/project-api-tests/src/test/java/org/ballerina/projectapi/TestUtils.java
@@ -118,6 +118,12 @@ public static Process executeHelpCommand(String distributionName, Path sourceDir
         return executeCommand("help", distributionName, sourceDirectory, args, envProperties);
     }
 
+    public static Process executeNewCommand(String distributionName, Path sourceDirectory,
+                                            List<String> args, Map<String, String> envProperties)
+            throws IOException, InterruptedException {
+        return executeCommand("new", distributionName, sourceDirectory, args, envProperties);
+    }
+
     /**
      * Clean and setup the distribution.
      *