diff --git a/dev-shell.sh b/dev-shell.sh
index e16693b..7d72b93 100755
--- a/dev-shell.sh
+++ b/dev-shell.sh
@@ -1,8 +1,10 @@
 #!/bin/bash
 
+env_dir="${PWD}/test-env"
+
 # Function to execute custom commands before exiting
 down() {
-	docker compose --env-file=$PWD/docker/.env.dev -f $PWD/docker/docker-compose.yml down --remove-orphans
+	docker compose --env-file=$env_dir/.env.dev -f $env_dir/docker-compose.yml down --remove-orphans
 	# remove the docker runtime part
     docker volume rm docker_docker-runtime
 }
@@ -11,4 +13,4 @@ down() {
 trap down EXIT
 
 mkdir -p $PWD/.device/sysroot
-docker compose --env-file=$PWD/docker/.env.dev -f $PWD/docker/docker-compose.yml run -e DEV_USER=$(id -u) -e DEV_GROUP=$(id -g) sotactl $@
+docker compose --env-file=$env_dir/.env.dev -f $env_dir/docker-compose.yml run -e DEV_USER=$(id -u) -e DEV_GROUP=$(id -g) sotactl $@
diff --git a/docker/.env.dev b/test-env/.env.dev
similarity index 76%
rename from docker/.env.dev
rename to test-env/.env.dev
index e5ceadc..71db06f 100644
--- a/docker/.env.dev
+++ b/test-env/.env.dev
@@ -14,3 +14,6 @@ BOOTDIR=$DEV_DIR/boot
 
 # /var/lib/docker
 DOCKER_DATA_ROOT=$DOCKER_DIR/data
+
+# Dir containing Dockerfile and build context to build the "sotactl" image
+SOTACTL_DOCKER_DIR=$PWD/docker
diff --git a/docker/docker-compose.yml b/test-env/docker-compose.yml
similarity index 96%
rename from docker/docker-compose.yml
rename to test-env/docker-compose.yml
index 435794e..92825b7 100644
--- a/docker/docker-compose.yml
+++ b/test-env/docker-compose.yml
@@ -11,7 +11,7 @@ services:
 
   sotactl:
       build:
-        context: .
+        context: ${SOTACTL_DOCKER_DIR}
         args:
           AKLITE_VER: master
         dockerfile: Dockerfile