diff --git a/packages/angular/cli/src/command-builder/command-module.ts b/packages/angular/cli/src/command-builder/command-module.ts
index 5de4e4e43741..0ca5b12a742b 100644
--- a/packages/angular/cli/src/command-builder/command-module.ts
+++ b/packages/angular/cli/src/command-builder/command-module.ts
@@ -6,7 +6,7 @@
  * found in the LICENSE file at https://angular.io/license
  */
 
-import { analytics, logging, normalize, schema, strings } from '@angular-devkit/core';
+import { analytics, logging, schema, strings } from '@angular-devkit/core';
 import { readFileSync } from 'fs';
 import * as path from 'path';
 import {
@@ -197,8 +197,6 @@ export abstract class CommandModule<T extends {} = {}> implements CommandModuleI
    * **Note:** This method should be called from the command bundler method.
    */
   protected addSchemaOptionsToCommand<T>(localYargs: Argv<T>, options: Option[]): Argv<T> {
-    const workingDir = normalize(path.relative(this.context.root, process.cwd()));
-
     for (const option of options) {
       const {
         default: defaultVal,
@@ -211,7 +209,6 @@ export abstract class CommandModule<T extends {} = {}> implements CommandModuleI
         hidden,
         name,
         choices,
-        format,
       } = option;
 
       const sharedOptions: YargsOptions & PositionalOptions = {
@@ -224,11 +221,6 @@ export abstract class CommandModule<T extends {} = {}> implements CommandModuleI
         ...(this.context.args.options.help ? { default: defaultVal } : {}),
       };
 
-      // Special case for schematics
-      if (workingDir && format === 'path' && name === 'path' && hidden) {
-        sharedOptions.default = workingDir;
-      }
-
       if (positional === undefined) {
         localYargs = localYargs.option(strings.dasherize(name), {
           type,
diff --git a/packages/angular/cli/src/command-builder/schematics-command-module.ts b/packages/angular/cli/src/command-builder/schematics-command-module.ts
index ec371fe228ee..3c8aaa7fe585 100644
--- a/packages/angular/cli/src/command-builder/schematics-command-module.ts
+++ b/packages/angular/cli/src/command-builder/schematics-command-module.ts
@@ -6,7 +6,7 @@
  * found in the LICENSE file at https://angular.io/license
  */
 
-import { schema, tags } from '@angular-devkit/core';
+import { normalize as devkitNormalize, isJsonObject, schema, tags } from '@angular-devkit/core';
 import { Collection, UnsuccessfulWorkflowExecution, formats } from '@angular-devkit/schematics';
 import {
   FileSystemCollectionDescription,
@@ -14,7 +14,7 @@ import {
   NodeWorkflow,
 } from '@angular-devkit/schematics/tools';
 import type { CheckboxQuestion, Question } from 'inquirer';
-import { resolve } from 'path';
+import { relative, resolve } from 'path';
 import { Argv } from 'yargs';
 import { getProjectByCwd, getSchematicDefaults } from '../utilities/config';
 import { memoize } from '../utilities/memoize';
@@ -137,6 +137,8 @@ export abstract class SchematicsCommandModule
     workflow.registry.useXDeprecatedProvider((msg) => logger.warn(msg));
 
     let shouldReportAnalytics = true;
+    const workingDir = devkitNormalize(relative(this.context.root, process.cwd()));
+
     workflow.engineHost.registerOptionsTransform(async (schematic, options) => {
       if (shouldReportAnalytics) {
         shouldReportAnalytics = false;
@@ -150,6 +152,30 @@ export abstract class SchematicsCommandModule
         ]);
       }
 
+      // Handle `"format": "path"` options.
+      const schema = schematic?.schemaJson;
+      if (!options || workingDir === '' || !schema || !isJsonObject(schema)) {
+        return options;
+      }
+
+      if (!('path' in options && (options as Record<string, unknown>)['path'] === undefined)) {
+        return options;
+      }
+
+      const properties = schema?.['properties'];
+      if (!properties || !isJsonObject(properties)) {
+        return options;
+      }
+
+      const property = properties['path'];
+      if (!property || !isJsonObject(property)) {
+        return options;
+      }
+
+      if (property['format'] === 'path') {
+        (options as Record<string, unknown>)['path'] = workingDir;
+      }
+
       return options;
     });