diff --git a/tests/legacy-cli/e2e/setup/002-npm-sandbox.ts b/tests/legacy-cli/e2e/setup/002-npm-sandbox.ts
index 1d1824f25235..271980317b3b 100644
--- a/tests/legacy-cli/e2e/setup/002-npm-sandbox.ts
+++ b/tests/legacy-cli/e2e/setup/002-npm-sandbox.ts
@@ -17,6 +17,13 @@ export default async function () {
   process.env.NPM_CONFIG_USERCONFIG = npmrc;
   process.env.NPM_CONFIG_PREFIX = npmModulesPrefix;
 
+  // Snapshot builds may contain versions that are not yet released (e.g., RC phase main branch).
+  // In this case peer dependency ranges may not resolve causing npm 7+ to fail during tests.
+  // To support this case, legacy peer dependency mode is enabled for snapshot builds.
+  if (getGlobalVariable('argv')['ng-snapshots']) {
+    process.env['NPM_CONFIG_legacy_peer_deps'] = 'true';
+  }
+
   // Configure the registry and prefix used within the test sandbox
   await writeFile(npmrc, `registry=${npmRegistry}\nprefix=${npmModulesPrefix}`);
   await mkdir(npmModulesPrefix);
diff --git a/tests/legacy-cli/e2e/utils/packages.ts b/tests/legacy-cli/e2e/utils/packages.ts
index cc294acfcfa8..3c6476f14c3f 100644
--- a/tests/legacy-cli/e2e/utils/packages.ts
+++ b/tests/legacy-cli/e2e/utils/packages.ts
@@ -50,7 +50,6 @@ export async function setRegistry(useTestRegistry: boolean): Promise<void> {
     : 'https://registry.npmjs.org';
 
   const isCI = getGlobalVariable('ci');
-  const isSnapshotBuild = getGlobalVariable('argv')['ng-snapshots'];
 
   // Ensure local test registry is used when outside a project
   if (isCI) {
@@ -60,11 +59,4 @@ export async function setRegistry(useTestRegistry: boolean): Promise<void> {
     // Yarn supports both `NPM_CONFIG_REGISTRY` and `YARN_REGISTRY`.
     process.env['NPM_CONFIG_REGISTRY'] = url;
   }
-
-  // Snapshot builds may contain versions that are not yet released (e.g., RC phase main branch).
-  // In this case peer dependency ranges may not resolve causing npm 7+ to fail during tests.
-  // To support this case, legacy peer dependency mode is enabled for snapshot builds.
-  if (isSnapshotBuild) {
-    process.env['NPM_CONFIG_legacy_peer_deps'] = 'true';
-  }
 }