diff --git a/extensions/sql-database-projects/src/controllers/mainController.ts b/extensions/sql-database-projects/src/controllers/mainController.ts
index 805fee18b7..733d7f705c 100644
--- a/extensions/sql-database-projects/src/controllers/mainController.ts
+++ b/extensions/sql-database-projects/src/controllers/mainController.ts
@@ -136,7 +136,7 @@ export default class MainController implements Disposable {
 			// TODO: what if the selected folder is outside the workspace?
 
 			const newProjFolderUri = (selectionResult as Uri[])[0];
-			const newProjFilePath = await this.projectsController.createNewProject(<string>newProjName, newProjFolderUri);
+			const newProjFilePath = await this.projectsController.createNewProject(<string>newProjName, newProjFolderUri, true);
 			const proj = await this.projectsController.openProject(Uri.file(newProjFilePath));
 
 			return proj;
diff --git a/extensions/sql-database-projects/src/controllers/projectController.ts b/extensions/sql-database-projects/src/controllers/projectController.ts
index ccef684bb0..17cac978a3 100644
--- a/extensions/sql-database-projects/src/controllers/projectController.ts
+++ b/extensions/sql-database-projects/src/controllers/projectController.ts
@@ -117,7 +117,7 @@ export class ProjectsController {
 	 * @param folderUri
 	 * @param projectGuid
 	 */
-	public async createNewProject(newProjName: string, folderUri: Uri, projectGuid?: string): Promise<string> {
+	public async createNewProject(newProjName: string, folderUri: Uri, makeOwnFolder: boolean, projectGuid?: string): Promise<string> {
 		if (projectGuid && !UUID.isUUID(projectGuid)) {
 			throw new Error(`Specified GUID is invalid: '${projectGuid}'`);
 		}
@@ -135,7 +135,7 @@ export class ProjectsController {
 			newProjFileName += constants.sqlprojExtension;
 		}
 
-		const newProjFilePath = path.join(folderUri.fsPath, path.parse(newProjFileName).name, newProjFileName);
+		const newProjFilePath = makeOwnFolder ? path.join(folderUri.fsPath, path.parse(newProjFileName).name, newProjFileName) : path.join(folderUri.fsPath, newProjFileName);
 
 		let fileExists = false;
 		try {
@@ -677,7 +677,7 @@ export class ProjectsController {
 			// TODO: Check for success
 
 			// Create and open new project
-			const newProjFilePath = await this.createNewProject(newProjName as string, newProjFolderUri as Uri);
+			const newProjFilePath = await this.createNewProject(newProjName as string, newProjFolderUri as Uri, false);
 			const project = await this.openProject(Uri.file(newProjFilePath));
 
 			//Create a list of all the files and directories to be added to project
diff --git a/extensions/sql-database-projects/src/test/deployDatabaseDialog.test.ts b/extensions/sql-database-projects/src/test/deployDatabaseDialog.test.ts
index 2f38deb7ab..ec2d64b22c 100644
--- a/extensions/sql-database-projects/src/test/deployDatabaseDialog.test.ts
+++ b/extensions/sql-database-projects/src/test/deployDatabaseDialog.test.ts
@@ -36,7 +36,7 @@ describe.skip('Deploy Database Dialog', () => {
 		const projController = new ProjectsController(testContext.apiWrapper.object, new SqlDatabaseProjectTreeViewProvider());
 		const projFileDir = path.join(os.tmpdir(), `TestProject_${new Date().getTime()}`);
 
-		const projFilePath = await projController.createNewProject('TestProjectName', vscode.Uri.file(projFileDir), 'BA5EBA11-C0DE-5EA7-ACED-BABB1E70A575');
+		const projFilePath = await projController.createNewProject('TestProjectName', vscode.Uri.file(projFileDir), true, 'BA5EBA11-C0DE-5EA7-ACED-BABB1E70A575');
 		const project = new Project(projFilePath);
 		const deployDatabaseDialog = new DeployDatabaseDialog(testContext.apiWrapper.object, project);
 		deployDatabaseDialog.openDialog();
@@ -48,7 +48,7 @@ describe.skip('Deploy Database Dialog', () => {
 		const projFolder = `TestProject_${new Date().getTime()}`;
 		const projFileDir = path.join(os.tmpdir(), projFolder);
 
-		const projFilePath = await projController.createNewProject('TestProjectName', vscode.Uri.file(projFileDir), 'BA5EBA11-C0DE-5EA7-ACED-BABB1E70A575');
+		const projFilePath = await projController.createNewProject('TestProjectName', vscode.Uri.file(projFileDir), true, 'BA5EBA11-C0DE-5EA7-ACED-BABB1E70A575');
 		const project = new Project(projFilePath);
 
 		const deployDatabaseDialog = new DeployDatabaseDialog(testContext.apiWrapper.object, project);
diff --git a/extensions/sql-database-projects/src/test/projectController.test.ts b/extensions/sql-database-projects/src/test/projectController.test.ts
index 1528cce485..1ee771b3ac 100644
--- a/extensions/sql-database-projects/src/test/projectController.test.ts
+++ b/extensions/sql-database-projects/src/test/projectController.test.ts
@@ -60,7 +60,7 @@ describe('ProjectsController: project controller operations', function (): void
 			const projController = new ProjectsController(testContext.apiWrapper.object, new SqlDatabaseProjectTreeViewProvider());
 			const projFileDir = path.join(os.tmpdir(), `TestProject_${new Date().getTime()}`);
 
-			const projFilePath = await projController.createNewProject('TestProjectName', vscode.Uri.file(projFileDir), 'BA5EBA11-C0DE-5EA7-ACED-BABB1E70A575');
+			const projFilePath = await projController.createNewProject('TestProjectName', vscode.Uri.file(projFileDir), false, 'BA5EBA11-C0DE-5EA7-ACED-BABB1E70A575');
 
 			let projFileText = (await fs.readFile(projFilePath)).toString();