diff --git a/.github/workflows/libs_test.yml b/.github/workflows/libs_test.yml
index 9c65457d..f9e83f4c 100644
--- a/.github/workflows/libs_test.yml
+++ b/.github/workflows/libs_test.yml
@@ -16,6 +16,12 @@ jobs:
         uses: opentofu/setup-opentofu@v1.0.4
         with:
           tofu_version: 1.8.5
+          
+      - name: Setup terraform
+        uses: hashicorp/setup-terraform@v3
+        with:
+          terraform_wrapper: false
+          terraform_version: "1.5.5"
 
       - name: Download Go
         uses: actions/setup-go@v5
diff --git a/action.yml b/action.yml
index b14097b1..9219a513 100644
--- a/action.yml
+++ b/action.yml
@@ -167,6 +167,11 @@ inputs:
     description: "Leverage actions/cache to cache dependencies to speed up execution"
     required: false
     default: 'false'
+  terraform-cache-dir:
+    description: "allows overriding of the terraform cache dir which defaults to ${github.workspace}/cache"
+    required: false
+    default: ''
+
   digger-spec:
     description: "(orchestrator only) the spec to pass onto digger cli"
     required: false
@@ -247,11 +252,21 @@ runs:
         subscription-id: ${{ inputs.azure-subscription-id }}
       if: ${{ inputs.setup-azure == 'true' && inputs.azure-client-id != '' }}
 
+    # if terraform-cache-dir is set then we set it to that otherwise set it to '${{github.workspace}}/cache'
+    - name: retrieve cache dir
+      shell: bash
+      run: |
+        CACHE_DIR=${{ inputs.terraform-cache-dir == '' &&
+          format('{0}/cache', github.workspace) ||
+          inputs.terraform-cache-dir }}
+        echo "TF_PLUGIN_CACHE_DIR=$CACHE_DIR" >> $GITHUB_ENV
+        echo "TERRAGRUNT_PROVIDER_CACHE_DIR=$CACHE_DIR" >> $GITHUB_ENV
+
     - uses: actions/cache/restore@v4
       id: restore_cache
       name: restore_cache
       with:
-        path: ${{ github.workspace }}/cache
+        path: $TF_PLUGIN_CACHE_DIR
         key: digger-cache
         restore-keys: |
           digger-cache
@@ -346,6 +361,7 @@ runs:
         mkdir -p $GITHUB_WORKSPACE/cache
       shell: bash
 
+
     - name: build and run digger
       if: ${{ !startsWith(github.action_ref, 'v') }}
       shell: bash
@@ -369,9 +385,7 @@ runs:
         INPUT_DRIFT_DETECTION_SLACK_NOTIFICATION_URL: ${{ inputs.drift-detection-slack-notification-url }}
         NO_BACKEND: ${{ inputs.no-backend }}
         DEBUG: 'true'
-        TF_PLUGIN_CACHE_DIR: ${{ github.workspace }}/cache
         TERRAGRUNT_PROVIDER_CACHE: ${{ inputs.cache-dependencies == 'true' && 1 || 0 }}
-        TERRAGRUNT_PROVIDER_CACHE_DIR: ${{ github.workspace }}/cache
         DIGGER_RUN_SPEC: ${{inputs.digger-spec}}
       run: |
           if [[ ${{ inputs.ee }} == "true" ]]; then
@@ -407,9 +421,7 @@ runs:
         INPUT_DIGGER_COMMAND: ${{ inputs.command }}
         INPUT_DRIFT_DETECTION_SLACK_NOTIFICATION_URL: ${{ inputs.drift-detection-slack-notification-url }}
         NO_BACKEND: ${{ inputs.no-backend }}
-        TF_PLUGIN_CACHE_DIR: ${{ github.workspace }}/cache
         TERRAGRUNT_PROVIDER_CACHE: ${{ inputs.cache-dependencies == 'true' && 1 || 0 }}
-        TERRAGRUNT_PROVIDER_CACHE_DIR: ${{ github.workspace }}/cache
         DIGGER_RUN_SPEC: ${{inputs.digger-spec}}
       id: digger
       shell: bash
@@ -428,7 +440,7 @@ runs:
       name: cache-save
       if: ${{ always() && inputs.cache-dependencies == 'true' && steps.restore_cache.outputs.cache-hit != 'true' }}
       with:
-        path: ${{ github.workspace }}/cache
+        path: $TF_PLUGIN_CACHE_DIR
         key: digger-cache-${{ hashFiles('**/cache') }}
         
 branding:
diff --git a/cli/pkg/digger/digger.go b/cli/pkg/digger/digger.go
index ed309033..b097319b 100644
--- a/cli/pkg/digger/digger.go
+++ b/cli/pkg/digger/digger.go
@@ -65,9 +65,11 @@ func DetectCI() CIName {
 }
 
 func RunJobs(jobs []orchestrator.Job, prService ci.PullRequestService, orgService ci.OrgService, lock locking2.Lock, reporter reporting.Reporter, planStorage storage.PlanStorage, policyChecker policy.Checker, commentUpdater comment_updater.CommentUpdater, backendApi backendapi.Api, jobId string, reportFinalStatusToBackend bool, reportTerraformOutput bool, prCommentId string, workingDir string) (bool, bool, error) {
-
 	defer reporter.Flush()
 
+	log.Printf("Info: [TF_PLUGIN_CACHE_DIR=%v] ", os.Getenv("TF_PLUGIN_CACHE_DIR"))
+	log.Printf("Info: [TERRAGRUNT_PROVIDER_CACHE_DIR=%v", os.Getenv("TERRAGRUNT_PROVIDER_CACHE_DIR"))
+
 	runStartedAt := time.Now()
 
 	exectorResults := make([]execution.DiggerExecutorResult, len(jobs))