diff --git a/images/win/scripts/Installers/Initialize-VM.ps1 b/images/win/scripts/Installers/Initialize-VM.ps1
index 26ce2a4ec..7623497e3 100644
--- a/images/win/scripts/Installers/Initialize-VM.ps1
+++ b/images/win/scripts/Installers/Initialize-VM.ps1
@@ -36,6 +36,7 @@ Add-Content -Path $profile.AllUsersAllHosts -Value '$ErrorActionPreference="Stop
 # Set static env vars
 setx ImageVersion $env:IMAGE_VERSION /m
 setx ImageOS $env:IMAGE_OS /m
+setx AGENT_TOOLSDIRECTORY $env:AGENT_TOOLSDIRECTORY /m
 
 # Set TLS1.2
 [Net.ServicePointManager]::SecurityProtocol = [Net.ServicePointManager]::SecurityProtocol -bor "Tls12"
diff --git a/images/win/scripts/Installers/Install-Ruby.ps1 b/images/win/scripts/Installers/Install-Ruby.ps1
index 6398bf094..ef0436ae7 100644
--- a/images/win/scripts/Installers/Install-Ruby.ps1
+++ b/images/win/scripts/Installers/Install-Ruby.ps1
@@ -98,11 +98,6 @@ function Set-DefaultRubyVersion
     Add-MachinePathItem -PathItem $rubyDir | Out-Null
 }
 
-# Define AGENT_TOOLSDIRECTORY environment variable
-$toolsDirectory = "C:/hostedtoolcache/windows"
-$env:AGENT_TOOLSDIRECTORY = $toolsDirectory
-setx AGENT_TOOLSDIRECTORY $toolsDirectory /M
-
 # Install Ruby
 $rubyTools = (Get-ToolsetContent).toolcache | Where-Object { $_.name -eq "Ruby" }
 $rubyToolVersions = $rubyTools.versions
diff --git a/images/win/windows2016.json b/images/win/windows2016.json
index 98484d2c8..ad4876dd8 100644
--- a/images/win/windows2016.json
+++ b/images/win/windows2016.json
@@ -21,6 +21,7 @@
         "imagedata_file": "C:\\imagedata.json",
         "helper_script_folder": "C:\\Program Files\\WindowsPowerShell\\Modules\\",
         "psmodules_root_folder": "C:\\Modules",
+        "agent_tools_directory": "C:\\hostedtoolcache\\windows",
         "install_user": "installer",
         "install_password": null,
         "capture_name_prefix": "packer",
@@ -114,6 +115,7 @@
             "environment_vars": [
                 "IMAGE_VERSION={{user `image_version`}}",
                 "IMAGE_OS={{user `image_os`}}",
+                "AGENT_TOOLSDIRECTORY={{user `agent_tools_directory`}}",
                 "TOOLSET_JSON_PATH={{user `toolset_json_path`}}",
                 "PSMODULES_ROOT_FOLDER={{user `psmodules_root_folder`}}"
             ],
diff --git a/images/win/windows2019.json b/images/win/windows2019.json
index 7c48cb86b..268bcce03 100644
--- a/images/win/windows2019.json
+++ b/images/win/windows2019.json
@@ -21,6 +21,7 @@
         "imagedata_file": "C:\\imagedata.json",
         "helper_script_folder": "C:\\Program Files\\WindowsPowerShell\\Modules\\",
         "psmodules_root_folder": "C:\\Modules",
+        "agent_tools_directory": "C:\\hostedtoolcache\\windows",
         "install_user": "installer",
         "install_password": null,
         "capture_name_prefix": "packer",
@@ -114,6 +115,7 @@
             "environment_vars": [
                 "IMAGE_VERSION={{user `image_version`}}",
                 "IMAGE_OS={{user `image_os`}}",
+                "AGENT_TOOLSDIRECTORY={{user `agent_tools_directory`}}",
                 "TOOLSET_JSON_PATH={{user `toolset_json_path`}}",
                 "PSMODULES_ROOT_FOLDER={{user `psmodules_root_folder`}}"
             ],