diff --git a/app/services/projects/transfer_service.rb b/app/services/projects/transfer_service.rb
index e5cd6fcdfe3..e742df5f696 100644
--- a/app/services/projects/transfer_service.rb
+++ b/app/services/projects/transfer_service.rb
@@ -75,6 +75,8 @@ module Projects
         project.old_path_with_namespace = @old_path
         project.expires_full_path_cache
 
+        write_repository_config(@new_path)
+
         execute_system_hooks
       end
     rescue Exception # rubocop:disable Lint/RescueException
@@ -98,6 +100,13 @@ module Projects
       project.save!
     end
 
+    def write_repository_config(full_path)
+      # We'd need to keep track of project full path otherwise directory tree
+      # created with hashed storage enabled cannot be usefully imported using
+      # the import rake task.
+      project.write_repository_config(:fullpath, full_path)
+    end
+
     def refresh_permissions
       # This ensures we only schedule 1 job for every user that has access to
       # the namespaces.
@@ -110,6 +119,7 @@ module Projects
     def rollback_side_effects
       rollback_folder_move
       update_namespace_and_visibility(@old_namespace)
+      write_repository_config(@old_path)
     end
 
     def rollback_folder_move
diff --git a/spec/services/projects/transfer_service_spec.rb b/spec/services/projects/transfer_service_spec.rb
index 2b1337bee7e..7377c748698 100644
--- a/spec/services/projects/transfer_service_spec.rb
+++ b/spec/services/projects/transfer_service_spec.rb
@@ -54,6 +54,12 @@ describe Projects::TransferService do
       expect(project.disk_path).not_to eq(old_path)
       expect(project.disk_path).to start_with(group.path)
     end
+
+    it 'updates project full path in .git/config' do
+      transfer_project(project, user, group)
+
+      expect(project.repo.config['gitlab.fullpath']).to eq "#{group.full_path}/#{project.path}"
+    end
   end
 
   context 'when transfer fails' do
@@ -86,6 +92,12 @@ describe Projects::TransferService do
       expect(original_path).to eq current_path
     end
 
+    it 'rolls back project full path in .git/config' do
+      attempt_project_transfer
+
+      expect(project.repo.config['gitlab.fullpath']).to eq project.full_path
+    end
+
     it "doesn't send move notifications" do
       expect_any_instance_of(NotificationService).not_to receive(:project_was_moved)