diff --git a/esphome/dashboard/web_server.py b/esphome/dashboard/web_server.py
index 30b792676a..24595eb942 100644
--- a/esphome/dashboard/web_server.py
+++ b/esphome/dashboard/web_server.py
@@ -1075,12 +1075,9 @@ class ArchiveRequestHandler(BaseHandler):
         shutil.move(config_file, os.path.join(archive_path, configuration))
 
         storage_json = StorageJSON.load(storage_path)
-        if storage_json is not None:
+        if storage_json is not None and storage_json.build_path:
             # Delete build folder (if exists)
-            name = storage_json.name
-            build_folder = os.path.join(settings.config_dir, name)
-            if build_folder is not None:
-                shutil.rmtree(build_folder, os.path.join(archive_path, name))
+            shutil.rmtree(storage_json.build_path, ignore_errors=True)
 
 
 class UnArchiveRequestHandler(BaseHandler):
diff --git a/tests/dashboard/test_web_server.py b/tests/dashboard/test_web_server.py
index 1684b2c143..605df4e02c 100644
--- a/tests/dashboard/test_web_server.py
+++ b/tests/dashboard/test_web_server.py
@@ -589,7 +589,7 @@ async def test_archive_request_handler_post(
     mock_ext_storage_path: MagicMock,
     tmp_path: Path,
 ) -> None:
-    """Test ArchiveRequestHandler.post method."""
+    """Test ArchiveRequestHandler.post method without storage_json."""
 
     # Set up temp directories
     config_dir = Path(get_fixture_path("conf"))
@@ -616,6 +616,97 @@ async def test_archive_request_handler_post(
     ).read_text() == "esphome:\n  name: test_archive\n"
 
 
+@pytest.mark.asyncio
+async def test_archive_handler_with_build_folder(
+    dashboard: DashboardTestHelper,
+    mock_archive_storage_path: MagicMock,
+    mock_ext_storage_path: MagicMock,
+    mock_dashboard_settings: MagicMock,
+    mock_storage_json: MagicMock,
+    tmp_path: Path,
+) -> None:
+    """Test ArchiveRequestHandler.post with storage_json and build folder."""
+    config_dir = tmp_path / "config"
+    config_dir.mkdir()
+    archive_dir = tmp_path / "archive"
+    archive_dir.mkdir()
+    build_dir = tmp_path / "build"
+    build_dir.mkdir()
+
+    configuration = "test_device.yaml"
+    test_config = config_dir / configuration
+    test_config.write_text("esphome:\n  name: test_device\n")
+
+    build_folder = build_dir / "test_device"
+    build_folder.mkdir()
+    (build_folder / "firmware.bin").write_text("binary content")
+    (build_folder / ".pioenvs").mkdir()
+
+    mock_dashboard_settings.config_dir = str(config_dir)
+    mock_dashboard_settings.rel_path.return_value = str(test_config)
+    mock_archive_storage_path.return_value = str(archive_dir)
+
+    mock_storage = MagicMock()
+    mock_storage.name = "test_device"
+    mock_storage.build_path = str(build_folder)
+    mock_storage_json.load.return_value = mock_storage
+
+    response = await dashboard.fetch(
+        "/archive",
+        method="POST",
+        body=f"configuration={configuration}",
+        headers={"Content-Type": "application/x-www-form-urlencoded"},
+    )
+    assert response.code == 200
+
+    assert not test_config.exists()
+    assert (archive_dir / configuration).exists()
+
+    assert not build_folder.exists()
+    assert not (archive_dir / "test_device").exists()
+
+
+@pytest.mark.asyncio
+async def test_archive_handler_no_build_folder(
+    dashboard: DashboardTestHelper,
+    mock_archive_storage_path: MagicMock,
+    mock_ext_storage_path: MagicMock,
+    mock_dashboard_settings: MagicMock,
+    mock_storage_json: MagicMock,
+    tmp_path: Path,
+) -> None:
+    """Test ArchiveRequestHandler.post with storage_json but no build folder."""
+    config_dir = tmp_path / "config"
+    config_dir.mkdir()
+    archive_dir = tmp_path / "archive"
+    archive_dir.mkdir()
+
+    configuration = "test_device.yaml"
+    test_config = config_dir / configuration
+    test_config.write_text("esphome:\n  name: test_device\n")
+
+    mock_dashboard_settings.config_dir = str(config_dir)
+    mock_dashboard_settings.rel_path.return_value = str(test_config)
+    mock_archive_storage_path.return_value = str(archive_dir)
+
+    mock_storage = MagicMock()
+    mock_storage.name = "test_device"
+    mock_storage.build_path = None
+    mock_storage_json.load.return_value = mock_storage
+
+    response = await dashboard.fetch(
+        "/archive",
+        method="POST",
+        body=f"configuration={configuration}",
+        headers={"Content-Type": "application/x-www-form-urlencoded"},
+    )
+    assert response.code == 200
+
+    assert not test_config.exists()
+    assert (archive_dir / configuration).exists()
+    assert not (archive_dir / "test_device").exists()
+
+
 @pytest.mark.skipif(os.name == "nt", reason="Unix sockets are not supported on Windows")
 @pytest.mark.usefixtures("mock_trash_storage_path", "mock_archive_storage_path")
 def test_start_web_server_with_unix_socket(tmp_path: Path) -> None:
diff --git a/tests/unit_tests/core/test_config.py b/tests/unit_tests/core/test_config.py
index e520db9e33..7d3b90794b 100644
--- a/tests/unit_tests/core/test_config.py
+++ b/tests/unit_tests/core/test_config.py
@@ -384,6 +384,9 @@ def test_preload_core_config_basic(setup_core: Path) -> None:
     assert platform == "esp32"
     assert KEY_CORE in CORE.data
     assert CONF_BUILD_PATH in config[CONF_ESPHOME]
+    # Verify default build path is "build/<device_name>"
+    build_path = config[CONF_ESPHOME][CONF_BUILD_PATH]
+    assert build_path.endswith(os.path.join("build", "test_device"))
 
 
 def test_preload_core_config_with_build_path(setup_core: Path) -> None:
@@ -418,6 +421,12 @@ def test_preload_core_config_env_build_path(setup_core: Path) -> None:
 
     assert CONF_BUILD_PATH in config[CONF_ESPHOME]
     assert "test_device" in config[CONF_ESPHOME][CONF_BUILD_PATH]
+    # Verify it uses the env var path with device name appended
+    build_path = config[CONF_ESPHOME][CONF_BUILD_PATH]
+    expected_path = os.path.join("/env/build", "test_device")
+    assert build_path == expected_path or build_path == expected_path.replace(
+        "/", os.sep
+    )
     assert platform == "rp2040"