diff --git a/esphome/dashboard/web_server.py b/esphome/dashboard/web_server.py
index e4c0b5b84a..ef6ec061cd 100644
--- a/esphome/dashboard/web_server.py
+++ b/esphome/dashboard/web_server.py
@@ -1038,12 +1038,11 @@ 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:
-            # Move build folder to archive (if exists)
-            name = storage_json.name
-            build_folder = os.path.join(settings.config_dir, name)
+        if storage_json is not None and storage_json.build_path:
+            # Delete build folder (if exists)
+            build_folder = storage_json.build_path
             if os.path.exists(build_folder):
-                shutil.move(build_folder, os.path.join(archive_path, name))
+                shutil.rmtree(build_folder, ignore_errors=True)
 
 
 class UnArchiveRequestHandler(BaseHandler):
diff --git a/tests/dashboard/test_web_server.py b/tests/dashboard/test_web_server.py
index ea14309997..6bb9a04f6c 100644
--- a/tests/dashboard/test_web_server.py
+++ b/tests/dashboard/test_web_server.py
@@ -634,14 +634,16 @@ async def test_archive_handler_with_build_folder(
     config_dir.mkdir()
     archive_dir = tmp_path / "archive"
     archive_dir.mkdir()
+    build_dir = tmp_path / "build"
+    build_dir.mkdir()
 
     # Create a test configuration file
     configuration = "test_device.yaml"
     test_config = config_dir / configuration
     test_config.write_text("esphome:\n  name: test_device\n")
 
-    # Create build folder with content
-    build_folder = config_dir / "test_device"
+    # Create build folder with content (in proper location)
+    build_folder = build_dir / "test_device"
     build_folder.mkdir()
     (build_folder / "firmware.bin").write_text("binary content")
     (build_folder / ".pioenvs").mkdir()
@@ -651,10 +653,11 @@ async def test_archive_handler_with_build_folder(
     mock_dashboard_settings.rel_path.return_value = str(test_config)
     mock_archive_storage_path.return_value = str(archive_dir)
 
-    # Mock storage_json with device name
+    # Mock storage_json with device name and build_path
     with patch("esphome.dashboard.web_server.StorageJSON.load") as mock_load:
         mock_storage = MagicMock()
         mock_storage.name = "test_device"
+        mock_storage.build_path = str(build_folder)
         mock_load.return_value = mock_storage
 
         # Archive the configuration
@@ -670,10 +673,10 @@ async def test_archive_handler_with_build_folder(
     assert not test_config.exists()
     assert (archive_dir / configuration).exists()
 
-    # Verify build folder was moved to archive
+    # Verify build folder was deleted (not archived)
     assert not build_folder.exists()
-    assert (archive_dir / "test_device").exists()
-    assert (archive_dir / "test_device" / "firmware.bin").exists()
+    # Build folder should NOT be in archive
+    assert not (archive_dir / "test_device").exists()
 
 
 @pytest.mark.asyncio
@@ -703,10 +706,11 @@ async def test_archive_handler_no_build_folder(
     mock_dashboard_settings.rel_path.return_value = str(test_config)
     mock_archive_storage_path.return_value = str(archive_dir)
 
-    # Mock storage_json with device name
+    # Mock storage_json with device name but no build_path
     with patch("esphome.dashboard.web_server.StorageJSON.load") as mock_load:
         mock_storage = MagicMock()
         mock_storage.name = "test_device"
+        mock_storage.build_path = None
         mock_load.return_value = mock_storage
 
         # Archive the configuration (should not fail even without build folder)