diff --git a/compiler/cli/src/org/jetbrains/kotlin/cli/common/CLICompiler.java b/compiler/cli/src/org/jetbrains/kotlin/cli/common/CLICompiler.java
index e9839af7cb3..f86476edb90 100644
--- a/compiler/cli/src/org/jetbrains/kotlin/cli/common/CLICompiler.java
+++ b/compiler/cli/src/org/jetbrains/kotlin/cli/common/CLICompiler.java
@@ -204,7 +204,7 @@ public abstract class CLICompiler<A extends CommonCompilerArguments> extends CLI
             extraLanguageFeatures.put(LanguageFeature.Coroutines, coroutinesState);
         }
 
-        if (arguments.getNewInference() || configuration.getBoolean(CommonConfigurationKeys.USE_NEW_INFERENCE)) {
+        if (arguments.getNewInference()) {
             extraLanguageFeatures.put(LanguageFeature.NewInference, LanguageFeature.State.ENABLED);
         }
 
diff --git a/compiler/cli/src/org/jetbrains/kotlin/cli/js/K2JSCompiler.java b/compiler/cli/src/org/jetbrains/kotlin/cli/js/K2JSCompiler.java
index fec957fd4c0..9291c343feb 100644
--- a/compiler/cli/src/org/jetbrains/kotlin/cli/js/K2JSCompiler.java
+++ b/compiler/cli/src/org/jetbrains/kotlin/cli/js/K2JSCompiler.java
@@ -204,7 +204,6 @@ public class K2JSCompiler extends CLICompiler<K2JSCompilerArguments> {
         File outputFile = new File(arguments.getOutputFile());
 
         configuration.put(CommonConfigurationKeys.MODULE_NAME, FileUtil.getNameWithoutExtension(outputFile));
-        configuration.put(CommonConfigurationKeys.USE_NEW_INFERENCE, arguments.getNewInference());
 
         JsConfig config = new JsConfig(project, configuration);
         JsConfig.Reporter reporter = new JsConfig.Reporter() {
diff --git a/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/K2JVMCompiler.kt b/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/K2JVMCompiler.kt
index 7a2b539d448..aaa07cbb67a 100644
--- a/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/K2JVMCompiler.kt
+++ b/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/K2JVMCompiler.kt
@@ -355,8 +355,6 @@ class K2JVMCompiler : CLICompiler<K2JVMCompilerArguments>() {
         }
 
         private fun putAdvancedOptions(configuration: CompilerConfiguration, arguments: K2JVMCompilerArguments) {
-            configuration.put(CommonConfigurationKeys.USE_NEW_INFERENCE, arguments.newInference)
-
             configuration.put(JVMConfigurationKeys.DISABLE_CALL_ASSERTIONS, arguments.noCallAssertions)
             configuration.put(JVMConfigurationKeys.DISABLE_RECEIVER_ASSERTIONS, arguments.noReceiverAssertions)
             configuration.put(JVMConfigurationKeys.DISABLE_PARAM_ASSERTIONS, arguments.noParamAssertions)
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/config/CommonConfigurationKeys.kt b/compiler/frontend/src/org/jetbrains/kotlin/config/CommonConfigurationKeys.kt
index e840f9d1be9..9567eb58f7c 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/config/CommonConfigurationKeys.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/config/CommonConfigurationKeys.kt
@@ -33,9 +33,6 @@ object CommonConfigurationKeys {
 
     @JvmField
     val LOOKUP_TRACKER = CompilerConfigurationKey.create<LookupTracker>("lookup tracker")
-
-    @JvmField
-    val USE_NEW_INFERENCE = CompilerConfigurationKey.create<Boolean>("use new inference")
 }
 
 var CompilerConfiguration.languageVersionSettings: LanguageVersionSettings
diff --git a/compiler/tests-common/tests/org/jetbrains/kotlin/test/KotlinTestUtils.java b/compiler/tests-common/tests/org/jetbrains/kotlin/test/KotlinTestUtils.java
index f10ea03e0af..b33c424b023 100644
--- a/compiler/tests-common/tests/org/jetbrains/kotlin/test/KotlinTestUtils.java
+++ b/compiler/tests-common/tests/org/jetbrains/kotlin/test/KotlinTestUtils.java
@@ -50,6 +50,7 @@ import org.jetbrains.annotations.TestOnly;
 import org.jetbrains.kotlin.analyzer.AnalysisResult;
 import org.jetbrains.kotlin.builtins.DefaultBuiltIns;
 import org.jetbrains.kotlin.builtins.KotlinBuiltIns;
+import org.jetbrains.kotlin.checkers.CompilerTestLanguageVersionSettings;
 import org.jetbrains.kotlin.cli.common.CLIConfigurationKeys;
 import org.jetbrains.kotlin.cli.common.messages.CompilerMessageLocation;
 import org.jetbrains.kotlin.cli.common.messages.CompilerMessageSeverity;
@@ -58,10 +59,7 @@ import org.jetbrains.kotlin.cli.jvm.compiler.EnvironmentConfigFiles;
 import org.jetbrains.kotlin.cli.jvm.compiler.KotlinCoreEnvironment;
 import org.jetbrains.kotlin.cli.jvm.config.JvmContentRootsKt;
 import org.jetbrains.kotlin.codegen.forTestCompile.ForTestCompileRuntime;
-import org.jetbrains.kotlin.config.CommonConfigurationKeys;
-import org.jetbrains.kotlin.config.CompilerConfiguration;
-import org.jetbrains.kotlin.config.ContentRootsKt;
-import org.jetbrains.kotlin.config.JVMConfigurationKeys;
+import org.jetbrains.kotlin.config.*;
 import org.jetbrains.kotlin.descriptors.impl.ModuleDescriptorImpl;
 import org.jetbrains.kotlin.diagnostics.Diagnostic;
 import org.jetbrains.kotlin.diagnostics.Errors;
@@ -471,7 +469,16 @@ public class KotlinTestUtils {
     public static CompilerConfiguration newConfiguration() {
         CompilerConfiguration configuration = new CompilerConfiguration();
         configuration.put(CommonConfigurationKeys.MODULE_NAME, TEST_MODULE_NAME);
-        configuration.put(CommonConfigurationKeys.USE_NEW_INFERENCE, "true".equals(System.getProperty("kotlin.ni")));
+
+        if ("true".equals(System.getProperty("kotlin.ni"))) {
+            // Enable new inference for tests which do not declare their own language version settings
+            CommonConfigurationKeysKt.setLanguageVersionSettings(configuration, new CompilerTestLanguageVersionSettings(
+                    Collections.emptyMap(),
+                    LanguageVersionSettingsImpl.DEFAULT.getApiVersion(),
+                    LanguageVersionSettingsImpl.DEFAULT.getLanguageVersion(),
+                    Collections.emptyMap()
+            ));
+        }
 
         configuration.put(CLIConfigurationKeys.MESSAGE_COLLECTOR_KEY, new MessageCollector() {
             @Override