diff --git a/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/KotlinSelectNestedClassRefactoringDialog.kt b/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/KotlinSelectNestedClassRefactoringDialog.kt
index 33715a17854..682b26dbb90 100644
--- a/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/KotlinSelectNestedClassRefactoringDialog.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/KotlinSelectNestedClassRefactoringDialog.kt
@@ -5,9 +5,9 @@
 
 package org.jetbrains.kotlin.idea.refactoring.move.moveDeclarations.ui
 
-import com.intellij.BundleBase
 import com.intellij.openapi.project.Project
 import com.intellij.openapi.ui.DialogWrapper
+import com.intellij.psi.PsiDirectory
 import com.intellij.psi.PsiElement
 import com.intellij.refactoring.RefactoringBundle
 import com.intellij.refactoring.util.RadioUpDownListener
@@ -99,10 +99,7 @@ internal class KotlinSelectNestedClassRefactoringDialog private constructor(
         fun chooseNestedClassRefactoring(nestedClass: KtClassOrObject, targetContainer: PsiElement?) {
             val project = nestedClass.project
             val dialog = when {
-                targetContainer != null && targetContainer !is KtClassOrObject ||
-                        nestedClass is KtClass && nestedClass.isInner() -> {
-                    MoveKotlinNestedClassesToUpperLevelDialog(nestedClass, targetContainer)
-                }
+                targetContainer.isUpperLevelFor(nestedClass) -> MoveKotlinNestedClassesToUpperLevelDialog(nestedClass, targetContainer)
                 nestedClass is KtEnumEntry -> return
                 else -> {
                     val selectionDialog =
@@ -118,5 +115,9 @@ internal class KotlinSelectNestedClassRefactoringDialog private constructor(
             }
             dialog?.show()
         }
+
+        private fun PsiElement?.isUpperLevelFor(nestedClass: KtClassOrObject) =
+            this != null && this !is KtClassOrObject && this !is PsiDirectory ||
+                    nestedClass is KtClass && nestedClass.isInner()
     }
 }
\ No newline at end of file
diff --git a/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/MoveKotlinNestedClassesToUpperLevelModel.kt b/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/MoveKotlinNestedClassesToUpperLevelModel.kt
index ab07319253d..7562e42ba37 100644
--- a/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/MoveKotlinNestedClassesToUpperLevelModel.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/refactoring/move/moveDeclarations/ui/MoveKotlinNestedClassesToUpperLevelModel.kt
@@ -30,6 +30,7 @@ import org.jetbrains.kotlin.idea.refactoring.move.moveDeclarations.*
 import org.jetbrains.kotlin.idea.roots.getSuitableDestinationSourceRoots
 import org.jetbrains.kotlin.idea.statistics.MoveRefactoringFUSCollector.MovedEntity
 import org.jetbrains.kotlin.idea.statistics.MoveRefactoringFUSCollector.MoveRefactoringDestination
+import org.jetbrains.kotlin.idea.util.projectStructure.module
 import org.jetbrains.kotlin.incremental.components.NoLookupLocation
 import org.jetbrains.kotlin.name.Name
 import org.jetbrains.kotlin.psi.KtClassOrObject
@@ -66,8 +67,8 @@ internal abstract class MoveKotlinNestedClassesToUpperLevelModel(
             val targetName = packageName
             if (oldPackageFqName?.asString() != targetName) {
                 val projectRootManager = ProjectRootManager.getInstance(project)
-
-                val contentSourceRoots = getSuitableDestinationSourceRoots(project)
+                val contentSourceRoots = target.module?.let { getSuitableDestinationSourceRoots(it) }
+                    ?: getSuitableDestinationSourceRoots(project)
                 val newPackage = PackageWrapper(PsiManager.getInstance(project), targetName)
 
                 val targetSourceRoot: VirtualFile
diff --git a/idea/src/org/jetbrains/kotlin/idea/roots/projectRootUtils.kt b/idea/src/org/jetbrains/kotlin/idea/roots/projectRootUtils.kt
index 5eb63a27dd1..09b0c07790f 100644
--- a/idea/src/org/jetbrains/kotlin/idea/roots/projectRootUtils.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/roots/projectRootUtils.kt
@@ -130,6 +130,12 @@ fun getSuitableDestinationSourceRoots(project: Project): List<VirtualFile> {
     return roots
 }
 
+fun getSuitableDestinationSourceRoots(module: Module): MutableList<VirtualFile> {
+    val roots = ArrayList<VirtualFile>()
+    collectSuitableDestinationSourceRoots(module, roots)
+    return roots
+}
+
 fun collectSuitableDestinationSourceRoots(module: Module, result: MutableList<VirtualFile>) {
     for (entry in ModuleRootManager.getInstance(module).contentEntries) {
         for (sourceFolder in entry.getSourceFolders(KOTLIN_AWARE_SOURCE_ROOT_TYPES)) {