diff --git a/compiler/util-io/src/org/jetbrains/kotlin/konan/properties/Properties.kt b/compiler/util-io/src/org/jetbrains/kotlin/konan/properties/Properties.kt
index c4924226a69..2b4a2ba94dd 100644
--- a/compiler/util-io/src/org/jetbrains/kotlin/konan/properties/Properties.kt
+++ b/compiler/util-io/src/org/jetbrains/kotlin/konan/properties/Properties.kt
@@ -107,13 +107,33 @@ fun Properties.resolvablePropertyString(
  */
 private fun String.resolveValue(properties: Properties, visitedProperties: MutableSet<String> = mutableSetOf()): List<String> =
     when {
-        startsWith("$") -> {
-            val property = this.substringAfter('$')
+        contains("$") -> {
+            val prefix = this.substringBefore('$', missingDelimiterValue = "")
+            val withoutSigil = this.substringAfter('$')
+            val property = withoutSigil.substringBefore('/')
+            val relative = withoutSigil.substringAfter('/', missingDelimiterValue = "")
             // Keep track of visited properties to avoid running in circles.
             if (!visitedProperties.add(property)) {
                 error("Circular dependency: ${visitedProperties.joinToString()}")
             }
-            properties.resolvablePropertyList(property, visitedProperties = visitedProperties)
+            val substitutionResult = properties.resolvablePropertyList(property, visitedProperties = visitedProperties)
+            when {
+                substitutionResult.size > 1 -> when {
+                    relative.isNotEmpty() ->
+                        error("Cannot append `/$relative` to multiple values: ${substitutionResult.joinToString()}")
+                    prefix.isNotEmpty() ->
+                        error("Cannot add prefix `$prefix` to multiple values: ${substitutionResult.joinToString()}")
+                    else -> substitutionResult
+                }
+                else -> substitutionResult.map {
+                    // Avoid repeated '/' at the end.
+                    if (relative.isNotEmpty()) {
+                        "$prefix${it.dropLastWhile { it == '/' }}/$relative"
+                    } else {
+                        "$prefix$it"
+                    }
+                }
+            }
         }
         else -> listOf(this)
     }
diff --git a/compiler/util-io/test/org/jetbrains/kotlin/konan/properties/ResolvablePropertiesTests.kt b/compiler/util-io/test/org/jetbrains/kotlin/konan/properties/ResolvablePropertiesTests.kt
index bad1a5725a4..d3e0602f17f 100644
--- a/compiler/util-io/test/org/jetbrains/kotlin/konan/properties/ResolvablePropertiesTests.kt
+++ b/compiler/util-io/test/org/jetbrains/kotlin/konan/properties/ResolvablePropertiesTests.kt
@@ -65,6 +65,61 @@ class ResolvablePropertiesTests {
         props.resolvablePropertyString("k1")
     }
 
+    @Test
+    fun `trivial relative path`() {
+        val props = propertiesOf(
+            "k1" to "v1",
+            "k2" to "\$k1/sysroot"
+        )
+        assertEquals("v1/sysroot", props.resolvablePropertyString("k2"))
+    }
+
+    @Test
+    fun `two-fold relative path`() {
+        val props = propertiesOf(
+            "k1" to "v1",
+            "k2" to "\$k1/toolchain",
+            "k3" to "\$k2/sysroot"
+        )
+        assertEquals("v1/toolchain/sysroot", props.resolvablePropertyString("k3"))
+    }
+
+    @Test
+    fun `absolute path`() {
+        val props = propertiesOf(
+            "k1" to "/",
+            "k2" to "\$k1/bin"
+        )
+        assertEquals("/bin", props.resolvablePropertyString("k2"))
+    }
+
+    @Test(expected = java.lang.IllegalStateException::class)
+    fun `incorrect relative path`() {
+        val props = propertiesOf(
+            "k1" to "v1 v2",
+            "k2" to "\$k1/sysroot"
+        )
+        props.resolvablePropertyString("k2")
+    }
+
+    @Test
+    fun `simple prefix`() {
+        val props = propertiesOf(
+            "k1" to "v1",
+            "k2" to "--key=\$k1"
+        )
+        assertEquals("--key=v1", props.resolvablePropertyString("k2"))
+    }
+
+    @Test
+    fun `with prefix and relative`() {
+        val props = propertiesOf(
+            "absoluteTargetSysRoot" to "/",
+            "include" to "-I\$absoluteTargetSysRoot/usr/include/c++/4.9.4"
+        )
+        assertEquals("-I/usr/include/c++/4.9.4", props.resolvablePropertyString("include"))
+    }
+
     companion object {
         private fun propertiesOf(vararg pairs: Pair<String, Any>): Properties =
             Properties().also {