diff --git a/app/app.go b/app/app.go
index 9acdfd0b3..3605e9c22 100644
--- a/app/app.go
+++ b/app/app.go
@@ -202,6 +202,7 @@ func NewAxelarApp(
 	loadLatest bool,
 	skipUpgradeHeights map[int64]bool,
 	homePath string,
+	wasmDir string,
 	invCheckPeriod uint,
 	encodingConfig axelarParams.EncodingConfig,
 	appOpts servertypes.AppOptions,
@@ -255,7 +256,12 @@ func NewAxelarApp(
 	SetKeeper(keepers, initAxelarIBCKeeper(keepers))
 
 	if IsWasmEnabled() {
-		SetKeeper(keepers, initWasmKeeper(encodingConfig, keys, keepers, bApp, appOpts, wasmOpts, homePath))
+		if wasmDir == "" {
+			dbDir := cast.ToString(appOpts.Get("db_dir"))
+			wasmDir = filepath.Join(homePath, dbDir, "wasm")
+		}
+
+		SetKeeper(keepers, initWasmKeeper(encodingConfig, keys, keepers, bApp, appOpts, wasmOpts, wasmDir))
 		SetKeeper(keepers, initWasmContractKeeper(keepers))
 
 		// set the contract keeper for the Ics20WasmHooks
diff --git a/app/app_test.go b/app/app_test.go
index 558f4689a..a8698b0e1 100644
--- a/app/app_test.go
+++ b/app/app_test.go
@@ -41,6 +41,7 @@ func TestNewAxelarApp(t *testing.T) {
 					true,
 					nil,
 					"",
+					"",
 					0,
 					app.MakeEncodingConfig(),
 					simapp.EmptyAppOptions{},
diff --git a/app/keepers.go b/app/keepers.go
index 94cf736de..e8ae81af4 100644
--- a/app/keepers.go
+++ b/app/keepers.go
@@ -2,7 +2,6 @@ package app
 
 import (
 	"fmt"
-	"path/filepath"
 	"reflect"
 	"strings"
 
@@ -162,8 +161,7 @@ func InitStakingKeeper(appCodec codec.Codec, keys map[string]*sdk.KVStoreKey, ke
 	return &stakingK
 }
 
-func initWasmKeeper(encodingConfig axelarParams.EncodingConfig, keys map[string]*sdk.KVStoreKey, keepers *KeeperCache, bApp *bam.BaseApp, appOpts types.AppOptions, wasmOpts []wasm.Option, homePath string) *wasm.Keeper {
-	wasmDir := filepath.Join(homePath, "wasm")
+func initWasmKeeper(encodingConfig axelarParams.EncodingConfig, keys map[string]*sdk.KVStoreKey, keepers *KeeperCache, bApp *bam.BaseApp, appOpts types.AppOptions, wasmOpts []wasm.Option, wasmDir string) *wasm.Keeper {
 	wasmConfig := mustReadWasmConfig(appOpts)
 
 	// The last arguments can contain custom message handlers, and custom query handlers,
diff --git a/cmd/axelard/cmd/root.go b/cmd/axelard/cmd/root.go
index 5f9f3d685..045f0b718 100644
--- a/cmd/axelard/cmd/root.go
+++ b/cmd/axelard/cmd/root.go
@@ -47,7 +47,10 @@ import (
 	axelarnet "github.com/axelarnetwork/axelar-core/x/axelarnet/exported"
 )
 
-var minGasPrice = "0.007" + axelarnet.NativeAsset
+var (
+	minGasPrice = "0.007" + axelarnet.NativeAsset
+	wasmDirFlag = "wasm-dir"
+)
 
 // NewRootCmd creates a new root command for axelard. It is called once in the
 // main function.
@@ -201,7 +204,12 @@ func initRootCmd(rootCmd *cobra.Command, encodingConfig params.EncodingConfig) {
 		SetGenesisAuthCmd(app.DefaultNodeHome),
 	)
 
-	server.AddCommands(rootCmd, app.DefaultNodeHome, newApp, export(encodingConfig), crisis.AddModuleInitFlags)
+	starterFlags := func(startCmd *cobra.Command) {
+		crisis.AddModuleInitFlags(startCmd)
+		startCmd.Flags().String(wasmDirFlag, "", "path to the wasm directory, by default set to 'wasm' directory inside the '--db_dir' directory")
+	}
+
+	server.AddCommands(rootCmd, app.DefaultNodeHome, newApp, export(encodingConfig), starterFlags)
 
 	// add keybase, auxiliary RPC, query, and tx child commands
 	rootCmd.AddCommand(
@@ -264,6 +272,7 @@ func newApp(logger log.Logger, db dbm.DB, traceStore io.Writer, appOpts serverty
 	return app.NewAxelarApp(
 		logger, db, traceStore, true, skipUpgradeHeights,
 		cast.ToString(appOpts.Get(flags.FlagHome)),
+		cast.ToString(appOpts.Get(wasmDirFlag)),
 		cast.ToUint(appOpts.Get(server.FlagInvCheckPeriod)),
 		app.MakeEncodingConfig(),
 		appOpts,
@@ -291,7 +300,8 @@ func export(encCfg params.EncodingConfig) servertypes.AppExporter {
 			return servertypes.ExportedApp{}, errors.New("application home not set")
 		}
 
-		aApp := app.NewAxelarApp(logger, db, traceStore, height == -1, map[int64]bool{}, homePath,
+		wasmdir := cast.ToString(appOpts.Get(wasmDirFlag))
+		aApp := app.NewAxelarApp(logger, db, traceStore, height == -1, map[int64]bool{}, homePath, wasmdir,
 			cast.ToUint(appOpts.Get(server.FlagInvCheckPeriod)), encCfg, appOpts, []wasm.Option{})
 		if height != -1 {
 			if err := aApp.LoadHeight(height); err != nil {
diff --git a/docs/cli/axelard_start.md b/docs/cli/axelard_start.md
index 5ba47b2c5..b82c4d9a7 100644
--- a/docs/cli/axelard_start.md
+++ b/docs/cli/axelard_start.md
@@ -88,6 +88,7 @@ axelard start [flags]
       --trace-store string                              Enable KVStore tracing to an output file
       --transport string                                Transport protocol: socket, grpc (default "socket")
       --unsafe-skip-upgrades ints                       Skip a set of upgrade heights to continue the old binary
+      --wasm-dir string                                 path to the wasm directory, by default set to 'wasm' directory inside the '--db_dir' directory
       --with-tendermint                                 Run abci app embedded in-process with tendermint (default true)
       --x-crisis-skip-assert-invariants                 Skip x/crisis invariants check on startup
 ```