diff --git a/packages/schematics/angular/migrations/migration-collection.json b/packages/schematics/angular/migrations/migration-collection.json
index d7bf9151f72f..baa6be30f7a6 100644
--- a/packages/schematics/angular/migrations/migration-collection.json
+++ b/packages/schematics/angular/migrations/migration-collection.json
@@ -115,6 +115,11 @@
       "factory": "./update-12/update-web-workers",
       "description": "Updates Web Worker consumer usage to use the new syntax supported directly by Webpack 5."
     },
+    "schematic-options-12": {
+      "version": "12.0.1",
+      "factory": "./update-12/schematic-options",
+      "description": "Remove invalid 'skipTests' option in '@schematics/angular:module' Angular schematic options."
+    },
     "production-by-default": {
       "version": "9999.0.0",
       "factory": "./update-12/production-default-config",
diff --git a/packages/schematics/angular/migrations/update-12/schematic-options.ts b/packages/schematics/angular/migrations/update-12/schematic-options.ts
new file mode 100644
index 000000000000..50870ef2be64
--- /dev/null
+++ b/packages/schematics/angular/migrations/update-12/schematic-options.ts
@@ -0,0 +1,41 @@
+/**
+ * @license
+ * Copyright Google LLC All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.io/license
+ */
+
+import { json } from '@angular-devkit/core';
+import { Rule } from '@angular-devkit/schematics';
+import { updateWorkspace } from '../../utility/workspace';
+
+export default function (): Rule {
+  return updateWorkspace((workspace) => {
+    // Update root level schematics options if present
+    const rootSchematics = workspace.extensions.schematics;
+    if (rootSchematics && json.isJsonObject(rootSchematics)) {
+      updateSchematicsField(rootSchematics);
+    }
+
+    // Update project level schematics options if present
+    for (const [, project] of workspace.projects) {
+      const projectSchematics = project.extensions.schematics;
+      if (projectSchematics && json.isJsonObject(projectSchematics)) {
+        updateSchematicsField(projectSchematics);
+      }
+    }
+  });
+}
+
+function updateSchematicsField(schematics: json.JsonObject): void {
+  for (const [schematicName, schematicOptions] of Object.entries(schematics)) {
+    if (!json.isJsonObject(schematicOptions)) {
+      continue;
+    }
+
+    if (schematicName === '@schematics/angular:module') {
+      delete schematicOptions.skipTests;
+    }
+  }
+}
diff --git a/packages/schematics/angular/migrations/update-12/schematic-options_spec.ts b/packages/schematics/angular/migrations/update-12/schematic-options_spec.ts
new file mode 100644
index 000000000000..f9891f62a367
--- /dev/null
+++ b/packages/schematics/angular/migrations/update-12/schematic-options_spec.ts
@@ -0,0 +1,76 @@
+/**
+ * @license
+ * Copyright Google LLC All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.io/license
+ */
+
+import { EmptyTree } from '@angular-devkit/schematics';
+import { SchematicTestRunner, UnitTestTree } from '@angular-devkit/schematics/testing';
+
+describe('Migration to remove schematics old options in angular.json', () => {
+  const workspacePath = '/angular.json';
+  const schematicName = 'schematic-options-12';
+
+  const schematicRunner = new SchematicTestRunner(
+    'migrations',
+    require.resolve('../migration-collection.json'),
+  );
+
+  let tree: UnitTestTree;
+
+  beforeEach(async () => {
+    tree = new UnitTestTree(new EmptyTree());
+    tree = await schematicRunner
+      .runExternalSchematicAsync(
+        require.resolve('../../collection.json'),
+        'ng-new',
+        {
+          name: 'migration-test',
+          version: '1.2.3',
+          directory: '.',
+        },
+        tree,
+      )
+      .toPromise();
+  });
+
+  describe('schematic options', () => {
+    it('should remove `skipTests` from `@schematics/angular:module`', async () => {
+      const workspace = JSON.parse(tree.readContent(workspacePath));
+      workspace.schematics = {
+        '@schematics/angular:module': {
+          skipTests: true,
+        },
+      };
+      tree.overwrite(workspacePath, JSON.stringify(workspace, undefined, 2));
+
+      const tree2 = await schematicRunner
+        .runSchematicAsync(schematicName, {}, tree.branch())
+        .toPromise();
+      const { schematics } = JSON.parse(tree2.readContent(workspacePath));
+      expect(schematics['@schematics/angular:module'].skipTests).toBeUndefined();
+    });
+
+    it('should not remove `skipTests` from non `@schematics/angular:module` schematic', async () => {
+      const workspace = JSON.parse(tree.readContent(workspacePath));
+      workspace.schematics = {
+        '@schematics/angular:component': {
+          skipTests: true,
+        },
+        '@schematics/some-other:module': {
+          skipTests: true,
+        },
+      };
+      tree.overwrite(workspacePath, JSON.stringify(workspace, undefined, 2));
+
+      const tree2 = await schematicRunner
+        .runSchematicAsync(schematicName, {}, tree.branch())
+        .toPromise();
+      const { schematics } = JSON.parse(tree2.readContent(workspacePath));
+      expect(schematics['@schematics/angular:component'].skipTests).toBeTrue();
+      expect(schematics['@schematics/some-other:module'].skipTests).toBeTrue();
+    });
+  });
+});