diff --git a/RELEASE_NOTES.md b/RELEASE_NOTES.md
index 1c5ddd8004..8a64f1fa9f 100644
--- a/RELEASE_NOTES.md
+++ b/RELEASE_NOTES.md
@@ -1,3 +1,6 @@
+#### 1.6.4 - 28.05.2015
+* Make the output path relative to the dependencies file - https://github.com/fsprojects/Paket/issues/829
+
 #### 1.6.3 - 28.05.2015
 * BUGFIX: Parse NuGet package prerelease versions containing "-" - https://github.com/fsprojects/Paket/issues/841
 
diff --git a/src/Paket.Core/PackageProcess.fs b/src/Paket.Core/PackageProcess.fs
index 1ea3f21e99..c63dbde0d6 100644
--- a/src/Paket.Core/PackageProcess.fs
+++ b/src/Paket.Core/PackageProcess.fs
@@ -11,9 +11,10 @@ open Paket.PackageMetaData
 open Chessie.ErrorHandling
 
 let Pack(dependencies : DependenciesFile, packageOutputPath, buildConfig, version, releaseNotes, templateFile) =
-    let buildConfig = defaultArg buildConfig "Release"  
-    Utils.createDir packageOutputPath |> returnOrFail
+    let buildConfig = defaultArg buildConfig "Release"
     let rootPath = dependencies.FileName |> Path.GetDirectoryName
+    let packageOutputPath = if Path.IsPathRooted(packageOutputPath) then packageOutputPath else Path.Combine(rootPath,packageOutputPath)
+    Utils.createDir packageOutputPath |> returnOrFail
 
     let version = version |> Option.map SemVer.Parse