diff --git a/dvc/output/local.py b/dvc/output/local.py
index ecdeafdae3..f698a123a9 100644
--- a/dvc/output/local.py
+++ b/dvc/output/local.py
@@ -7,9 +7,11 @@
 from dvc.istextfile import istextfile
 from dvc.output.base import OutputBase
 from dvc.remote.local import RemoteLOCAL
+from dvc.utils import relpath
 from dvc.utils.compat import fspath_py35
 from dvc.utils.compat import str
 from dvc.utils.compat import urlparse
+from dvc.utils.fs import path_isin
 
 
 logger = logging.getLogger(__name__)
@@ -38,7 +40,14 @@ def _parse_path(self, remote, path):
         return self.REMOTE.path_cls(abs_p)
 
     def __str__(self):
-        return str(self.path_info)
+        if not self.is_in_repo:
+            return str(self.def_path)
+
+        cur_dir = os.getcwd()
+        if path_isin(cur_dir, self.repo.root_dir):
+            return relpath(self.path_info, cur_dir)
+
+        return relpath(self.path_info, self.repo.root_dir)
 
     @property
     def fspath(self):
diff --git a/tests/unit/output/test_local.py b/tests/unit/output/test_local.py
index 0999472c6f..82d671cf73 100644
--- a/tests/unit/output/test_local.py
+++ b/tests/unit/output/test_local.py
@@ -1,8 +1,10 @@
-from mock import patch
+import os
 
+from mock import patch
 from dvc.output import OutputLOCAL
 from dvc.remote.local import RemoteLOCAL
 from dvc.stage import Stage
+from dvc.utils import relpath
 from tests.basic_env import TestDvc
 
 
@@ -21,6 +23,34 @@ def test_save_missing(self):
                 o.save()
 
 
+def test_str_workdir_outside_repo(erepo):
+    stage = Stage(erepo.dvc)
+    output = OutputLOCAL(stage, "path", cache=False)
+
+    assert relpath("path", erepo.dvc.root_dir) == str(output)
+
+
+def test_str_workdir_inside_repo(dvc_repo):
+    stage = Stage(dvc_repo)
+    output = OutputLOCAL(stage, "path", cache=False)
+
+    assert "path" == str(output)
+
+    stage = Stage(dvc_repo, wdir="some_folder")
+    output = OutputLOCAL(stage, "path", cache=False)
+
+    assert os.path.join("some_folder", "path") == str(output)
+
+
+def test_str_on_absolute_path(dvc_repo):
+    stage = Stage(dvc_repo)
+
+    path = os.path.abspath(os.path.join("path", "to", "file"))
+    output = OutputLOCAL(stage, path, cache=False)
+
+    assert path == str(output)
+
+
 class TestGetFilesNumber(TestDvc):
     def _get_output(self):
         stage = Stage(self.dvc)