diff --git a/cmd/dagger/cmd/init.go b/cmd/dagger/cmd/init.go
index ca6a4f84..f16975ba 100644
--- a/cmd/dagger/cmd/init.go
+++ b/cmd/dagger/cmd/init.go
@@ -36,12 +36,10 @@ var initCmd = &cobra.Command{
 			dir = cwd
 		}
 
-		ws, err := state.Init(ctx, dir)
+		_, err := state.Init(ctx, dir)
 		if err != nil {
 			lg.Fatal().Err(err).Msg("failed to initialize workspace")
 		}
-
-		lg.Info().Str("path", ws.DaggerDir()).Msg("initialized new empty workspace")
 	},
 }
 
diff --git a/cmd/dagger/cmd/new.go b/cmd/dagger/cmd/new.go
index 470de68c..70ece746 100644
--- a/cmd/dagger/cmd/new.go
+++ b/cmd/dagger/cmd/new.go
@@ -1,10 +1,6 @@
 package cmd
 
 import (
-	"fmt"
-	"path/filepath"
-	"strings"
-
 	"github.com/spf13/cobra"
 	"github.com/spf13/viper"
 	"go.dagger.io/dagger/cmd/dagger/cmd/common"
@@ -36,42 +32,16 @@ var newCmd = &cobra.Command{
 		}
 		name := args[0]
 
-		module := viper.GetString("module")
-		if module == "" {
-			lg.Fatal().Msg("missing --module")
-		}
-		p, err := filepath.Abs(module)
-		if err != nil {
-			lg.Fatal().Err(err).Str("path", module).Msg("unable to resolve path")
-		}
-
-		if !strings.HasPrefix(p, workspace.Path) {
-			lg.Fatal().Err(err).Str("path", module).Msg("module is outside the workspace")
-		}
-		p, err = filepath.Rel(workspace.Path, p)
-		if err != nil {
-			lg.Fatal().Err(err).Str("path", module).Msg("unable to resolve path")
-		}
-		if !strings.HasPrefix(p, ".") {
-			p = "./" + p
-		}
-		module = p
-
-		ws, err := workspace.Create(ctx, name, state.Plan{
-			Module:  module,
+		_, err := workspace.Create(ctx, name, state.Plan{
 			Package: viper.GetString("package"),
 		})
 		if err != nil {
 			lg.Fatal().Err(err).Msg("failed to create environment")
 		}
-
-		lg.Info().Str("name", name).Msg("created new empty environment")
-		lg.Info().Str("name", name).Msg(fmt.Sprintf("to add code to the plan, copy or create cue files under: %s", ws.Plan.Module))
 	},
 }
 
 func init() {
-	newCmd.Flags().StringP("module", "m", ".", "references the local path of the cue module to use as a plan, relative to the workspace root")
 	newCmd.Flags().StringP("package", "p", "", "references the name of the Cue package within the module to use as a plan. Default: defer to cue loader")
 	if err := viper.BindPFlags(newCmd.Flags()); err != nil {
 		panic(err)
diff --git a/environment/environment.go b/environment/environment.go
index 59dc671c..34ef1fc2 100644
--- a/environment/environment.go
+++ b/environment/environment.go
@@ -82,7 +82,7 @@ func (e *Environment) LoadPlan(ctx context.Context, s solver.Solver) error {
 	span, ctx := opentracing.StartSpanFromContext(ctx, "environment.LoadPlan")
 	defer span.Finish()
 
-	planSource, err := e.state.Plan.Source().Compile("", e.state)
+	planSource, err := e.state.Source().Compile("", e.state)
 	if err != nil {
 		return err
 	}
@@ -157,7 +157,7 @@ func (e *Environment) LocalDirs() map[string]string {
 	}
 
 	// 2. Scan the plan
-	plan, err := e.state.Plan.Source().Compile("", e.state)
+	plan, err := e.state.Source().Compile("", e.state)
 	if err != nil {
 		panic(err)
 	}
diff --git a/state/state.go b/state/state.go
index 67637322..b8c7a87a 100644
--- a/state/state.go
+++ b/state/state.go
@@ -9,7 +9,7 @@ type State struct {
 	Workspace string `yaml:"-"`
 
 	// Plan
-	Plan Plan `yaml:"plan"`
+	Plan Plan `yaml:"plan,omitempty"`
 
 	// Human-friendly environment name.
 	// A environment may have more than one name.
@@ -23,17 +23,21 @@ type State struct {
 	Computed string `yaml:"-"`
 }
 
+// Cue module containing the environment plan
+func (s *State) Source() Input {
+	w := s.Workspace
+	// FIXME: backward compatibility
+	if mod := s.Plan.Module; mod != "" {
+		w = mod
+	}
+	return DirInput(w, []string{}, []string{})
+}
+
 type Plan struct {
 	Module  string `yaml:"module,omitempty"`
 	Package string `yaml:"package,omitempty"`
 }
 
-// Cue module containing the environment plan
-// The input's top-level artifact is used as a module directory.
-func (p *Plan) Source() Input {
-	return DirInput(p.Module, []string{}, []string{})
-}
-
 func (s *State) SetInput(key string, value Input) error {
 	if s.Inputs == nil {
 		s.Inputs = make(map[string]Input)
diff --git a/state/workspace.go b/state/workspace.go
index d0c7befd..dc7c4993 100644
--- a/state/workspace.go
+++ b/state/workspace.go
@@ -8,6 +8,7 @@ import (
 	"os"
 	"path"
 	"path/filepath"
+	"strings"
 
 	"github.com/rs/zerolog/log"
 	"go.dagger.io/dagger/keychain"
@@ -161,18 +162,16 @@ func (w *Workspace) Get(ctx context.Context, name string) (*State, error) {
 		return nil, err
 	}
 	st.Path = envPath
-	// Backward compat: if no plan module has been provided,
-	// use `.dagger/env/<name>/plan`
+	// FIXME: Backward compat: Support for old-style `.dagger/env/<name>/plan`
 	if st.Plan.Module == "" {
 		planPath := path.Join(envPath, planDir)
-		if _, err := os.Stat(planPath); err != nil {
-			return nil, fmt.Errorf("missing plan information for %q", name)
+		if _, err := os.Stat(planPath); err == nil {
+			planRelPath, err := filepath.Rel(w.Path, planPath)
+			if err != nil {
+				return nil, err
+			}
+			st.Plan.Module = planRelPath
 		}
-		planRelPath, err := filepath.Rel(w.Path, planPath)
-		if err != nil {
-			return nil, err
-		}
-		st.Plan.Module = planRelPath
 	}
 	st.Workspace = w.Path
 
@@ -230,20 +229,22 @@ func (w *Workspace) Save(ctx context.Context, st *State) error {
 }
 
 func (w *Workspace) Create(ctx context.Context, name string, plan Plan) (*State, error) {
+	if _, err := w.Get(ctx, name); err == nil {
+		return nil, ErrExist
+	}
+
+	pkg, err := w.cleanPackageName(ctx, plan.Package)
+	if err != nil {
+		return nil, err
+	}
+
 	envPath, err := filepath.Abs(w.envPath(name))
 	if err != nil {
 		return nil, err
 	}
 
-	if _, err := os.Stat(plan.Module); err != nil {
-		return nil, err
-	}
-
 	// Environment directory
 	if err := os.MkdirAll(envPath, 0755); err != nil {
-		if errors.Is(err, os.ErrExist) {
-			return nil, ErrExist
-		}
 		return nil, err
 	}
 
@@ -252,8 +253,10 @@ func (w *Workspace) Create(ctx context.Context, name string, plan Plan) (*State,
 	st := &State{
 		Path:      envPath,
 		Workspace: w.Path,
-		Plan:      plan,
-		Name:      name,
+		Plan: Plan{
+			Package: pkg,
+		},
+		Name: name,
 	}
 
 	data, err := yaml.Marshal(st)
@@ -284,6 +287,51 @@ func (w *Workspace) Create(ctx context.Context, name string, plan Plan) (*State,
 	return st, nil
 }
 
-func (w *Workspace) DaggerDir() string {
-	return path.Join(w.Path, daggerDir)
+func (w *Workspace) cleanPackageName(ctx context.Context, pkg string) (string, error) {
+	lg := log.
+		Ctx(ctx).
+		With().
+		Str("package", pkg).
+		Logger()
+
+	if pkg == "" {
+		return pkg, nil
+	}
+
+	// If the package is not a path, then it must be a domain (e.g. foo.bar/mypackage)
+	if _, err := os.Stat(pkg); err != nil {
+		if !errors.Is(err, os.ErrNotExist) {
+			return "", err
+		}
+
+		// Make sure the domain is in the correct form
+		if !strings.Contains(pkg, ".") || !strings.Contains(pkg, "/") {
+			return "", fmt.Errorf("invalid package %q", pkg)
+		}
+
+		return pkg, nil
+	}
+
+	p, err := filepath.Abs(pkg)
+	if err != nil {
+		lg.Error().Err(err).Msg("unable to resolve path")
+		return "", err
+	}
+
+	if !strings.HasPrefix(p, w.Path) {
+		lg.Fatal().Err(err).Msg("package is outside the workspace")
+		return "", err
+	}
+
+	p, err = filepath.Rel(w.Path, p)
+	if err != nil {
+		lg.Fatal().Err(err).Msg("unable to resolve path")
+		return "", err
+	}
+
+	if !strings.HasPrefix(p, ".") {
+		p = "./" + p
+	}
+
+	return p, nil
 }
diff --git a/tests/cli.bats b/tests/cli.bats
index b2db1e56..b696c8ac 100644
--- a/tests/cli.bats
+++ b/tests/cli.bats
@@ -27,7 +27,7 @@ setup() {
     assert_success
     refute_output
 
-    run "$DAGGER" new "test" --module "$DAGGER_WORKSPACE"
+    run "$DAGGER" new "test"
     assert_success
 
     run "$DAGGER" list
@@ -42,10 +42,10 @@ setup() {
 @test "dagger new: modules" {
     "$DAGGER" init
 
-    ln -s "$TESTDIR"/cli/input/simple "$DAGGER_WORKSPACE"/plan
+    cp -a "$TESTDIR"/cli/input/simple/* "$DAGGER_WORKSPACE"
 
-    "$DAGGER" new "a" --module "$DAGGER_WORKSPACE"/plan
-    "$DAGGER" new "b" --module "$DAGGER_WORKSPACE"/plan
+    "$DAGGER" new "a"
+    "$DAGGER" new "b"
 
     "$DAGGER" input -e "a" text "input" "a"
     "$DAGGER" input -e "b" text "input" "b"
@@ -60,6 +60,9 @@ setup() {
     run "$DAGGER" query -l error -e "b" input -f text
     assert_success
     assert_output "b"
+
+    # run ls -la "$DAGGER_WORKSPACE"
+    # assert_failure
 }
 
 # create different environments from the same module,
@@ -67,10 +70,10 @@ setup() {
 @test "dagger new: packages" {
     "$DAGGER" init
 
-    ln -s "$TESTDIR"/cli/packages "$DAGGER_WORKSPACE"/plan
+    cp -a "$TESTDIR"/cli/packages/* "$DAGGER_WORKSPACE"
 
-    "$DAGGER" new "a" --module "$DAGGER_WORKSPACE"/plan --package alpha.dagger.io/test/a
-    "$DAGGER" new "b" --module "$DAGGER_WORKSPACE"/plan --package alpha.dagger.io/test/b
+    "$DAGGER" new "a" --package alpha.dagger.io/test/a
+    "$DAGGER" new "b" --package alpha.dagger.io/test/b
 
     "$DAGGER" up -e "a"
     "$DAGGER" up -e "b"
diff --git a/tests/helpers.bash b/tests/helpers.bash
index e4f231c9..9bbd96e0 100644
--- a/tests/helpers.bash
+++ b/tests/helpers.bash
@@ -20,11 +20,10 @@ common_setup() {
 dagger_new_with_plan() {
     local name="$1"
     local sourcePlan="$2"
-    local targetPlan="$DAGGER_WORKSPACE"/"$name"
 
-    ln -s "$sourcePlan" "$targetPlan"
-    "$DAGGER" new "$name" --module "$targetPlan"
+    cp -a "$sourcePlan"/* "$DAGGER_WORKSPACE"
 
+    "$DAGGER" new "$name"
 }
 
 # dagger helper to execute the right binary