diff --git a/path.c b/path.c
index cd8e2d6e686e41f0a53479bf34d810a1a338650e..35d498e9bc33e1827178970c5136de3edc7e226a 100644
--- a/path.c
+++ b/path.c
@@ -103,7 +103,8 @@ static void update_common_dir(struct strbuf *buf, int git_dir_len)
 	char *base = buf->buf + git_dir_len;
 	const char **p;
 
-	if (is_dir_file(base, "logs", "HEAD"))
+	if (is_dir_file(base, "logs", "HEAD") ||
+	    is_dir_file(base, "info", "sparse-checkout"))
 		return;	/* keep this in $GIT_DIR */
 	for (p = common_list; *p; p++) {
 		const char *path = *p;
diff --git a/t/t0060-path-utils.sh b/t/t0060-path-utils.sh
index f5d6f80d66dd440335507348448eb2f235d67e44..93605f42f27cef9ef3ffe381c84aea9f6f4be426 100755
--- a/t/t0060-path-utils.sh
+++ b/t/t0060-path-utils.sh
@@ -270,6 +270,7 @@ test_git_path GIT_COMMON_DIR=bar objects                  bar/objects
 test_git_path GIT_COMMON_DIR=bar objects/bar              bar/objects/bar
 test_git_path GIT_COMMON_DIR=bar info/exclude             bar/info/exclude
 test_git_path GIT_COMMON_DIR=bar info/grafts              bar/info/grafts
+test_git_path GIT_COMMON_DIR=bar info/sparse-checkout     .git/info/sparse-checkout
 test_git_path GIT_COMMON_DIR=bar remotes/bar              bar/remotes/bar
 test_git_path GIT_COMMON_DIR=bar branches/bar             bar/branches/bar
 test_git_path GIT_COMMON_DIR=bar logs/refs/heads/master   bar/logs/refs/heads/master