diff --git a/packages/angular_devkit/build_angular/test/browser/web-worker_spec_large.ts b/packages/angular_devkit/build_angular/test/browser/web-worker_spec_large.ts
index a7373d110fd0..711a9267e118 100644
--- a/packages/angular_devkit/build_angular/test/browser/web-worker_spec_large.ts
+++ b/packages/angular_devkit/build_angular/test/browser/web-worker_spec_large.ts
@@ -26,6 +26,8 @@ describe('Browser Builder Web Worker support', () => {
   const workerFiles: { [k: string]: string } = {
     'src/app/dep.ts': `export const foo = 'bar';`,
     'src/app/app.worker.ts': `
+      /// <reference lib="webworker" />
+
       import { foo } from './dep';
       console.log('hello from worker');
       addEventListener('message', ({ data }) => {
diff --git a/packages/schematics/angular/web-worker/files/project-tsconfig/tsconfig.json.template b/packages/schematics/angular/web-worker/files/project-tsconfig/tsconfig.json.template
deleted file mode 100644
index b170f6d1d0e5..000000000000
--- a/packages/schematics/angular/web-worker/files/project-tsconfig/tsconfig.json.template
+++ /dev/null
@@ -1,10 +0,0 @@
-{
-  "extends": "<%= relativePathToWorkspaceRoot %>/tsconfig.json",
-  "compilerOptions": {
-    "lib": [
-      "es2018",
-      "dom",
-      "webworker"
-    ],
-  }
-}
diff --git a/packages/schematics/angular/web-worker/files/worker-tsconfig/tsconfig.worker.json.template b/packages/schematics/angular/web-worker/files/worker-tsconfig/tsconfig.worker.json.template
index 33b92e255762..166d26bac399 100644
--- a/packages/schematics/angular/web-worker/files/worker-tsconfig/tsconfig.worker.json.template
+++ b/packages/schematics/angular/web-worker/files/worker-tsconfig/tsconfig.worker.json.template
@@ -1,5 +1,5 @@
 {
-  "extends": "./tsconfig.json",
+  "extends": "<%= relativePathToWorkspaceRoot %>/tsconfig.json",
   "compilerOptions": {
     "outDir": "<%= relativePathToWorkspaceRoot %>/out-tsc/worker",
     "lib": [
@@ -9,6 +9,6 @@
     "types": []
   },
   "include": [
-    "**/*.worker.ts"
+    "src/**/*.worker.ts"
   ]
 }
diff --git a/packages/schematics/angular/web-worker/files/worker/__name@dasherize__.worker.ts.template b/packages/schematics/angular/web-worker/files/worker/__name@dasherize__.worker.ts.template
index 27020fe12b04..b7049b0b80c6 100644
--- a/packages/schematics/angular/web-worker/files/worker/__name@dasherize__.worker.ts.template
+++ b/packages/schematics/angular/web-worker/files/worker/__name@dasherize__.worker.ts.template
@@ -1,3 +1,5 @@
+/// <reference lib="webworker" />
+
 addEventListener('message', ({ data }) => {
   const response = `worker response to ${data}`;
   postMessage(response);
diff --git a/packages/schematics/angular/web-worker/index.ts b/packages/schematics/angular/web-worker/index.ts
index 25912657a876..92e6df7ff45c 100644
--- a/packages/schematics/angular/web-worker/index.ts
+++ b/packages/schematics/angular/web-worker/index.ts
@@ -5,7 +5,7 @@
  * 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 { JsonParseMode, parseJsonAst, strings, tags } from '@angular-devkit/core';
+import { JsonParseMode, join, normalize, parseJsonAst, strings, tags } from '@angular-devkit/core';
 import {
   Rule, SchematicContext, SchematicsException, Tree,
   apply, applyTemplates, chain, mergeWith, move, noop, url,
@@ -21,54 +21,16 @@ function addConfig(options: WebWorkerOptions, root: string, tsConfigPath: string
   return (host: Tree, context: SchematicContext) => {
     context.logger.debug('updating project configuration.');
 
-    const tsConfigRules = [];
-
-    // Add tsconfig.worker.json.
-    const relativePathToWorkspaceRoot = root.split('/').map(x => '..').join('/');
-    tsConfigRules.push(mergeWith(apply(url('./files/worker-tsconfig'), [
-      applyTemplates({ ...options, relativePathToWorkspaceRoot }),
-      move(root),
-    ])));
-
-    // Add project tsconfig.json.
-    // The project level tsconfig.json with webworker lib is for editor support since
-    // the dom and webworker libs are mutually exclusive.
-    // Note: this schematic does not change other tsconfigs to use the project-level tsconfig.
-    const projectTsConfigPath = `${root}/tsconfig.json`;
-    if (host.exists(projectTsConfigPath)) {
-      // If the file already exists, alter it.
-      const buffer = host.read(projectTsConfigPath);
-      if (buffer) {
-        const tsCfgAst = parseJsonAst(buffer.toString(), JsonParseMode.Loose);
-        if (tsCfgAst.kind != 'object') {
-          throw new SchematicsException('Invalid tsconfig. Was expecting an object');
-        }
-        const optsAstNode = findPropertyInAstObject(tsCfgAst, 'compilerOptions');
-        if (optsAstNode && optsAstNode.kind != 'object') {
-          throw new SchematicsException(
-            'Invalid tsconfig "compilerOptions" property; Was expecting an object.');
-        }
-        const libAstNode = findPropertyInAstObject(tsCfgAst, 'lib');
-        if (libAstNode && libAstNode.kind != 'array') {
-          throw new SchematicsException('Invalid tsconfig "lib" property; expected an array.');
-        }
-        const newLibProp = 'webworker';
-        if (libAstNode && !libAstNode.value.includes(newLibProp)) {
-          const recorder = host.beginUpdate(projectTsConfigPath);
-          appendValueInAstArray(recorder, libAstNode, newLibProp);
-          host.commitUpdate(recorder);
-        }
-      }
-    } else {
-      // Otherwise create it.
-      tsConfigRules.push(mergeWith(apply(url('./files/project-tsconfig'), [
-        applyTemplates({ ...options, relativePathToWorkspaceRoot }),
-        move(root),
-      ])));
-    }
+    // todo: replace with the new helper method in a seperate PR
+    // https://github.com/angular/angular-cli/pull/14207
+    const rootNormalized = root.endsWith('/') ? root.slice(0, -1) : root;
+    const relativePathToWorkspaceRoot =
+      rootNormalized
+        ? rootNormalized.split('/').map(x => '..').join('/')
+        : '.';
 
     // Add worker glob exclusion to tsconfig.app.json.
-    const workerGlob = '**/*.worker.ts';
+    const workerGlob = 'src/**/*.worker.ts';
     const buffer = host.read(tsConfigPath);
     if (buffer) {
       const tsCfgAst = parseJsonAst(buffer.toString(), JsonParseMode.Loose);
@@ -80,17 +42,19 @@ function addConfig(options: WebWorkerOptions, root: string, tsConfigPath: string
         throw new SchematicsException('Invalid tsconfig "exclude" property; expected an array.');
       }
 
-      if (filesAstNode && filesAstNode.value.indexOf(workerGlob) == -1) {
+      if (filesAstNode && !filesAstNode.value.includes(workerGlob)) {
         const recorder = host.beginUpdate(tsConfigPath);
         appendValueInAstArray(recorder, filesAstNode, workerGlob);
         host.commitUpdate(recorder);
       }
     }
 
-    return chain([
-      // Add tsconfigs.
-      ...tsConfigRules,
-    ]);
+    return mergeWith(
+      apply(url('./files/worker-tsconfig'), [
+        applyTemplates({ ...options, relativePathToWorkspaceRoot }),
+        move(root),
+      ]),
+    );
   };
 }
 
@@ -145,7 +109,7 @@ export default function (options: WebWorkerOptions): Rule {
       throw new SchematicsException('Option "project" is required.');
     }
     if (!options.target) {
-      throw new SchematicsException('Option (target) is required.');
+      throw new SchematicsException('Option "target" is required.');
     }
 
     const project = workspace.projects.get(options.project);
@@ -169,11 +133,11 @@ export default function (options: WebWorkerOptions): Rule {
     const parsedPath = parseName(options.path, options.name);
     options.name = parsedPath.name;
     options.path = parsedPath.path;
-    const root = project.root || project.sourceRoot || '';
+    const root = project.root || '';
 
     const needWebWorkerConfig = !projectTargetOptions.webWorkerTsConfig;
     if (needWebWorkerConfig) {
-      const workerConfigPath = `${root.endsWith('/') ? root : root + '/'}tsconfig.worker.json`;
+      const workerConfigPath = join(normalize(root), 'tsconfig.worker.json');
       projectTargetOptions.webWorkerTsConfig = workerConfigPath;
 
       // add worker tsconfig to lint architect target
diff --git a/packages/schematics/angular/web-worker/index_spec.ts b/packages/schematics/angular/web-worker/index_spec.ts
index 25ef32d9a9b5..bc68cba035d5 100644
--- a/packages/schematics/angular/web-worker/index_spec.ts
+++ b/packages/schematics/angular/web-worker/index_spec.ts
@@ -20,7 +20,6 @@ describe('Service Worker Schematic', () => {
     project: 'bar',
     target: 'build',
     name: 'app',
-    // path: 'src/app',
     snippet: true,
   };
 
@@ -54,18 +53,14 @@ describe('Service Worker Schematic', () => {
     expect(tree.exists(path)).toEqual(true);
   });
 
-  it('should put a new tsconfig.json file in the project root', async () => {
-    const tree = await schematicRunner.runSchematicAsync('web-worker', defaultOptions, appTree)
-      .toPromise();
-    const path = '/projects/bar/tsconfig.json';
-    expect(tree.exists(path)).toEqual(true);
-  });
-
   it('should put the tsconfig.worker.json file in the project root', async () => {
     const tree = await schematicRunner.runSchematicAsync('web-worker', defaultOptions, appTree)
       .toPromise();
     const path = '/projects/bar/tsconfig.worker.json';
     expect(tree.exists(path)).toEqual(true);
+
+    const { compilerOptions } = JSON.parse(tree.readContent(path));
+    expect(compilerOptions.outDir).toBe('../../out-tsc/worker');
   });
 
   it('should add the webWorkerTsConfig option to workspace', async () => {
@@ -80,7 +75,7 @@ describe('Service Worker Schematic', () => {
     const tree = await schematicRunner.runSchematicAsync('web-worker', defaultOptions, appTree)
       .toPromise();
     const { exclude } = JSON.parse(tree.readContent('/projects/bar/tsconfig.app.json'));
-    expect(exclude).toContain('**/*.worker.ts');
+    expect(exclude).toContain('src/**/*.worker.ts');
   });
 
   it('should add snippet to sibling file', async () => {
@@ -103,4 +98,20 @@ describe('Service Worker Schematic', () => {
       'projects/bar/tsconfig.worker.json',
     ]);
   });
+
+  it(`should add 'tsconfig.worker.json' outside of 'src' directory in root app`, async () => {
+    const rootAppOptions = { ...appOptions, projectRoot: '', name: 'foo' };
+    const workerOptions = { ...defaultOptions, project: 'foo' };
+
+    appTree = await schematicRunner.runSchematicAsync('application', rootAppOptions, appTree)
+      .toPromise();
+    const tree = await schematicRunner.runSchematicAsync('web-worker', workerOptions, appTree)
+      .toPromise();
+
+    const path = '/tsconfig.worker.json';
+    expect(tree.exists(path)).toEqual(true);
+
+    const { compilerOptions } = JSON.parse(tree.readContent(path));
+    expect(compilerOptions.outDir).toBe('./out-tsc/worker');
+  });
 });
diff --git a/tests/legacy-cli/e2e/tests/build/worker.ts b/tests/legacy-cli/e2e/tests/build/worker.ts
index 7c9398687af6..759bb57e36c8 100644
--- a/tests/legacy-cli/e2e/tests/build/worker.ts
+++ b/tests/legacy-cli/e2e/tests/build/worker.ts
@@ -14,8 +14,8 @@ export default async function () {
 
   const workerPath = join('src', 'app', 'app.worker.ts');
   const snippetPath = join('src', 'app', 'app.component.ts');
-  const projectTsConfig = join('src', 'tsconfig.json');
-  const workerTsConfig = join('src', 'tsconfig.worker.json');
+  const projectTsConfig = 'tsconfig.json';
+  const workerTsConfig = 'tsconfig.worker.json';
 
   await ng('generate', 'web-worker', 'app');
   await expectFileToExist(workerPath);