diff --git a/src/cmd/build.rs b/src/cmd/build.rs
index 25bfc0256ff307652f47ba40f3b9e54ed0354838..cabdb1bd6467899cc8a4aa37adbb3624ca50516a 100644
--- a/src/cmd/build.rs
+++ b/src/cmd/build.rs
@@ -308,7 +308,10 @@ fn optimize_wasm(
     optimization_passes: OptimizationPasses,
 ) -> Result<OptimizationResult> {
     let mut dest_optimized = crate_metadata.dest_wasm.clone();
-    dest_optimized.set_file_name(format!("{}-opt.wasm", crate_metadata.package_name));
+    dest_optimized.set_file_name(format!(
+        "{}-opt.wasm",
+        crate_metadata.contract_artifact_name
+    ));
     let _ = do_optimization(
         crate_metadata.dest_wasm.as_os_str(),
         &dest_optimized.as_os_str(),
@@ -606,6 +609,7 @@ mod tests_ci_only {
     #[cfg(unix)]
     use std::os::unix::fs::PermissionsExt;
     use std::{
+        ffi::OsStr,
         io::Write,
         path::{Path, PathBuf},
     };
@@ -902,4 +906,42 @@ mod tests_ci_only {
             Ok(())
         })
     }
+
+    #[test]
+    fn contract_lib_name_different_from_package_name_must_build() {
+        with_new_contract_project(|manifest_path| {
+            // given
+            let mut manifest =
+                Manifest::new(manifest_path.clone()).expect("manifest creation failed");
+            let _ = manifest
+                .set_lib_name("some_lib_name")
+                .expect("setting lib name failed");
+            let _ = manifest
+                .set_package_name("some_package_name")
+                .expect("setting pacakge name failed");
+            manifest
+                .write(&manifest_path)
+                .expect("writing manifest failed");
+
+            // when
+            let cmd = BuildCommand {
+                manifest_path: Some(manifest_path.into()),
+                build_artifact: BuildArtifacts::All,
+                verbosity: VerbosityFlags::default(),
+                unstable_options: UnstableOptions::default(),
+                optimization_passes: None,
+            };
+            let res = cmd.exec().expect("build failed");
+
+            // then
+            assert_eq!(
+                res.dest_wasm
+                    .expect("`dest_wasm` does not exist")
+                    .file_name(),
+                Some(OsStr::new("some_lib_name.wasm"))
+            );
+
+            Ok(())
+        })
+    }
 }
diff --git a/src/cmd/metadata.rs b/src/cmd/metadata.rs
index 94cb4d104dcd70841267ff6391a0a055b65e2417..4fca166d2ea827bc0f511f4618b434ed1b374e71 100644
--- a/src/cmd/metadata.rs
+++ b/src/cmd/metadata.rs
@@ -67,7 +67,7 @@ pub(crate) fn execute(
     let target_directory = crate_metadata.target_directory.clone();
     let out_path_metadata = target_directory.join(METADATA_FILE);
 
-    let fname_bundle = format!("{}.contract", crate_metadata.package_name);
+    let fname_bundle = format!("{}.contract", crate_metadata.contract_artifact_name);
     let out_path_bundle = target_directory.join(fname_bundle);
 
     // build the extended contract project metadata
@@ -401,7 +401,10 @@ mod tests {
             assert_eq!(expected_wasm, wasm.as_str().unwrap());
             assert_eq!(expected_language, language.as_str().unwrap());
             assert_eq!(expected_compiler, compiler.as_str().unwrap());
-            assert_eq!(crate_metadata.package_name, name.as_str().unwrap());
+            assert_eq!(
+                crate_metadata.contract_artifact_name,
+                name.as_str().unwrap()
+            );
             assert_eq!(
                 crate_metadata.root_package.version.to_string(),
                 version.as_str().unwrap()
diff --git a/src/crate_metadata.rs b/src/crate_metadata.rs
index 26bf7f5f0695bfe1504fbd94b4f46c573c3deaee..9b47b7d190f1e4e2461b757c7fe4c03ea5d053ab 100644
--- a/src/crate_metadata.rs
+++ b/src/crate_metadata.rs
@@ -28,7 +28,7 @@ use url::Url;
 pub struct CrateMetadata {
     pub manifest_path: ManifestPath,
     pub cargo_meta: cargo_metadata::Metadata,
-    pub package_name: String,
+    pub contract_artifact_name: String,
     pub root_package: Package,
     pub original_wasm: PathBuf,
     pub dest_wasm: PathBuf,
@@ -45,25 +45,34 @@ impl CrateMetadata {
         let (metadata, root_package) = get_cargo_metadata(manifest_path)?;
         let mut target_directory = metadata.target_directory.as_path().join("ink");
 
-        // Normalize the package name.
+        // Normalize the package and lib name.
         let package_name = root_package.name.replace("-", "_");
+        let lib_name = &root_package
+            .targets
+            .iter()
+            .find(|target| target.kind.iter().any(|t| t == "cdylib"))
+            .expect("lib name not found")
+            .name
+            .replace("-", "_");
 
         let absolute_manifest_path = manifest_path.absolute_directory()?;
         let absolute_workspace_root = metadata.workspace_root.canonicalize()?;
         if absolute_manifest_path != absolute_workspace_root {
-            target_directory = target_directory.join(package_name.clone());
+            // If the contract is a package in a workspace, we use the package name
+            // as the name of the sub-folder where we put the `.contract` bundle.
+            target_directory = target_directory.join(package_name);
         }
 
-        // {target_dir}/wasm32-unknown-unknown/release/{package_name}.wasm
+        // {target_dir}/wasm32-unknown-unknown/release/{lib_name}.wasm
         let mut original_wasm = target_directory.clone();
         original_wasm.push("wasm32-unknown-unknown");
         original_wasm.push("release");
-        original_wasm.push(package_name.clone());
+        original_wasm.push(lib_name.clone());
         original_wasm.set_extension("wasm");
 
-        // {target_dir}/{package_name}.wasm
+        // {target_dir}/{lib_name}.wasm
         let mut dest_wasm = target_directory.clone();
-        dest_wasm.push(package_name.clone());
+        dest_wasm.push(lib_name.clone());
         dest_wasm.set_extension("wasm");
 
         let ink_version = metadata
@@ -91,7 +100,7 @@ impl CrateMetadata {
             manifest_path: manifest_path.clone(),
             cargo_meta: metadata,
             root_package,
-            package_name,
+            contract_artifact_name: lib_name.to_string(),
             original_wasm: original_wasm.into(),
             dest_wasm: dest_wasm.into(),
             ink_version,
diff --git a/src/workspace/manifest.rs b/src/workspace/manifest.rs
index fc2a52ed25a1e947dab0d68b451a46dae016c340..7db38880436f6c58b0f0221b7fdc7f82fc6843ad 100644
--- a/src/workspace/manifest.rs
+++ b/src/workspace/manifest.rs
@@ -224,6 +224,32 @@ impl Manifest {
             .insert("version".into(), value::Value::String(version.into())))
     }
 
+    /// Set the `lib` name to `name`.
+    #[cfg(feature = "test-ci-only")]
+    #[cfg(test)]
+    pub fn set_lib_name(&mut self, name: &str) -> Result<Option<toml::Value>> {
+        Ok(self
+            .toml
+            .get_mut("lib")
+            .ok_or_else(|| anyhow::anyhow!("[lib] section not found"))?
+            .as_table_mut()
+            .ok_or_else(|| anyhow::anyhow!("[lib] should be a table"))?
+            .insert("name".into(), value::Value::String(name.into())))
+    }
+
+    /// Set the `package` name to `name`.
+    #[cfg(feature = "test-ci-only")]
+    #[cfg(test)]
+    pub fn set_package_name(&mut self, name: &str) -> Result<Option<toml::Value>> {
+        Ok(self
+            .toml
+            .get_mut("package")
+            .ok_or_else(|| anyhow::anyhow!("[package] section not found"))?
+            .as_table_mut()
+            .ok_or_else(|| anyhow::anyhow!("[package] should be a table"))?
+            .insert("name".into(), value::Value::String(name.into())))
+    }
+
     /// Set `[profile.release]` lto flag
     pub fn with_profile_release_lto(&mut self, enabled: bool) -> Result<&mut Self> {
         let lto = self