diff --git a/compiler/ballerina-lang/src/main/java/io/ballerina/projects/CompilerPluginManager.java b/compiler/ballerina-lang/src/main/java/io/ballerina/projects/CompilerPluginManager.java
index 7a946223b7e0..6f2ba751ac43 100644
--- a/compiler/ballerina-lang/src/main/java/io/ballerina/projects/CompilerPluginManager.java
+++ b/compiler/ballerina-lang/src/main/java/io/ballerina/projects/CompilerPluginManager.java
@@ -51,6 +51,12 @@ private CompilerPluginManager(PackageCompilation compilation,
     }
 
     static CompilerPluginManager from(PackageCompilation compilation) {
+        // Skip initialization if the compiler plugins are already initialized for the project
+        if (!compilation.packageContext().project().compilerPluginContexts().isEmpty()) {
+            List<CompilerPluginContextIml> compilerPluginContexts =
+                    compilation.packageContext().project().compilerPluginContexts();
+            return new CompilerPluginManager(compilation, compilerPluginContexts);
+        }
         // TODO We need to update the DependencyGraph API. Right now it is a mess
         PackageResolution packageResolution = compilation.getResolution();
         ResolvedPackageDependency rootPkgNode = new ResolvedPackageDependency(
@@ -191,10 +197,6 @@ private static List<Package> getDirectDependencies(ResolvedPackageDependency roo
 
     private static List<CompilerPluginContextIml> initializePlugins(List<CompilerPluginInfo> compilerPlugins,
                                                                     PackageCompilation compilation) {
-        // Skip initialization if the compiler plugins are already initialized for the project
-        if (!compilation.packageContext().project().compilerPluginContexts().isEmpty()) {
-            return compilation.packageContext().project().compilerPluginContexts();
-        }
         List<CompilerPluginContextIml> compilerPluginContexts = new ArrayList<>(compilerPlugins.size());
         for (CompilerPluginInfo compilerPluginInfo : compilerPlugins) {
             CompilerPluginCache pluginCache =
diff --git a/compiler/ballerina-lang/src/main/java/io/ballerina/projects/Package.java b/compiler/ballerina-lang/src/main/java/io/ballerina/projects/Package.java
index 00b7172dad4b..0d59cd0fb03c 100644
--- a/compiler/ballerina-lang/src/main/java/io/ballerina/projects/Package.java
+++ b/compiler/ballerina-lang/src/main/java/io/ballerina/projects/Package.java
@@ -635,6 +635,8 @@ private Package createNewPackage() {
             this.project.setCurrentPackage(new Package(newPackageContext, this.project));
             if (isOldDependencyGraphValid(oldPackage, this.project.currentPackage())) {
                 this.project.currentPackage().packageContext().getResolution(oldResolution);
+            } else {
+                this.project.compilerPluginContexts().clear();
             }
             CompilationOptions offlineCompOptions = CompilationOptions.builder().setOffline(true).build();
             offlineCompOptions = offlineCompOptions.acceptTheirs(project.currentPackage().compilationOptions());