diff -Naur terraform.old/internal/command/init_run.go terraform.new/internal/command/init_run.go
--- terraform.old/internal/command/init_run.go
+++ terraform.new/internal/command/init_run.go
@@ -6,6 +6,7 @@
 import (
 	"errors"
 	"fmt"
+	"os"
 	"strings"
 
 	"github.com/hashicorp/hcl/v2"
@@ -76,6 +77,11 @@
 	if c.forceInitCopy {
 		c.migrateState = true
 	}
 
+	val, ok := os.LookupEnv("NIX_TERRAFORM_PLUGIN_DIR")
+	if ok {
+		initArgs.PluginPath = append(initArgs.PluginPath, val)
+	}
+
 	if len(initArgs.PluginPath) > 0 {
 		c.pluginPath = initArgs.PluginPath
 	}