diff --git a/.gitignore b/.gitignore
index a9213ae9c7f..0afbc7c0e1c 100644
--- a/.gitignore
+++ b/.gitignore
@@ -2,6 +2,7 @@
 .cabal-sandbox/
 cabal.sandbox.config
 cabal.project.local
+cabal.config.local
 .ghc.environment.*
 cabal-dev/
 .hpc/
diff --git a/Cabal/doc/nix-local-build.rst b/Cabal/doc/nix-local-build.rst
index 4488118e268..57eca67ac06 100644
--- a/Cabal/doc/nix-local-build.rst
+++ b/Cabal/doc/nix-local-build.rst
@@ -481,11 +481,17 @@ following sources (later entries override earlier ones):
 
 1. ``~/.cabal/config`` (the user-wide global configuration)
 
-2. ``cabal.project`` (the project configuratoin)
+2. ``cabal.config.local`` (the project-wide global configuration)
 
-3. ``cabal.project.freeze`` (the output of ``cabal new-freeze``)
+3. ``cabal.project`` (the project configuration)
 
-4. ``cabal.project.local`` (the output of ``cabal new-configure``)
+4. ``cabal.project.freeze`` (the output of ``cabal new-freeze``)
+
+5. ``cabal.project.local`` (the output of ``cabal new-configure``)
+
+The project configuration files ``cabal.project`` and ``cabal.project.local``
+specify options for project packages only, while the global configuration files
+``~/.cabal/config`` and ``cabal.config.local`` affect *all* packages.
 
 
 Specifying the local packages
diff --git a/cabal-install/Distribution/Client/CmdInstall.hs b/cabal-install/Distribution/Client/CmdInstall.hs
index 197124b4422..36ed427ecab 100644
--- a/cabal-install/Distribution/Client/CmdInstall.hs
+++ b/cabal-install/Distribution/Client/CmdInstall.hs
@@ -242,7 +242,7 @@ establishDummyProjectBaseContext verbosity cliConfig tmpDir localPackages = do
     createDirectoryIfMissingVerbose verbosity True $ distProjectCacheDirectory distDirLayout
 
     globalConfig <- runRebuild ""
-                  $ readGlobalConfig verbosity
+                  $ readGlobalConfig verbosity distDirLayout
                   $ projectConfigConfigFile
                   $ projectConfigShared cliConfig
     let projectConfig = globalConfig <> cliConfig
diff --git a/cabal-install/Distribution/Client/ProjectConfig.hs b/cabal-install/Distribution/Client/ProjectConfig.hs
index ca67237157f..8598515b335 100644
--- a/cabal-install/Distribution/Client/ProjectConfig.hs
+++ b/cabal-install/Distribution/Client/ProjectConfig.hs
@@ -66,7 +66,7 @@ import Distribution.Client.GlobalFlags
 import Distribution.Client.BuildReports.Types
          ( ReportLevel(..) )
 import Distribution.Client.Config
-         ( loadConfig, getConfigFilePath )
+         ( getConfigFilePath, loadConfig, loadExactConfig )
 
 import Distribution.Solver.Types.SourcePackage
 import Distribution.Solver.Types.Settings
@@ -413,7 +413,7 @@ renderBadProjectRoot (BadProjectRootExplicitFile projectFile) =
 --
 readProjectConfig :: Verbosity -> Flag FilePath -> DistDirLayout -> Rebuild ProjectConfig
 readProjectConfig verbosity configFileFlag distDirLayout = do
-    global <- readGlobalConfig             verbosity configFileFlag
+    global <- readGlobalConfig             verbosity distDirLayout configFileFlag
     local  <- readProjectLocalConfig       verbosity distDirLayout
     freeze <- readProjectLocalFreezeConfig verbosity distDirLayout
     extra  <- readProjectLocalExtraConfig  verbosity distDirLayout
@@ -542,13 +542,25 @@ writeProjectConfigFile file =
     writeFile file . showProjectConfig
 
 
--- | Read the user's @~/.cabal/config@ file.
---
-readGlobalConfig :: Verbosity -> Flag FilePath -> Rebuild ProjectConfig
-readGlobalConfig verbosity configFileFlag = do
-    config     <- liftIO (loadConfig verbosity configFileFlag)
-    configFile <- liftIO (getConfigFilePath configFileFlag)
-    monitorFiles [monitorFileHashed configFile]
+-- | Read the user's @~/.cabal/config@ file and any @cabal.config.local@ file in the
+-- project root directory.
+--
+readGlobalConfig
+    :: Verbosity
+    -> DistDirLayout
+    -> Flag FilePath
+    -> Rebuild ProjectConfig
+readGlobalConfig verbosity layout configFileFlag = do
+    userConfig     <- liftIO (loadConfig verbosity configFileFlag)
+    userConfigFile <- liftIO (getConfigFilePath configFileFlag)
+    let localConfigFile = distProjectRootDirectory layout </> "cabal.config.local"
+    localConfig    <- liftIO (loadExactConfig verbosity localConfigFile)
+    monitorFiles
+      [
+        monitorFileHashed userConfigFile,
+        monitorFileHashed localConfigFile
+      ]
+    let config = userConfig <> fromMaybe mempty localConfig
     return (convertLegacyGlobalConfig config)
 
 reportParseResult :: Verbosity -> String -> FilePath -> ParseResult a -> IO a
diff --git a/cabal-install/changelog b/cabal-install/changelog
index 274d0491df8..f512b13f975 100644
--- a/cabal-install/changelog
+++ b/cabal-install/changelog
@@ -35,6 +35,8 @@
 	stay within the load command size limits of macOSs mach-o linker.
 	* Use [lfxtb] letters to differentiate component kind instead of
 	opaque "c" in dist-dir layout.
+	* New config file 'cabal.config.local' to specify project-wide
+	global options for project commands.
 
 2.0.0.1 Mikhail Glushenkov <mikhail.glushenkov@gmail.com> October 2017
 	* Support for GHC's numeric -g debug levels (#4673).