diff --git a/tools/projmgr/include/ProjMgrWorker.h b/tools/projmgr/include/ProjMgrWorker.h
index 83f2f98d6..3b9ff9a57 100644
--- a/tools/projmgr/include/ProjMgrWorker.h
+++ b/tools/projmgr/include/ProjMgrWorker.h
@@ -1217,7 +1217,7 @@ class ProjMgrWorker {
   bool ProcessSequencesRelatives(ContextItem& context, bool rerun);
   bool ProcessSequencesRelatives(ContextItem& context, std::vector<std::string>& src, const std::string& ref = std::string(), std::string outDir = std::string(), bool withHeadingDot = false, bool solutionLevel = false);
   bool ProcessSequencesRelatives(ContextItem& context, BuildType& build, const std::string& ref = std::string());
-  bool ProcessSequenceRelative(ContextItem& context, std::string& item, const std::string& ref = std::string(), std::string outDir = std::string(), bool withHeadingDot = false, bool solutionLevel = false);
+  bool ProcessSequenceRelative(ContextItem& context, std::string& item, const std::string& ref = std::string(), bool genDep = true, std::string outDir = std::string(), bool withHeadingDot = false, bool solutionLevel = false);
   bool ProcessOutputFilenames(ContextItem& context);
   bool ProcessLinkerOptions(ContextItem& context);
   bool ProcessLinkerOptions(ContextItem& context, const LinkerItem& linker, const std::string& ref);
diff --git a/tools/projmgr/src/ProjMgrWorker.cpp b/tools/projmgr/src/ProjMgrWorker.cpp
index c6915784e..22e9868be 100644
--- a/tools/projmgr/src/ProjMgrWorker.cpp
+++ b/tools/projmgr/src/ProjMgrWorker.cpp
@@ -2637,7 +2637,7 @@ bool ProjMgrWorker::ProcessDebuggers(ContextItem& context) {
     context.debugger.protocol = m_activeTargetSet.debugger.protocol;
     if (!m_activeTargetSet.debugger.dbgconf.empty()) {
       context.debugger.dbgconf = m_activeTargetSet.debugger.dbgconf;
-      if (!ProcessSequenceRelative(context, context.debugger.dbgconf, context.csolution->directory)) {
+      if (!ProcessSequenceRelative(context, context.debugger.dbgconf, context.csolution->directory, false)) {
         return false;
       }
       if (RteFsUtils::IsRelative(context.debugger.dbgconf)) {
@@ -2647,7 +2647,7 @@ bool ProjMgrWorker::ProcessDebuggers(ContextItem& context) {
     context.debugger.startPname = m_activeTargetSet.debugger.startPname;
     for (auto telnet : m_activeTargetSet.debugger.telnet) {
       if (!telnet.file.empty()) {
-        if (!ProcessSequenceRelative(context, telnet.file, context.csolution->directory)) {
+        if (!ProcessSequenceRelative(context, telnet.file, context.csolution->directory, false)) {
           return false;
         }
       }
@@ -2670,7 +2670,8 @@ bool ProjMgrWorker::ProcessImages(ContextItem& context) {
   const vector<ImageItem>& images = m_activeTargetSet.images;
   for (auto item : images) {
     if (!item.image.empty()) {
-      if (!ProcessSequenceRelative(context, item.image, context.csolution->directory)) {
+      // process access sequences
+      if (!ProcessSequenceRelative(context, item.image, context.csolution->directory, false)) {
         return false;
       }
       if (RteFsUtils::IsRelative(item.image)) {
@@ -3549,7 +3550,8 @@ void ProjMgrWorker::ExpandPackDir(ContextItem& context, const string& pack, stri
   item = regex_replace(item, regEx, replacement);
 }
 
-bool ProjMgrWorker::ProcessSequenceRelative(ContextItem& context, string& item, const string& ref, string outDir, bool withHeadingDot, bool solutionLevel) {
+bool ProjMgrWorker::ProcessSequenceRelative(ContextItem& context, string& item, const string& ref,
+  bool genDep, string outDir, bool withHeadingDot, bool solutionLevel) {
   size_t offset = 0;
   bool pathReplace = false;
   outDir = outDir.empty() && item != context.directories.cprj ? context.directories.cprj : outDir;
@@ -3610,7 +3612,7 @@ bool ProjMgrWorker::ProcessSequenceRelative(ContextItem& context, string& item,
           // expand access sequence
           ExpandAccessSequence(context, refContext, sequenceName, outDir, item, withHeadingDot);
           // store dependency information
-          if (refContext.name != context.name) {
+          if (genDep && refContext.name != context.name) {
             CollectionUtils::PushBackUniquely(context.dependsOn, refContext.name);
           }
         } else {
@@ -4904,7 +4906,7 @@ std::string ProjMgrWorker::GetBoardInfoString(const std::string& vendor,
 
 bool ProjMgrWorker::ProcessSequencesRelatives(ContextItem& context, vector<string>& src, const string& ref, string outDir, bool withHeadingDot, bool solutionLevel) {
   for (auto& item : src) {
-    if (!ProcessSequenceRelative(context, item, ref, outDir, withHeadingDot, solutionLevel)) {
+    if (!ProcessSequenceRelative(context, item, ref, true, outDir, withHeadingDot, solutionLevel)) {
       return false;
     }
   }
diff --git a/tools/projmgr/test/data/TestTargetSet/cross-dependency.csolution.yml b/tools/projmgr/test/data/TestTargetSet/cross-dependency.csolution.yml
new file mode 100644
index 000000000..044b8661e
--- /dev/null
+++ b/tools/projmgr/test/data/TestTargetSet/cross-dependency.csolution.yml
@@ -0,0 +1,29 @@
+# yaml-language-server: $schema=https://raw.githubusercontent.com/Open-CMSIS-Pack/devtools/main/tools/projmgr/schemas/csolution.schema.json
+
+solution:
+
+  compiler: AC6
+
+  target-types:
+    - type: CM4
+      device: RteTest_ARMCM4_NOFP
+      target-set:
+        - set:
+          images:
+            - project-context: project
+            - project-context: project2
+            - image: $OutDir(project)$/project.bin
+            - image: $OutDir(project2)$/project2.bin
+          debugger:
+            name: J-Link
+            dbgconf: $ProjectDir(project)$/$Dname$.dbgconf
+            telnet:
+              - mode: file
+                file: $OutDir(project2)$/telnet.log
+
+  projects:
+    - project: project.cproject.yml
+    - project: project2.cproject.yml
+
+  packs:
+    - pack: ARM::RteTest_DFP
diff --git a/tools/projmgr/test/data/TestTargetSet/project2.cproject.yml b/tools/projmgr/test/data/TestTargetSet/project2.cproject.yml
new file mode 100644
index 000000000..42a444d17
--- /dev/null
+++ b/tools/projmgr/test/data/TestTargetSet/project2.cproject.yml
@@ -0,0 +1,7 @@
+# yaml-language-server: $schema=https://raw.githubusercontent.com/Open-CMSIS-Pack/devtools/main/tools/projmgr/schemas/cproject.schema.json
+
+project:
+
+  components:
+    - component: Startup
+    - component: CORE
diff --git a/tools/projmgr/test/src/ProjMgrUnitTests.cpp b/tools/projmgr/test/src/ProjMgrUnitTests.cpp
index 3a59ea316..87cb9b691 100644
--- a/tools/projmgr/test/src/ProjMgrUnitTests.cpp
+++ b/tools/projmgr/test/src/ProjMgrUnitTests.cpp
@@ -7324,3 +7324,23 @@ TEST_F(ProjMgrUnitTests, WestSupport) {
     testinput_folder + "/WestSupport/ref/core1.Debug+CM0.cbuild.yml");
 }
 
+TEST_F(ProjMgrUnitTests, TargetSetDependencies) {
+  char* argv[5];
+  const string& csolution = testinput_folder + "/TestTargetSet/cross-dependency.csolution.yml";
+  argv[1] = (char*)"convert";
+  argv[2] = (char*)csolution.c_str();
+  argv[3] = (char*)"--active";
+  argv[4] = (char*)"CM4";
+  EXPECT_EQ(0, RunProjMgr(5, argv, m_envp));
+  const YAML::Node& cbuildRun = YAML::LoadFile(testinput_folder + "/TestTargetSet/out/cross-dependency+CM4.cbuild-run.yml");
+  // check access sequences were correctly expanded: bin images, dbgconf and telnet file
+  EXPECT_EQ("project/CM4/project.bin", cbuildRun["cbuild-run"]["output"][2]["file"].as<string>());
+  EXPECT_EQ("project2/CM4/project2.bin", cbuildRun["cbuild-run"]["output"][3]["file"].as<string>());
+  EXPECT_EQ("../RteTest_ARMCM4_NOFP.dbgconf", cbuildRun["cbuild-run"]["debugger"]["dbgconf"].as<string>());
+  EXPECT_EQ("../../../../../project2/CM4/telnet.log", cbuildRun["cbuild-run"]["debugger"]["telnet"][0]["file"].as<string>());
+
+  // ensure dependencies are not set
+  const YAML::Node& cbuildIdx = YAML::LoadFile(testinput_folder + "/TestTargetSet/cross-dependency.cbuild-idx.yml");
+  EXPECT_FALSE(cbuildIdx["build-idx"]["cbuilds"][0]["depends-on"].IsDefined());
+  EXPECT_FALSE(cbuildIdx["build-idx"]["cbuilds"][1]["depends-on"].IsDefined());
+}