diff -Naur terraform.old/internal/command/init.go terraform.new/internal/command/init.go
--- terraform.old/internal/command/init.go
+++ terraform.new/internal/command/init.go
@@ -7,6 +7,7 @@
 	"context"
 	"errors"
 	"fmt"
+	"os"
 	"log"
 	"reflect"
 	"sort"
@@ -79,6 +80,11 @@
 		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
 	}