diff --git a/bin/idea.sh b/bin/idea.sh
index 03b9eee13da..398d2aa2343 100644
--- a/bin/idea.sh
+++ b/bin/idea.sh
@@ -49,7 +49,7 @@ do
       ;;
 
     -o | --output )
-      IDEA_OUTPUT=$2
+      IDEA_OUTPUT=$2/.idea
       shift
       ;;
 
@@ -64,28 +64,25 @@ do
   shift
 done
 
-mkdir $IDEA_OUTPUT || exit 1
+mkdir -p $IDEA_OUTPUT || exit 1
 cd $IDEA_OUTPUT; IDEA_OUTPUT=`pwd`
 
+if [ "x$TOPLEVEL_DIR" = "x" ] ; then
+    cd $SCRIPT_DIR/..
+    TOPLEVEL_DIR=`pwd`
+    cd $IDEA_OUTPUT
+fi
+
 MAKE_DIR="$SCRIPT_DIR/../make"
 IDEA_MAKE="$MAKE_DIR/idea"
 IDEA_TEMPLATE="$IDEA_MAKE/template"
 
 cp -r "$IDEA_TEMPLATE"/* "$IDEA_OUTPUT"
 
-#init template variables
-for file in `ls -p $IDEA_TEMPLATE | grep -v /`; do
-	VAR_SUFFIX=`echo $file | cut -d'.' -f1 | tr [:lower:] [:upper:]`
-    eval "$VAR_SUFFIX"_TEMPLATE="$IDEA_TEMPLATE"/$file
-	eval IDEA_"$VAR_SUFFIX"="$IDEA_OUTPUT"/$file
-done
-
-#override template variables
+#override template
 if [ -d "$TEMPLATES_OVERRIDE" ] ; then
     for file in `ls -p "$TEMPLATES_OVERRIDE" | grep -v /`; do
         cp "$TEMPLATES_OVERRIDE"/$file "$IDEA_OUTPUT"/
-    	VAR_SUFFIX=`echo $file | cut -d'.' -f1 | tr [:lower:] [:upper:]`
-        eval "$VAR_SUFFIX"_TEMPLATE="$TEMPLATES_OVERRIDE"/$file
     done
 fi
 
@@ -94,14 +91,6 @@ if [ "$VERBOSE" = "true" ] ; then
   echo "idea template dir: $IDEA_TEMPLATE"
 fi
 
-if [ ! -f "$JDK_TEMPLATE" ] ; then
-  echo "FATAL: cannot find $JDK_TEMPLATE" >&2; exit 1
-fi
-
-if [ ! -f "$ANT_TEMPLATE" ] ; then
-  echo "FATAL: cannot find $ANT_TEMPLATE" >&2; exit 1
-fi
-
 cd $TOP ; make -f "$IDEA_MAKE/idea.gmk" -I $MAKE_DIR/.. idea MAKEOVERRIDES= OUT=$IDEA_OUTPUT/env.cfg MODULES="$*" || exit 1
 cd $SCRIPT_DIR
 
@@ -124,8 +113,6 @@ if [ "x$SPEC" = "x" ] ; then
   echo "FATAL: SPEC is empty" >&2; exit 1
 fi
 
-SOURCE_FOLDER="      <sourceFolder url=\"file://\$MODULE_DIR\$/####\" isTestSource=\"false\" />"
-SOURCE_FOLDERS_DONE="false"
 
 addSourceFolder() {
   root=$@
@@ -134,84 +121,45 @@ addSourceFolder() {
   printf "%s\n" "$folder" >> $IDEA_JDK
 }
 
-### Generate project iml
+### Replace template variables
 
-rm -f $IDEA_JDK
-while IFS= read -r line
-do
-  if echo "$line" | egrep "^ .* <sourceFolder.*####" > /dev/null ; then
-    if [ "$SOURCE_FOLDERS_DONE" = "false" ] ; then
-      SOURCE_FOLDERS_DONE="true"
-      for root in $MODULE_ROOTS; do
-         addSourceFolder $root
-      done
-    fi
-  else
-    printf "%s\n" "$line" >> $IDEA_JDK
-  fi
-done < "$JDK_TEMPLATE"
+NUM_REPLACEMENTS=0
 
-
-MODULE_NAME="        <property name=\"module.name\" value=\"####\" />"
-
-addModuleName() {
-  mn="`echo "$MODULE_NAME" | sed -e s@"\(.*\)####\(.*\)"@"\1$MODULE_NAMES\2"@`"
-  printf "%s\n" "$mn" >> $IDEA_ANT
+replace_template_file() {
+    for i in $(seq 1 $NUM_REPLACEMENTS); do
+      eval "sed -i \"s|\${FROM${i}}|\${TO${i}}|g\" $1"
+    done
 }
 
-BUILD_DIR="        <property name=\"build.target.dir\" value=\"####\" />"
-
-addBuildDir() {
-  DIR=`dirname $SPEC`
-  mn="`echo "$BUILD_DIR" | sed -e s@"\(.*\)####\(.*\)"@"\1$DIR\2"@`"
-  printf "%s\n" "$mn" >> $IDEA_ANT
+replace_template_dir() {
+    for f in `find $1 -type f` ; do
+        replace_template_file $f
+    done
 }
 
-### Generate ant.xml
-
-rm -f $IDEA_ANT
-while IFS= read -r line
-do
-  if echo "$line" | egrep "^ .* <property name=\"module.name\"" > /dev/null ; then
-    addModuleName
-  elif echo "$line" | egrep "^ .* <property name=\"build.target.dir\"" > /dev/null ; then
-    addBuildDir
-  else
-    printf "%s\n" "$line" >> $IDEA_ANT
-  fi
-done < "$ANT_TEMPLATE"
-
-### Generate misc.xml
-
-rm -f $IDEA_MISC
-
-JTREG_HOME="    <path>####</path>"
-
-IMAGES_DIR="    <jre alt=\"true\" value=\"####\" />"
-
-addImagesDir() {
-  DIR=`dirname $SPEC`/images/jdk
-  mn="`echo "$IMAGES_DIR" | sed -e s@"\(.*\)####\(.*\)"@"\1$DIR\2"@`"
-  printf "%s\n" "$mn" >> $IDEA_MISC
+add_replacement() {
+    NUM_REPLACEMENTS=`expr $NUM_REPLACEMENTS + 1`
+    eval FROM$NUM_REPLACEMENTS='$1'
+    eval TO$NUM_REPLACEMENTS='$2'
 }
 
-addJtregHome() {
-  DIR=`dirname $SPEC`
-  mn="`echo "$JTREG_HOME" | sed -e s@"\(.*\)####\(.*\)"@"\1$JT_HOME\2"@`"
-  printf "%s\n" "$mn" >> $IDEA_MISC
-}
+add_replacement "###BUILD_DIR###" "`dirname $SPEC`"
+add_replacement "###MODULE_NAMES###" "$MODULE_NAMES"
+add_replacement "###JTREG_HOME###" "$JT_HOME"
+add_replacement "###IMAGES_DIR###" "`dirname $SPEC`/images/jdk"
+add_replacement "###ROOT_DIR###" "$TOPLEVEL_DIR"
+add_replacement "###IDEA_DIR###" "$IDEA_OUTPUT"
 
-rm -f $MISC_ANT
-while IFS= read -r line
-do
-  if echo "$line" | egrep "^ .*<path>jtreg_home</path>" > /dev/null ; then
-	addJtregHome
-  elif echo "$line" | egrep "^ .*<jre alt=\"true\" value=\"images_jdk\"" > /dev/null ; then
-    addImagesDir
-  else
-    printf "%s\n" "$line" >> $IDEA_MISC
-  fi
-done < "$MISC_TEMPLATE"
+SOURCE_PREFIX="<sourceFolder url=\"file://"
+SOURCE_POSTFIX="\" isTestSource=\"false\" />"
+
+for root in $MODULE_ROOTS; do
+    SOURCES=$SOURCES"\n$SOURCE_PREFIX""$root""$SOURCE_POSTFIX"
+done
+
+add_replacement "###SOURCE_ROOTS###" "$SOURCES"
+
+replace_template_dir "$IDEA_OUTPUT"
 
 ### Compile the custom Logger
 
diff --git a/make/idea/template/ant.xml b/make/idea/template/ant.xml
index 89862ba1f78..c99a025be03 100644
--- a/make/idea/template/ant.xml
+++ b/make/idea/template/ant.xml
@@ -1,12 +1,12 @@
 <?xml version="1.0" encoding="UTF-8"?>
 <project version="4">
   <component name="AntConfiguration">
-    <buildFile url="file://$PROJECT_DIR$/make/idea/build.xml">
+    <buildFile url="file://###ROOT_DIR###/make/idea/build.xml">
       <properties>
         <property name="intellij.ismake" value="$IsMake$" />
-        <property name="build.target.dir" value="specDir" /> <!-- this will be replaced -->
-        <property name="module.name" value="java.base" /> <!-- this will be replaced -->
-        <property name="idea.dir" value="$ModuleFileDir$" />
+        <property name="build.target.dir" value="###BUILD_DIR###" />
+        <property name="module.name" value="###MODULE_NAMES###" />
+        <property name="idea.dir" value="###IDEA_DIR###" />
       </properties>
       <executeOn event="afterCompilation" target="post-make" />
     </buildFile>
diff --git a/make/idea/template/compiler.xml b/make/idea/template/compiler.xml
index 51d78fb9733..eef129e7b87 100644
--- a/make/idea/template/compiler.xml
+++ b/make/idea/template/compiler.xml
@@ -3,10 +3,10 @@
   <component name="CompilerConfiguration">
     <option name="DEFAULT_COMPILER" value="Javac" />
     <excludeFromCompile>
-      <directory url="file://$PROJECT_DIR$/src" includeSubdirectories="true" />
-      <directory url="file://$PROJECT_DIR$/build" includeSubdirectories="true" />
-      <directory url="file://$PROJECT_DIR$/make" includeSubdirectories="true" />
-      <directory url="file://$PROJECT_DIR$/test" includeSubdirectories="true" />
+      <directory url="file://###ROOT_DIR###/src" includeSubdirectories="true" />
+      <directory url="file://###ROOT_DIR###/build" includeSubdirectories="true" />
+      <directory url="file://###ROOT_DIR###/make" includeSubdirectories="true" />
+      <directory url="file://###ROOT_DIR###/test" includeSubdirectories="true" />
     </excludeFromCompile>
     <resourceExtensions />
     <wildcardResourcePatterns>
@@ -25,4 +25,5 @@
       </profile>
     </annotationProcessing>
   </component>
-</project>
\ No newline at end of file
+</project>
+
diff --git a/make/idea/template/jdk.iml b/make/idea/template/jdk.iml
index c3fb9c6963a..c7482e6212e 100644
--- a/make/idea/template/jdk.iml
+++ b/make/idea/template/jdk.iml
@@ -2,10 +2,10 @@
 <module type="JAVA_MODULE" version="4">
   <component name="NewModuleRootManager" inherit-compiler-output="true">
     <exclude-output />
-    <content url="file://$MODULE_DIR$">
-      <sourceFolder url="file://$MODULE_DIR$/####" isTestSource="false" />
-      <excludeFolder url="file://$MODULE_DIR$/build" />
-      <excludeFolder url="file://$MODULE_DIR$/make" />
+    <content url="file://###ROOT_DIR###">
+      ###SOURCE_ROOTS###
+      <excludeFolder url="file://###ROOT_DIR###/build" />
+      <excludeFolder url="file://###ROOT_DIR###/make" />
     </content>
     <orderEntry type="sourceFolder" forTests="false" />
     <orderEntry type="inheritedJdk" />
diff --git a/make/idea/template/misc.xml b/make/idea/template/misc.xml
index 509bb021f2b..f9e33b817d7 100644
--- a/make/idea/template/misc.xml
+++ b/make/idea/template/misc.xml
@@ -4,15 +4,15 @@
     <entry_points version="2.0" />
   </component>
   <component name="JTRegService">
-    <path>jtreg_home</path> <!-- this will be replaced -->
-    <workDir>build</workDir>
-    <jre alt="true" value="images_jdk" /> <!-- this will be replaced -->
+    <path>###JTREG_HOME###</path>
+    <workDir>###BUILD_DIR###</workDir>
+    <jre alt="true" value="###IMAGES_DIR###" />
     <options></options>
     <ant>
-      <target file="file://$PROJECT_DIR$/make/idea/build.xml" name="images" />
+      <target file="file://###ROOT_DIR###/make/idea/build.xml" name="images" />
     </ant>
   </component>
   <component name="ProjectRootManager" version="2" languageLevel="JDK_1_9" assert-keyword="true" jdk-15="true">
-    <output url="file://$PROJECT_DIR$/build/out" />
+    <output url="file://###BUILD_DIR###" />
   </component>
 </project>
diff --git a/make/idea/template/vcs.xml b/make/idea/template/vcs.xml
index 94ad9258305..21997970079 100644
--- a/make/idea/template/vcs.xml
+++ b/make/idea/template/vcs.xml
@@ -1,7 +1,6 @@
 <?xml version="1.0" encoding="UTF-8"?>
 <project version="4">
   <component name="VcsDirectoryMappings">
-    <mapping directory="$PROJECT_DIR$" vcs="hg4idea" />
+    <mapping directory="###ROOT_DIR###" vcs="hg4idea" />
   </component>
 </project>
-
diff --git a/make/idea/template/workspace.xml b/make/idea/template/workspace.xml
index 384ee54579d..498ec8df0b3 100644
--- a/make/idea/template/workspace.xml
+++ b/make/idea/template/workspace.xml
@@ -2,7 +2,7 @@
 <project version="4">
   <component name="ChangeListManager">
     <ignored path="jdk.iws" />
-    <ignored path="$PROJECT_DIR$/build/idea/out/" />
+    <ignored path="###ROOT_DIR###/build/idea/out/" />
     <ignored path=".idea/" />
   </component>
   <component name="StructureViewFactory">
@@ -11,7 +11,7 @@
   <component name="antWorkspaceConfiguration">
     <option name="IS_AUTOSCROLL_TO_SOURCE" value="false" />
     <option name="FILTER_TARGETS" value="false" />
-    <buildFile url="file://$PROJECT_DIR$/make/idea/build.xml">
+    <buildFile url="file://###ROOT_DIR###/make/idea/build.xml">
       <runInBackground value="false" />
       <targetFilters>
         <filter targetName="clean" isVisible="true" />
diff --git a/make/langtools/intellij/build.xml b/make/langtools/intellij/build.xml
index 68305f9a97e..f08f9d9e5fa 100644
--- a/make/langtools/intellij/build.xml
+++ b/make/langtools/intellij/build.xml
@@ -1,7 +1,7 @@
 <!-- importing.xml -->
 <project name="langtools" basedir = "../../..">
 
-    <script language="javascript" classpath="${idea.dir}/classes">
+    <script language="javascript" classpath=".idea/classes">
         var LangtoolsLogger = Java.type("idea.LangtoolsIdeaAntLogger");
         new LangtoolsLogger(project)
     </script>
diff --git a/make/langtools/intellij/template/ant.xml b/make/langtools/intellij/template/ant.xml
index f7601f1eafe..1f07218654c 100644
--- a/make/langtools/intellij/template/ant.xml
+++ b/make/langtools/intellij/template/ant.xml
@@ -5,7 +5,6 @@
       <properties>
 	    <property name="langtools.jdk.home" value="@IDEA_TARGET_JDK@" />
         <property name="intellij.ismake" value="$IsMake$" />
-        <property name="idea.dir" value="$ModuleFileDir$" />
       </properties>
       <executeOn event="afterCompilation" target="post-make" />
     </buildFile>
diff --git a/make/langtools/intellij/template/misc.xml b/make/langtools/intellij/template/misc.xml
index 76ca3ddf1b1..3b0415c7f2d 100644
--- a/make/langtools/intellij/template/misc.xml
+++ b/make/langtools/intellij/template/misc.xml
@@ -13,6 +13,6 @@
     </ant>
   </component>
   <component name="ProjectRootManager" version="2" languageLevel="JDK_1_8" assert-keyword="true" jdk-15="true" project-jdk-name="1.8" project-jdk-type="JavaSDK">
-    <output url="file://$PROJECT_DIR$/build/.idea-support/out" />
+    <output url="file://$PROJECT_DIR$/build" />
   </component>
 </project>