diff --git a/CMakeLists.txt b/CMakeLists.txt
index bd692daf2b4da7e524b44fb578864c7895ce3b95..bd6a915c9fcde4a79104885551504beafa61fb5c 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -53,6 +53,8 @@ if(NOT EXISTS ${PROJECT_SOURCE_DIR}/src/lib/small/CMakeLists.txt)
     endif()
 endif()
 
+option(DEV_BUILD "Enable build options that make debugging more convenient" OFF)
+
 # Define GNU standard installation directories
 include(GNUInstallDirs)
 
@@ -71,12 +73,17 @@ include(cmake/profile.cmake)
 include(cmake/module.cmake)
 include(cmake/thread.cmake)
 include(cmake/hardening.cmake)
+include(cmake/prefix.cmake)
 
 add_compile_flags("C;CXX" ${HARDENING_FLAGS})
 set(DEPENDENCY_CFLAGS "${DEPENDENCY_CFLAGS} ${HARDENING_FLAGS}")
 set(DEPENDENCY_CXXFLAGS "${DEPENDENCY_CXXFLAGS} ${HARDENING_FLAGS}")
 set(CMAKE_EXE_LINKER_FLAGS "${CMAKE_EXE_LINKER_FLAGS} ${HARDENING_LDFLAGS}")
 
+add_compile_flags("C;CXX" ${PREFIX_MAP_FLAGS})
+set(DEPENDENCY_CFLAGS "${DEPENDENCY_CFLAGS} ${PREFIX_MAP_FLAGS}")
+set(DEPENDENCY_CXXFLAGS "${DEPENDENCY_CXXFLAGS} ${PREFIX_MAP_FLAGS}")
+
 set(CMAKE_REQUIRED_DEFINITIONS "-D_GNU_SOURCE")
 
 check_symbol_exists(MAP_ANON sys/mman.h HAVE_MAP_ANON)
diff --git a/changelogs/unreleased/gh-7808-fix-abs-file-paths-in-diag-and-debug-info.md b/changelogs/unreleased/gh-7808-fix-abs-file-paths-in-diag-and-debug-info.md
new file mode 100644
index 0000000000000000000000000000000000000000..9ab923cf5cc0bbc22d178b614c419c0bdcc5b176
--- /dev/null
+++ b/changelogs/unreleased/gh-7808-fix-abs-file-paths-in-diag-and-debug-info.md
@@ -0,0 +1,6 @@
+## feature/build
+
+* Made diagnostics and debugging information provide absolute file paths
+  instead of relative ones when building by default (absolute file paths in
+  debugging information can be retained by turning on `DEV_BUILD` CMake
+  option) (gh-7808).
diff --git a/cmake/prefix.cmake b/cmake/prefix.cmake
new file mode 100644
index 0000000000000000000000000000000000000000..231844a595e3babb93923108092c8a9626c06f45
--- /dev/null
+++ b/cmake/prefix.cmake
@@ -0,0 +1,30 @@
+# Uses the `DEV_BUILD` option.
+
+# Assuming the C and C++ compiler IDs are equal.
+# For clang `MATCHES` is used to match both Clang and AppleClang.
+# `VERSION_GREATER` instead of `VERSION_GREATER_EQUAL` for compatibility
+# with cmake 3.5 on ubuntu 16.04.
+if ((CMAKE_C_COMPILER_ID MATCHES "Clang" AND (CMAKE_C_COMPILER_VERSION VERSION_GREATER "9" OR CMAKE_C_COMPILER_VERSION VERSION_EQUAL "9")) OR
+    (CMAKE_C_COMPILER_ID STREQUAL "GNU" AND (CMAKE_C_COMPILER_VERSION VERSION_GREATER "8" OR CMAKE_C_COMPILER_VERSION VERSION_EQUAL "8")))
+    set(PREFIX_MAP_FLAGS "-fmacro-prefix-map=${CMAKE_SOURCE_DIR}=.")
+endif()
+
+# Assuming the C and C++ compiler IDs are equal.
+# For clang `MATCHES` is used to match both Clang and AppleClang.
+# Since this flag requires an extra command to tell the debugger where to find
+# the source files, which is not convenient for developers, it is disabled when
+# `DEV_BUILD` option is turned on.
+if (NOT DEV_BUILD AND
+    # `VERSION_GREATER` instead of `VERSION_GREATER_EQUAL` for compatibility
+    # with cmake 3.5 on ubuntu 16.04.
+    ((CMAKE_C_COMPILER_ID MATCHES "Clang" AND (CMAKE_C_COMPILER_VERSION VERSION_GREATER "3.8" OR CMAKE_C_COMPILER_VERSION VERSION_EQUAL "3.8")) OR
+    (CMAKE_C_COMPILER_ID STREQUAL "GNU" AND (CMAKE_C_COMPILER_VERSION VERSION_GREATER "4.4.7" OR CMAKE_C_COMPILER_VERSION VERSION_EQUAL "4.4.7"))))
+    # Clang integrated assembler does not support this option.
+    set(CMAKE_REQUIRED_FLAGS "-Wa,--debug-prefix-map")
+    check_c_source_compiles("int main(void) {}" HAVE_AS_DEBUG_PREFIX_MAP)
+    unset(CMAKE_REQUIRED_FLAGS)
+    if (HAVE_WA_DEBUG_PREFIX_MAP)
+        set(AS_DEBUG_PREFIX_MAP_FLAG "-Wa,--debug-prefix-map=${CMAKE_SOURCE_DIR}=.")
+    endif()
+    set(PREFIX_MAP_FLAGS "${PREFIX_MAP_FLAGS} -fdebug-prefix-map=${CMAKE_SOURCE_DIR}=. ${AS_DEBUG_PREFIX_MAP_FLAG}")
+endif()
diff --git a/src/CMakeLists.txt b/src/CMakeLists.txt
index 21a1b87beec4277214cec0827a571cdc2c014af5..fc88caadd94b544065c7c892131f244b389646eb 100644
--- a/src/CMakeLists.txt
+++ b/src/CMakeLists.txt
@@ -272,8 +272,10 @@ add_subdirectory(box)
 include_directories(${EXTRA_BOX_INCLUDE_DIRS})
 
 # Save CMAKE_XXX_FLAGS from this directory for config.h (used in --version)
-set(TARANTOOL_C_FLAGS ${CMAKE_C_FLAGS} PARENT_SCOPE)
-set(TARANTOOL_CXX_FLAGS ${CMAKE_CXX_FLAGS} PARENT_SCOPE)
+string(REPLACE  ${PREFIX_MAP_FLAGS} "" STRIPPED_CMAKE_C_FLAGS ${CMAKE_C_FLAGS})
+set(TARANTOOL_C_FLAGS ${STRIPPED_CMAKE_C_FLAGS} PARENT_SCOPE)
+string(REGEX REPLACE ${PREFIX_MAP_FLAGS} "" STRIPPED_CMAKE_CXX_FLAGS ${CMAKE_CXX_FLAGS})
+set(TARANTOOL_CXX_FLAGS ${STRIPPED_CMAKE_CXX_FLAGS} PARENT_SCOPE)
 
 set(EXPORT_LIST)
 if(BUILD_STATIC)
diff --git a/static-build/CMakeLists.txt b/static-build/CMakeLists.txt
index 4ebcc8e79562685e522e0a35037d38432792a9d5..aea33388cec48660020f46875db22796bf5f8cb7 100644
--- a/static-build/CMakeLists.txt
+++ b/static-build/CMakeLists.txt
@@ -25,9 +25,12 @@ set(READLINE_VERSION 8.0)
 set(READLINE_HASH 7e6c1f16aee3244a69aba6e438295ca3)
 set(BACKUP_STORAGE https://distrib.hb.bizmrg.com)
 
+option(DEV_BUILD "Enable build options that make debugging more convenient" OFF)
+
 include(../cmake/os.cmake)
 include(../cmake/profile.cmake)
 include(../cmake/hardening.cmake)
+include(../cmake/prefix.cmake)
 
 # Pass -isysroot=<SDK_PATH> option on Mac OS to a preprocessor and a C
 # compiler to find header files installed with an SDK.
@@ -54,6 +57,9 @@ set(DEPENDENCY_CFLAGS "${DEPENDENCY_CFLAGS} ${HARDENING_FLAGS}")
 set(DEPENDENCY_CXXFLAGS "${DEPENDENCY_CXXFLAGS} ${HARDENING_FLAGS}")
 set(DEPENDENCY_LDFLAGS "${DEPENDENCY_LDFLAGS} ${HARDENING_LDFLAGS}")
 
+set(DEPENDENCY_CFLAGS "${DEPENDENCY_CFLAGS} ${PREFIX_MAP_FLAGS}")
+set(DEPENDENCY_CXXFLAGS "${DEPENDENCY_CXXFLAGS} ${PREFIX_MAP_FLAGS}")
+
 # Install all libraries required by tarantool at current build dir
 
 #