diff --git a/tools/projmgr/include/ProjMgr.h b/tools/projmgr/include/ProjMgr.h
index 259602b3c..24067f34e 100644
--- a/tools/projmgr/include/ProjMgr.h
+++ b/tools/projmgr/include/ProjMgr.h
@@ -21,7 +21,8 @@ enum ErrorCode
 {
   SUCCESS = 0,
   ERROR = 1,
-  VARIABLE_NOT_DEFINED
+  VARIABLE_NOT_DEFINED = 2,
+  COMPILER_NOT_DEFINED = 3,
 };
 
  /**
diff --git a/tools/projmgr/include/ProjMgrWorker.h b/tools/projmgr/include/ProjMgrWorker.h
index 220c34cf8..9dc049ee2 100644
--- a/tools/projmgr/include/ProjMgrWorker.h
+++ b/tools/projmgr/include/ProjMgrWorker.h
@@ -697,6 +697,12 @@ class ProjMgrWorker {
   */
   bool HasVarDefineError();
 
+  /**
+   * @brief check whether compiler is not defined and there are selectable ones
+   * @return true if error is set
+  */
+  bool HasCompilerDefineError();
+
   /**
    * @brief get list of detected undefined layer variables
    * @return list of undefined layer variables
diff --git a/tools/projmgr/src/ProjMgr.cpp b/tools/projmgr/src/ProjMgr.cpp
index 6168b48b1..18e7e82cd 100644
--- a/tools/projmgr/src/ProjMgr.cpp
+++ b/tools/projmgr/src/ProjMgr.cpp
@@ -387,6 +387,10 @@ int ProjMgr::ProcessCommands() {
     if (m_worker.HasVarDefineError()) {
       return ErrorCode::VARIABLE_NOT_DEFINED;
     }
+    // Check if compiler not defined and there are selectable ones
+    if (m_worker.HasCompilerDefineError()) {
+      return ErrorCode::COMPILER_NOT_DEFINED;
+    }
     if (!convSuccess) {
       return ErrorCode::ERROR;
     }
diff --git a/tools/projmgr/src/ProjMgrWorker.cpp b/tools/projmgr/src/ProjMgrWorker.cpp
index 2770e7ad0..54a12bbee 100644
--- a/tools/projmgr/src/ProjMgrWorker.cpp
+++ b/tools/projmgr/src/ProjMgrWorker.cpp
@@ -5030,6 +5030,10 @@ bool ProjMgrWorker::HasVarDefineError() {
   return (m_undefLayerVars.size() > 0 ? true : false);
 }
 
+bool ProjMgrWorker::HasCompilerDefineError() {
+  return (m_undefCompiler && !m_selectableCompilers.empty());
+}
+
 const set<string>& ProjMgrWorker::GetUndefLayerVars() {
   return m_undefLayerVars;
 }
diff --git a/tools/projmgr/test/src/ProjMgrUnitTests.cpp b/tools/projmgr/test/src/ProjMgrUnitTests.cpp
index 19174364a..d39c7d885 100644
--- a/tools/projmgr/test/src/ProjMgrUnitTests.cpp
+++ b/tools/projmgr/test/src/ProjMgrUnitTests.cpp
@@ -6188,7 +6188,7 @@ TEST_F(ProjMgrUnitTests, SelectableToolchains) {
   argv[3] = (char*)"-o";
   argv[4] = (char*)testoutput_folder.c_str();
   argv[5] = (char*)"--cbuildgen";
-  EXPECT_EQ(1, RunProjMgr(6, argv, m_envp));
+  EXPECT_EQ(ErrorCode::COMPILER_NOT_DEFINED, RunProjMgr(6, argv, m_envp));
   const string err = streamRedirect.GetErrorString();
   const string expectedErr = \
     "error csolution: compiler undefined, use '--toolchain' option or add 'compiler: <value>' to yml input, selectable values can be found in cbuild-idx.yml";