diff --git a/lib/spack/env/cc b/lib/spack/env/cc
index 6c4db38ba1..52fc8f524d 100755
--- a/lib/spack/env/cc
+++ b/lib/spack/env/cc
@@ -47,7 +47,8 @@ SPACK_F77_RPATH_ARG
 SPACK_FC_RPATH_ARG
 SPACK_LINKER_ARG
 SPACK_SHORT_SPEC
-SPACK_SYSTEM_DIRS"
+SPACK_SYSTEM_DIRS
+SPACK_MANAGED_DIRS"
 
 # Optional parameters that aren't required to be set
 
@@ -173,21 +174,17 @@ preextend() {
     unset IFS
 }
 
-# system_dir PATH
-# test whether a path is a system directory
-system_dir() {
-    IFS=':'  # SPACK_SYSTEM_DIRS is colon-separated
-    path="$1"
-    for sd in $SPACK_SYSTEM_DIRS; do
-        if [ "${path}" = "${sd}" ] || [ "${path}" = "${sd}/" ]; then
-            # success if path starts with a system prefix
-            unset IFS
-            return 0
-        fi
-    done
-    unset IFS
-    return 1  # fail if path starts no system prefix
+# eval this because SPACK_MANAGED_DIRS and SPACK_SYSTEM_DIRS are inputs we don't wanna loop over.
+# moving the eval inside the function would eval it every call.
+eval "\
+path_order() {
+case \"\$1\" in
+    $SPACK_MANAGED_DIRS) return 0 ;;
+    $SPACK_SYSTEM_DIRS) return 2 ;;
+    /*) return 1 ;;
+esac
 }
+"
 
 # Fail with a clear message if the input contains any bell characters.
 if eval "[ \"\${*#*${lsep}}\" != \"\$*\" ]"; then
@@ -420,11 +417,12 @@ input_command="$*"
 parse_Wl() {
     while [ $# -ne 0 ]; do
     if [ "$wl_expect_rpath" = yes ]; then
-        if system_dir "$1"; then
-            append return_system_rpath_dirs_list "$1"
-        else
-            append return_rpath_dirs_list "$1"
-        fi
+        path_order "$1"
+        case $? in
+            0) append return_spack_store_rpath_dirs_list "$1" ;;
+            1) append return_rpath_dirs_list "$1" ;;
+            2) append return_system_rpath_dirs_list "$1" ;;
+        esac
         wl_expect_rpath=no
     else
         case "$1" in
@@ -432,21 +430,25 @@ parse_Wl() {
                 arg="${1#-rpath=}"
                 if [ -z "$arg" ]; then
                     shift; continue
-                elif system_dir "$arg"; then
-                    append return_system_rpath_dirs_list "$arg"
-                else
-                    append return_rpath_dirs_list "$arg"
                 fi
+                path_order "$arg"
+                case $? in
+                    0) append return_spack_store_rpath_dirs_list "$arg" ;;
+                    1) append return_rpath_dirs_list "$arg" ;;
+                    2) append return_system_rpath_dirs_list "$arg" ;;
+                esac
                 ;;
             --rpath=*)
                 arg="${1#--rpath=}"
                 if [ -z "$arg" ]; then
                     shift; continue
-                elif system_dir "$arg"; then
-                    append return_system_rpath_dirs_list "$arg"
-                else
-                    append return_rpath_dirs_list "$arg"
                 fi
+                path_order "$arg"
+                case $? in
+                    0) append return_spack_store_rpath_dirs_list "$arg" ;;
+                    1) append return_rpath_dirs_list "$arg" ;;
+                    2) append return_system_rpath_dirs_list "$arg" ;;
+                esac
                 ;;
             -rpath|--rpath)
                 wl_expect_rpath=yes
@@ -473,12 +475,20 @@ categorize_arguments() {
 
     return_other_args_list=""
     return_isystem_was_used=""
+
+    return_isystem_spack_store_include_dirs_list=""
     return_isystem_system_include_dirs_list=""
     return_isystem_include_dirs_list=""
+
+    return_spack_store_include_dirs_list=""
     return_system_include_dirs_list=""
     return_include_dirs_list=""
+
+    return_spack_store_lib_dirs_list=""
     return_system_lib_dirs_list=""
     return_lib_dirs_list=""
+
+    return_spack_store_rpath_dirs_list=""
     return_system_rpath_dirs_list=""
     return_rpath_dirs_list=""
 
@@ -546,29 +556,32 @@ categorize_arguments() {
                 arg="${1#-isystem}"
                 return_isystem_was_used=true
                 if [ -z "$arg" ]; then shift; arg="$1"; fi
-                if system_dir "$arg"; then
-                    append return_isystem_system_include_dirs_list "$arg"
-                else
-                    append return_isystem_include_dirs_list "$arg"
-                fi
+                path_order "$arg"
+                case $? in
+                    0) append return_isystem_spack_store_include_dirs_list "$arg" ;;
+                    1) append return_isystem_include_dirs_list "$arg" ;;
+                    2) append return_isystem_system_include_dirs_list "$arg" ;;
+                esac
                 ;;
             -I*)
                 arg="${1#-I}"
                 if [ -z "$arg" ]; then shift; arg="$1"; fi
-                if system_dir "$arg"; then
-                    append return_system_include_dirs_list "$arg"
-                else
-                    append return_include_dirs_list "$arg"
-                fi
+                path_order "$arg"
+                case $? in
+                    0) append return_spack_store_include_dirs_list "$arg" ;;
+                    1) append return_include_dirs_list "$arg" ;;
+                    2) append return_system_include_dirs_list "$arg" ;;
+                esac
                 ;;
             -L*)
                 arg="${1#-L}"
                 if [ -z "$arg" ]; then shift; arg="$1"; fi
-                if system_dir "$arg"; then
-                    append return_system_lib_dirs_list "$arg"
-                else
-                    append return_lib_dirs_list "$arg"
-                fi
+                path_order "$arg"
+                case $? in
+                    0) append return_spack_store_lib_dirs_list "$arg" ;;
+                    1) append return_lib_dirs_list "$arg" ;;
+                    2) append return_system_lib_dirs_list "$arg" ;;
+                esac
                 ;;
             -l*)
                 # -loopopt=0 is generated erroneously in autoconf <= 2.69,
@@ -601,29 +614,32 @@ categorize_arguments() {
                     break
                 elif [ "$xlinker_expect_rpath" = yes ]; then
                     # Register the path of -Xlinker -rpath <other args> -Xlinker <path>
-                    if system_dir "$1"; then
-                        append return_system_rpath_dirs_list "$1"
-                    else
-                        append return_rpath_dirs_list "$1"
-                    fi
+                    path_order "$1"
+                    case $? in
+                        0) append return_spack_store_rpath_dirs_list "$1" ;;
+                        1) append return_rpath_dirs_list "$1" ;;
+                        2) append return_system_rpath_dirs_list "$1" ;;
+                    esac
                     xlinker_expect_rpath=no
                 else
                     case "$1" in
                         -rpath=*)
                             arg="${1#-rpath=}"
-                            if system_dir "$arg"; then
-                                append return_system_rpath_dirs_list "$arg"
-                            else
-                                append return_rpath_dirs_list "$arg"
-                            fi
+                            path_order "$arg"
+                            case $? in
+                                0) append return_spack_store_rpath_dirs_list "$arg" ;;
+                                1) append return_rpath_dirs_list "$arg" ;;
+                                2) append return_system_rpath_dirs_list "$arg" ;;
+                            esac
                             ;;
                         --rpath=*)
                             arg="${1#--rpath=}"
-                            if system_dir "$arg"; then
-                                append return_system_rpath_dirs_list "$arg"
-                            else
-                                append return_rpath_dirs_list "$arg"
-                            fi
+                            path_order "$arg"
+                            case $? in
+                                0) append return_spack_store_rpath_dirs_list "$arg" ;;
+                                1) append return_rpath_dirs_list "$arg" ;;
+                                2) append return_system_rpath_dirs_list "$arg" ;;
+                            esac
                             ;;
                         -rpath|--rpath)
                             xlinker_expect_rpath=yes
@@ -661,16 +677,25 @@ categorize_arguments() {
 }
 
 categorize_arguments "$@"
-    include_dirs_list="$return_include_dirs_list"
-    lib_dirs_list="$return_lib_dirs_list"
-    rpath_dirs_list="$return_rpath_dirs_list"
-    system_include_dirs_list="$return_system_include_dirs_list"
-    system_lib_dirs_list="$return_system_lib_dirs_list"
-    system_rpath_dirs_list="$return_system_rpath_dirs_list"
-    isystem_was_used="$return_isystem_was_used"
-    isystem_system_include_dirs_list="$return_isystem_system_include_dirs_list"
-    isystem_include_dirs_list="$return_isystem_include_dirs_list"
-    other_args_list="$return_other_args_list"
+
+spack_store_include_dirs_list="$return_spack_store_include_dirs_list"
+system_include_dirs_list="$return_system_include_dirs_list"
+include_dirs_list="$return_include_dirs_list"
+
+spack_store_lib_dirs_list="$return_spack_store_lib_dirs_list"
+system_lib_dirs_list="$return_system_lib_dirs_list"
+lib_dirs_list="$return_lib_dirs_list"
+
+spack_store_rpath_dirs_list="$return_spack_store_rpath_dirs_list"
+system_rpath_dirs_list="$return_system_rpath_dirs_list"
+rpath_dirs_list="$return_rpath_dirs_list"
+
+isystem_spack_store_include_dirs_list="$return_isystem_spack_store_include_dirs_list"
+isystem_system_include_dirs_list="$return_isystem_system_include_dirs_list"
+isystem_include_dirs_list="$return_isystem_include_dirs_list"
+
+isystem_was_used="$return_isystem_was_used"
+other_args_list="$return_other_args_list"
 
 #
 # Add flags from Spack's cppflags, cflags, cxxflags, fcflags, fflags, and
@@ -738,16 +763,25 @@ esac
 IFS="$lsep"
     categorize_arguments $spack_flags_list
 unset IFS
-        spack_flags_include_dirs_list="$return_include_dirs_list"
-        spack_flags_lib_dirs_list="$return_lib_dirs_list"
-        spack_flags_rpath_dirs_list="$return_rpath_dirs_list"
-        spack_flags_system_include_dirs_list="$return_system_include_dirs_list"
-        spack_flags_system_lib_dirs_list="$return_system_lib_dirs_list"
-        spack_flags_system_rpath_dirs_list="$return_system_rpath_dirs_list"
-        spack_flags_isystem_was_used="$return_isystem_was_used"
-        spack_flags_isystem_system_include_dirs_list="$return_isystem_system_include_dirs_list"
-        spack_flags_isystem_include_dirs_list="$return_isystem_include_dirs_list"
-        spack_flags_other_args_list="$return_other_args_list"
+
+spack_flags_isystem_spack_store_include_dirs_list="$return_isystem_spack_store_include_dirs_list"
+spack_flags_isystem_system_include_dirs_list="$return_isystem_system_include_dirs_list"
+spack_flags_isystem_include_dirs_list="$return_isystem_include_dirs_list"
+
+spack_flags_spack_store_include_dirs_list="$return_spack_store_include_dirs_list"
+spack_flags_system_include_dirs_list="$return_system_include_dirs_list"
+spack_flags_include_dirs_list="$return_include_dirs_list"
+
+spack_flags_spack_store_lib_dirs_list="$return_spack_store_lib_dirs_list"
+spack_flags_system_lib_dirs_list="$return_system_lib_dirs_list"
+spack_flags_lib_dirs_list="$return_lib_dirs_list"
+
+spack_flags_spack_store_rpath_dirs_list="$return_spack_store_rpath_dirs_list"
+spack_flags_system_rpath_dirs_list="$return_system_rpath_dirs_list"
+spack_flags_rpath_dirs_list="$return_rpath_dirs_list"
+
+spack_flags_isystem_was_used="$return_isystem_was_used"
+spack_flags_other_args_list="$return_other_args_list"
 
 
 # On macOS insert headerpad_max_install_names linker flag
@@ -767,11 +801,13 @@ if [ "$mode" = ccld ] || [ "$mode" = ld ]; then
         # Append RPATH directories. Note that in the case of the
         # top-level package these directories may not exist yet. For dependencies
         # it is assumed that paths have already been confirmed.
+        extend spack_store_rpath_dirs_list SPACK_STORE_RPATH_DIRS
         extend rpath_dirs_list SPACK_RPATH_DIRS
     fi
 fi
 
 if [ "$mode" = ccld ] || [ "$mode" = ld ]; then
+    extend spack_store_lib_dirs_list SPACK_STORE_LINK_DIRS
     extend lib_dirs_list SPACK_LINK_DIRS
 fi
 
@@ -798,38 +834,50 @@ case "$mode" in
         ;;
 esac
 
+case "$mode" in
+    cpp|cc|as|ccld)
+        if [ "$spack_flags_isystem_was_used" = "true" ] || [ "$isystem_was_used" = "true" ]; then
+            extend isystem_spack_store_include_dirs_list SPACK_STORE_INCLUDE_DIRS
+            extend isystem_include_dirs_list SPACK_INCLUDE_DIRS
+        else
+            extend spack_store_include_dirs_list SPACK_STORE_INCLUDE_DIRS
+            extend include_dirs_list SPACK_INCLUDE_DIRS
+        fi
+        ;;
+esac
+
 #
 # Finally, reassemble the command line.
 #
 args_list="$flags_list"
 
-# Insert include directories just prior to any system include directories
+# Include search paths partitioned by (in store, non-sytem, system)
 # NOTE: adding ${lsep} to the prefix here turns every added element into two
-extend args_list spack_flags_include_dirs_list "-I"
-extend args_list include_dirs_list "-I"
+extend args_list spack_flags_spack_store_include_dirs_list -I
+extend args_list spack_store_include_dirs_list -I
+
+extend args_list spack_flags_include_dirs_list -I
+extend args_list include_dirs_list -I
+
+extend args_list spack_flags_isystem_spack_store_include_dirs_list "-isystem${lsep}"
+extend args_list isystem_spack_store_include_dirs_list "-isystem${lsep}"
+
 extend args_list spack_flags_isystem_include_dirs_list "-isystem${lsep}"
 extend args_list isystem_include_dirs_list "-isystem${lsep}"
 
-case "$mode" in
-    cpp|cc|as|ccld)
-        if [ "$spack_flags_isystem_was_used" = "true" ]; then
-            extend args_list SPACK_INCLUDE_DIRS "-isystem${lsep}"
-        elif [ "$isystem_was_used" = "true" ]; then
-            extend args_list SPACK_INCLUDE_DIRS "-isystem${lsep}"
-        else
-            extend args_list SPACK_INCLUDE_DIRS "-I"
-        fi
-        ;;
-esac
-
 extend args_list spack_flags_system_include_dirs_list -I
 extend args_list system_include_dirs_list -I
+
 extend args_list spack_flags_isystem_system_include_dirs_list "-isystem${lsep}"
 extend args_list isystem_system_include_dirs_list "-isystem${lsep}"
 
-# Library search paths
+# Library search paths partitioned by (in store, non-sytem, system)
+extend args_list spack_flags_spack_store_lib_dirs_list "-L"
+extend args_list spack_store_lib_dirs_list "-L"
+
 extend args_list spack_flags_lib_dirs_list "-L"
 extend args_list lib_dirs_list "-L"
+
 extend args_list spack_flags_system_lib_dirs_list "-L"
 extend args_list system_lib_dirs_list "-L"
 
@@ -839,8 +887,12 @@ case "$mode" in
         if [ -n "$dtags_to_add" ] ; then
             append args_list "$linker_arg$dtags_to_add"
         fi
+        extend args_list spack_flags_spack_store_rpath_dirs_list "$rpath"
+        extend args_list spack_store_rpath_dirs_list "$rpath"
+
         extend args_list spack_flags_rpath_dirs_list "$rpath"
         extend args_list rpath_dirs_list "$rpath"
+
         extend args_list spack_flags_system_rpath_dirs_list "$rpath"
         extend args_list system_rpath_dirs_list "$rpath"
         ;;
@@ -848,8 +900,12 @@ case "$mode" in
         if [ -n "$dtags_to_add" ] ; then
             append args_list "$dtags_to_add"
         fi
+        extend args_list spack_flags_spack_store_rpath_dirs_list "-rpath${lsep}"
+        extend args_list spack_store_rpath_dirs_list "-rpath${lsep}"
+
         extend args_list spack_flags_rpath_dirs_list "-rpath${lsep}"
         extend args_list rpath_dirs_list "-rpath${lsep}"
+
         extend args_list spack_flags_system_rpath_dirs_list "-rpath${lsep}"
         extend args_list system_rpath_dirs_list "-rpath${lsep}"
         ;;
diff --git a/lib/spack/spack/build_environment.py b/lib/spack/spack/build_environment.py
index a567951918..86934daf24 100644
--- a/lib/spack/spack/build_environment.py
+++ b/lib/spack/spack/build_environment.py
@@ -68,6 +68,7 @@
 import spack.repo
 import spack.schema.environment
 import spack.spec
+import spack.stage
 import spack.store
 import spack.subprocess_context
 import spack.user_environment
@@ -80,7 +81,7 @@
 from spack.installer import InstallError
 from spack.util.cpus import determine_number_of_jobs
 from spack.util.environment import (
-    SYSTEM_DIRS,
+    SYSTEM_DIR_CASE_ENTRY,
     EnvironmentModifications,
     env_flag,
     filter_system_paths,
@@ -103,9 +104,13 @@
 # Spack's compiler wrappers.
 #
 SPACK_ENV_PATH = "SPACK_ENV_PATH"
+SPACK_MANAGED_DIRS = "SPACK_MANAGED_DIRS"
 SPACK_INCLUDE_DIRS = "SPACK_INCLUDE_DIRS"
 SPACK_LINK_DIRS = "SPACK_LINK_DIRS"
 SPACK_RPATH_DIRS = "SPACK_RPATH_DIRS"
+SPACK_STORE_INCLUDE_DIRS = "SPACK_STORE_INCLUDE_DIRS"
+SPACK_STORE_LINK_DIRS = "SPACK_STORE_LINK_DIRS"
+SPACK_STORE_RPATH_DIRS = "SPACK_STORE_RPATH_DIRS"
 SPACK_RPATH_DEPS = "SPACK_RPATH_DEPS"
 SPACK_LINK_DEPS = "SPACK_LINK_DEPS"
 SPACK_PREFIX = "SPACK_PREFIX"
@@ -418,7 +423,7 @@ def set_compiler_environment_variables(pkg, env):
 
     env.set("SPACK_COMPILER_SPEC", str(spec.compiler))
 
-    env.set("SPACK_SYSTEM_DIRS", ":".join(SYSTEM_DIRS))
+    env.set("SPACK_SYSTEM_DIRS", SYSTEM_DIR_CASE_ENTRY)
 
     compiler.setup_custom_environment(pkg, env)
 
@@ -546,9 +551,23 @@ def update_compiler_args_for_dep(dep):
     include_dirs = list(dedupe(filter_system_paths(include_dirs)))
     rpath_dirs = list(dedupe(filter_system_paths(rpath_dirs)))
 
-    env.set(SPACK_LINK_DIRS, ":".join(link_dirs))
-    env.set(SPACK_INCLUDE_DIRS, ":".join(include_dirs))
-    env.set(SPACK_RPATH_DIRS, ":".join(rpath_dirs))
+    spack_managed_dirs: List[str] = [
+        spack.stage.get_stage_root(),
+        spack.store.STORE.db.root,
+        *(db.root for db in spack.store.STORE.db.upstream_dbs),
+    ]
+
+    env.set(SPACK_MANAGED_DIRS, "|".join(f'"{p}/"*' for p in spack_managed_dirs))
+    is_spack_managed = lambda p: any(p.startswith(store) for store in spack_managed_dirs)
+    link_dirs_spack, link_dirs_system = stable_partition(link_dirs, is_spack_managed)
+    include_dirs_spack, include_dirs_system = stable_partition(include_dirs, is_spack_managed)
+    rpath_dirs_spack, rpath_dirs_system = stable_partition(rpath_dirs, is_spack_managed)
+    env.set(SPACK_LINK_DIRS, ":".join(link_dirs_system))
+    env.set(SPACK_INCLUDE_DIRS, ":".join(include_dirs_system))
+    env.set(SPACK_RPATH_DIRS, ":".join(rpath_dirs_system))
+    env.set(SPACK_STORE_LINK_DIRS, ":".join(link_dirs_spack))
+    env.set(SPACK_STORE_INCLUDE_DIRS, ":".join(include_dirs_spack))
+    env.set(SPACK_STORE_RPATH_DIRS, ":".join(rpath_dirs_spack))
 
 
 def set_package_py_globals(pkg, context: Context = Context.BUILD):
diff --git a/lib/spack/spack/test/build_environment.py b/lib/spack/spack/test/build_environment.py
index 1f2d9e904f..cb47ee5977 100644
--- a/lib/spack/spack/test/build_environment.py
+++ b/lib/spack/spack/test/build_environment.py
@@ -63,7 +63,8 @@ def build_environment(working_env):
     os.environ["SPACK_LINKER_ARG"] = "-Wl,"
     os.environ["SPACK_DTAGS_TO_ADD"] = "--disable-new-dtags"
     os.environ["SPACK_DTAGS_TO_STRIP"] = "--enable-new-dtags"
-    os.environ["SPACK_SYSTEM_DIRS"] = "/usr/include /usr/lib"
+    os.environ["SPACK_SYSTEM_DIRS"] = "/usr/include|/usr/lib"
+    os.environ["SPACK_MANAGED_DIRS"] = f"{prefix}/opt/spack"
     os.environ["SPACK_TARGET_ARGS"] = ""
 
     if "SPACK_DEPENDENCIES" in os.environ:
diff --git a/lib/spack/spack/test/cc.py b/lib/spack/spack/test/cc.py
index 25aab774a7..4bd7bf5c3d 100644
--- a/lib/spack/spack/test/cc.py
+++ b/lib/spack/spack/test/cc.py
@@ -15,7 +15,7 @@
 import spack.config
 import spack.spec
 from spack.paths import build_env_path
-from spack.util.environment import SYSTEM_DIRS, set_env
+from spack.util.environment import SYSTEM_DIR_CASE_ENTRY, set_env
 from spack.util.executable import Executable, ProcessError
 
 #
@@ -159,7 +159,8 @@ def wrapper_environment(working_env):
         SPACK_DEBUG_LOG_ID="foo-hashabc",
         SPACK_COMPILER_SPEC="gcc@4.4.7",
         SPACK_SHORT_SPEC="foo@1.2 arch=linux-rhel6-x86_64 /hashabc",
-        SPACK_SYSTEM_DIRS=":".join(SYSTEM_DIRS),
+        SPACK_SYSTEM_DIRS=SYSTEM_DIR_CASE_ENTRY,
+        SPACK_MANAGED_DIRS="/path/to/spack-1/opt/spack/*|/path/to/spack-2/opt/spack/*",
         SPACK_CC_RPATH_ARG="-Wl,-rpath,",
         SPACK_CXX_RPATH_ARG="-Wl,-rpath,",
         SPACK_F77_RPATH_ARG="-Wl,-rpath,",
@@ -907,3 +908,108 @@ def test_linker_strips_loopopt(wrapper_environment, wrapper_flags):
         result = cc(*(test_args + ["-loopopt=0", "-c", "x.c"]), output=str)
         result = result.strip().split("\n")
         assert "-loopopt=0" in result
+
+
+def test_spack_managed_dirs_are_prioritized(wrapper_environment):
+    # We have two different stores with 5 packages divided over them
+    pkg1 = "/path/to/spack-1/opt/spack/linux-ubuntu22.04-zen2/gcc-13.2.0/pkg-1.0-abcdef"
+    pkg2 = "/path/to/spack-1/opt/spack/linux-ubuntu22.04-zen2/gcc-13.2.0/pkg-2.0-abcdef"
+    pkg3 = "/path/to/spack-2/opt/spack/linux-ubuntu22.04-zen2/gcc-13.2.0/pkg-3.0-abcdef"
+    pkg4 = "/path/to/spack-2/opt/spack/linux-ubuntu22.04-zen2/gcc-13.2.0/pkg-4.0-abcdef"
+    pkg5 = "/path/to/spack-2/opt/spack/linux-ubuntu22.04-zen2/gcc-13.2.0/pkg-5.0-abcdef"
+
+    variables = {
+        # cppflags, ldflags from the command line, config or package.py take highest priority
+        "SPACK_CPPFLAGS": f"-I/usr/local/include -I/external-1/include -I{pkg1}/include",
+        "SPACK_LDFLAGS": f"-L/usr/local/lib -L/external-1/lib -L{pkg1}/lib "
+        f"-Wl,-rpath,/usr/local/lib -Wl,-rpath,/external-1/lib -Wl,-rpath,{pkg1}/lib",
+        # automatic -L, -Wl,-rpath, -I flags from dependencies -- on the spack side they are
+        # already partitioned into "spack owned prefixes" and "non-spack owned prefixes"
+        "SPACK_STORE_LINK_DIRS": f"{pkg4}/lib:{pkg5}/lib",
+        "SPACK_STORE_RPATH_DIRS": f"{pkg4}/lib:{pkg5}/lib",
+        "SPACK_STORE_INCLUDE_DIRS": f"{pkg4}/include:{pkg5}/include",
+        "SPACK_LINK_DIRS": "/external-3/lib:/external-4/lib",
+        "SPACK_RPATH_DIRS": "/external-3/lib:/external-4/lib",
+        "SPACK_INCLUDE_DIRS": "/external-3/include:/external-4/include",
+    }
+
+    with set_env(SPACK_TEST_COMMAND="dump-args", **variables):
+        effective_call = (
+            cc(
+                # system paths
+                "-I/usr/include",
+                "-L/usr/lib",
+                "-Wl,-rpath,/usr/lib",
+                # some other externals
+                "-I/external-2/include",
+                "-L/external-2/lib",
+                "-Wl,-rpath,/external-2/lib",
+                # relative paths are considered "spack managed" since they are in the stage dir
+                "-I..",
+                "-L..",
+                "-Wl,-rpath,..",  # pathological but simpler for the test.
+                # spack store paths
+                f"-I{pkg2}/include",
+                f"-I{pkg3}/include",
+                f"-L{pkg2}/lib",
+                f"-L{pkg3}/lib",
+                f"-Wl,-rpath,{pkg2}/lib",
+                f"-Wl,-rpath,{pkg3}/lib",
+                "hello.c",
+                "-o",
+                "hello",
+                output=str,
+            )
+            .strip()
+            .split("\n")
+        )
+
+    dash_I = [flag[2:] for flag in effective_call if flag.startswith("-I")]
+    dash_L = [flag[2:] for flag in effective_call if flag.startswith("-L")]
+    dash_Wl_rpath = [flag[11:] for flag in effective_call if flag.startswith("-Wl,-rpath")]
+
+    assert dash_I == [
+        # spack owned dirs from SPACK_*FLAGS
+        f"{pkg1}/include",
+        # spack owned dirs from command line & automatic flags for deps (in that order)]
+        "..",
+        f"{pkg2}/include",  # from command line
+        f"{pkg3}/include",  # from command line
+        f"{pkg4}/include",  # from SPACK_STORE_INCLUDE_DIRS
+        f"{pkg5}/include",  # from SPACK_STORE_INCLUDE_DIRS
+        # non-system dirs from SPACK_*FLAGS
+        "/external-1/include",
+        # non-system dirs from command line & automatic flags for deps (in that order)
+        "/external-2/include",  # from command line
+        "/external-3/include",  # from SPACK_INCLUDE_DIRS
+        "/external-4/include",  # from SPACK_INCLUDE_DIRS
+        # system dirs from SPACK_*FLAGS
+        "/usr/local/include",
+        # system dirs from command line
+        "/usr/include",
+    ]
+
+    assert (
+        dash_L
+        == dash_Wl_rpath
+        == [
+            # spack owned dirs from SPACK_*FLAGS
+            f"{pkg1}/lib",
+            # spack owned dirs from command line & automatic flags for deps (in that order)
+            "..",
+            f"{pkg2}/lib",  # from command line
+            f"{pkg3}/lib",  # from command line
+            f"{pkg4}/lib",  # from SPACK_STORE_LINK_DIRS
+            f"{pkg5}/lib",  # from SPACK_STORE_LINK_DIRS
+            # non-system dirs from SPACK_*FLAGS
+            "/external-1/lib",
+            # non-system dirs from command line & automatic flags for deps (in that order)
+            "/external-2/lib",  # from command line
+            "/external-3/lib",  # from SPACK_LINK_DIRS
+            "/external-4/lib",  # from SPACK_LINK_DIRS
+            # system dirs from SPACK_*FLAGS
+            "/usr/local/lib",
+            # system dirs from command line
+            "/usr/lib",
+        ]
+    )
diff --git a/lib/spack/spack/util/environment.py b/lib/spack/spack/util/environment.py
index d2f56dd4a7..af15cd2764 100644
--- a/lib/spack/spack/util/environment.py
+++ b/lib/spack/spack/util/environment.py
@@ -36,6 +36,8 @@
 
 SYSTEM_DIRS = [os.path.join(p, s) for s in SUFFIXES for p in SYSTEM_PATHS] + SYSTEM_PATHS
 
+#: used in the compiler wrapper's `/usr/lib|/usr/lib64|...)` case entry
+SYSTEM_DIR_CASE_ENTRY = "|".join(sorted(f'"{d}{suff}"' for d in SYSTEM_DIRS for suff in ("", "/")))
 
 _SHELL_SET_STRINGS = {
     "sh": "export {0}={1};\n",