diff --git a/core/src/config/base.ts b/core/src/config/base.ts
index fdb4477733..3823ade92f 100644
--- a/core/src/config/base.ts
+++ b/core/src/config/base.ts
@@ -348,6 +348,20 @@ function handleProjectModules(log: Log, projectSpec: ProjectConfig): ProjectConf
       log,
       "Project configuration field `modules` is deprecated in 0.13 and will be removed in 0.14. Please use the `scan` field instead."
     )
+    const scanConfig = projectSpec.scan || {}
+    for (const key of ["include", "exclude"]) {
+      if (projectSpec["modules"][key]) {
+        if (!scanConfig[key]) {
+          scanConfig[key] = projectSpec["modules"][key]
+        } else {
+          log.warn(
+            `Project-level \`${key}\` is set both in \`modules.${key}\` and \`scan.${key}\`. The value from \`scan.${key}\` will be used (and the value from \`modules.${key}\` will not have any effect).`
+          )
+        }
+      }
+    }
+    projectSpec.scan = scanConfig
+    delete projectSpec["modules"]
   }
 
   return projectSpec
diff --git a/core/src/config/project.ts b/core/src/config/project.ts
index 6a86db36eb..06b7f215d6 100644
--- a/core/src/config/project.ts
+++ b/core/src/config/project.ts
@@ -31,7 +31,7 @@ import { memoize } from "lodash-es"
 import type { GenericProviderConfig } from "./provider.js"
 import { providerConfigBaseSchema } from "./provider.js"
 import type { GitScanMode } from "../constants.js"
-import { DOCS_BASE_URL, GardenApiVersion, gitScanModes } from "../constants.js"
+import { DOCS_BASE_URL, GardenApiVersion, defaultGitScanMode, gitScanModes } from "../constants.js"
 import { defaultDotIgnoreFile } from "../util/fs.js"
 import type { CommandInfo } from "../plugin-context.js"
 import type { VcsInfo } from "../vcs/vcs.js"
@@ -267,7 +267,7 @@ const projectScanSchema = createSchema({
         .string()
         .allow(...gitScanModes)
         .only()
-        .default("subtree")
+        .default(defaultGitScanMode)
         .description(
           "Choose how to perform scans of git repositories. The default (`subtree`) runs individual git scans on each action/module path. The `repo` mode scans entire repositories and then filters down to files matching the paths, includes and excludes for each action/module. This can be considerably more efficient for large projects with many actions/modules."
         ),
@@ -424,7 +424,6 @@ export const projectSchema = createSchema({
       "Key/value map of variables to configure for all environments. " + joiVariablesDescription
     ),
   }),
-  rename: [["modules", "scan"]],
 })
 
 export function getDefaultEnvironmentName(defaultName: string, config: ProjectConfig): string {
diff --git a/core/test/data/test-projects/project-include-exclude/garden.yml b/core/test/data/test-projects/project-include-exclude/garden.yml
index fb2a1f7dbd..8f7203b0fd 100644
--- a/core/test/data/test-projects/project-include-exclude/garden.yml
+++ b/core/test/data/test-projects/project-include-exclude/garden.yml
@@ -5,7 +5,12 @@ environments:
   - name: local
 providers:
   - name: test-plugin
+# We use the old `modules.<include|exclude>` fields to test the renaming/moving of the fields to
+# `scan.<include|exclude>` during project config preprocessing (see the `prepareProjectResource` helper).
 scan:
+  git:
+    mode: repo
+modules:
   include:
     - module*/**/*
   exclude:
diff --git a/docs/reference/project-config.md b/docs/reference/project-config.md
index 6a337f0320..2abffa2557 100644
--- a/docs/reference/project-config.md
+++ b/docs/reference/project-config.md
@@ -159,7 +159,7 @@ scan:
     # action/module path. The `repo` mode scans entire repositories and then filters down to files matching the paths,
     # includes and excludes for each action/module. This can be considerably more efficient for large projects with
     # many actions/modules.
-    mode: subtree
+    mode: repo
 
 # A list of output values that the project should export. These are exported by the `garden get outputs` command, as
 # well as when referencing a project as a sub-project within another project.
@@ -578,9 +578,9 @@ scan:
 
 Choose how to perform scans of git repositories. The default (`subtree`) runs individual git scans on each action/module path. The `repo` mode scans entire repositories and then filters down to files matching the paths, includes and excludes for each action/module. This can be considerably more efficient for large projects with many actions/modules.
 
-| Type     | Allowed Values    | Default     | Required |
-| -------- | ----------------- | ----------- | -------- |
-| `string` | "repo", "subtree" | `"subtree"` | Yes      |
+| Type     | Allowed Values    | Default  | Required |
+| -------- | ----------------- | -------- | -------- |
+| `string` | "repo", "subtree" | `"repo"` | Yes      |
 
 ### `outputs[]`