diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index c8609fd9f..6e7c1607e 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -59,6 +59,32 @@ you can follow the steps below to test your changes:
     make kind-load kind-deploy
     ```
 
+## How to debug controller tests using ENVTEST
+
+[ENVTEST](https://book.kubebuilder.io/reference/envtest) requires k8s binaries to be downloaded to run the tests.
+To download the necessary binaries, follow the steps below:
+
+```sh
+make envtest-k8s-bins
+```
+
+Note that the binaries are downloaded to the `bin/envtest-binaries` directory.
+
+```sh
+$ tree
+.
+├── envtest-binaries
+│   └── k8s
+│       └── 1.31.0-darwin-arm64
+│           ├── etcd
+│           ├── kube-apiserver
+│           └── kubectl
+```
+
+Now, you can debug them with your IDE:
+
+![Screenshot IDE example](https://github.com/user-attachments/assets/3096d524-0686-48ca-911c-5b843093ad1f)
+
 ### Communication Channels
 
 - Email: [operator-framework-olm-dev](mailto:operator-framework-olm-dev@googlegroups.com)
diff --git a/Makefile b/Makefile
index b91ce1ffc..b18aca141 100644
--- a/Makefile
+++ b/Makefile
@@ -29,10 +29,10 @@ export WAIT_TIMEOUT := 60s
 # Install default ClusterCatalogs
 export INSTALL_DEFAULT_CATALOGS := true
 
-# By default setup-envtest will write to $XDG_DATA_HOME, or $HOME/.local/share if that is not defined.
+# By default setup-envtest binary will write to $XDG_DATA_HOME, or $HOME/.local/share if that is not defined.
 # If $HOME is not set, we need to specify a binary directory to prevent an error in setup-envtest.
 # Useful for some CI/CD environments that set neither $XDG_DATA_HOME nor $HOME.
-SETUP_ENVTEST_BIN_DIR_OVERRIDE=
+SETUP_ENVTEST_BIN_DIR_OVERRIDE += --bin-dir $(ROOT_DIR)/bin/envtest-binaries
 ifeq ($(shell [[ $$HOME == "" || $$HOME == "/" ]] && [[ $$XDG_DATA_HOME == "" ]] && echo true ), true)
 	SETUP_ENVTEST_BIN_DIR_OVERRIDE += --bin-dir /tmp/envtest-binaries
 endif
@@ -158,19 +158,25 @@ test-ext-dev-e2e: $(OPERATOR_SDK) $(KUSTOMIZE) $(KIND) #HELP Run extension creat
 	test/extension-developer-e2e/setup.sh $(OPERATOR_SDK) $(CONTAINER_RUNTIME) $(KUSTOMIZE) $(KIND) $(KIND_CLUSTER_NAME) $(E2E_REGISTRY_NAMESPACE)
 	go test -count=1 -v ./test/extension-developer-e2e/...
 
-.PHONY: test-unit
 ENVTEST_VERSION := $(shell go list -m k8s.io/client-go | cut -d" " -f2 | sed 's/^v0\.\([[:digit:]]\{1,\}\)\.[[:digit:]]\{1,\}$$/1.\1.x/')
 UNIT_TEST_DIRS := $(shell go list ./... | grep -v /test/)
 COVERAGE_UNIT_DIR := $(ROOT_DIR)/coverage/unit
-test-unit: $(SETUP_ENVTEST) #HELP Run the unit tests
+
+.PHONY: envtest-k8s-bins #HELP Uses setup-envtest to download and install the binaries required to run ENVTEST-test based locally at the project/bin directory.
+envtest-k8s-bins: $(SETUP_ENVTEST)
+	mkdir -p $(ROOT_DIR)/bin
+	$(SETUP_ENVTEST) use -p env $(ENVTEST_VERSION) $(SETUP_ENVTEST_BIN_DIR_OVERRIDE)
+
+.PHONY: test-unit
+test-unit: $(SETUP_ENVTEST) envtest-k8s-bins #HELP Run the unit tests
 	rm -rf $(COVERAGE_UNIT_DIR) && mkdir -p $(COVERAGE_UNIT_DIR)
-	eval $$($(SETUP_ENVTEST) use -p env $(ENVTEST_VERSION) $(SETUP_ENVTEST_BIN_DIR_OVERRIDE)) && \
+	KUBEBUILDER_ASSETS="$(shell $(SETUP_ENVTEST) use -p path $(ENVTEST_VERSION) $(SETUP_ENVTEST_BIN_DIR_OVERRIDE))" \
             CGO_ENABLED=1 go test \
                 -tags '$(GO_BUILD_TAGS)' \
                 -cover -coverprofile ${ROOT_DIR}/coverage/unit.out \
                 -count=1 -race -short \
                 $(UNIT_TEST_DIRS) \
-                -test.gocoverdir=$(ROOT_DIR)/coverage/unit
+                -test.gocoverdir=$(COVERAGE_UNIT_DIR)
 
 .PHONY: image-registry
 E2E_REGISTRY_IMAGE=localhost/e2e-test-registry:devel
diff --git a/internal/controllers/suite_test.go b/internal/controllers/suite_test.go
index 52fd8900a..5803d2089 100644
--- a/internal/controllers/suite_test.go
+++ b/internal/controllers/suite_test.go
@@ -26,7 +26,7 @@ import (
 
 	"github.com/stretchr/testify/require"
 	"k8s.io/apimachinery/pkg/api/meta"
-	"k8s.io/apimachinery/pkg/runtime"
+	apimachineryruntime "k8s.io/apimachinery/pkg/runtime"
 	utilruntime "k8s.io/apimachinery/pkg/util/runtime"
 	"k8s.io/client-go/rest"
 	"sigs.k8s.io/controller-runtime/pkg/client"
@@ -64,7 +64,7 @@ func (m *MockUnpacker) Cleanup(_ context.Context, _ *source.BundleSource) error
 func newClient(t *testing.T) client.Client {
 	// TODO: this is a live client, which behaves differently than a cache client.
 	//  We may want to use a caching client instead to get closer to real behavior.
-	sch := runtime.NewScheme()
+	sch := apimachineryruntime.NewScheme()
 	require.NoError(t, ocv1.AddToScheme(sch))
 	cl, err := client.New(config, client.Options{Scheme: sch})
 	require.NoError(t, err)
@@ -162,6 +162,21 @@ func TestMain(m *testing.M) {
 		ErrorIfCRDPathMissing: true,
 	}
 
+	// ENVTEST-based tests require specific binaries. By default, these binaries are located
+	// in paths defined by controller-runtime. However, the `BinaryAssetsDirectory` needs
+	// to be explicitly set when running tests directly (e.g., debugging tests in an IDE)
+	// without using the Makefile targets.
+	//
+	// This is equivalent to configuring your IDE to export the `KUBEBUILDER_ASSETS` environment
+	// variable before each test execution. The following function simplifies this process
+	// by handling the configuration for you.
+	//
+	// To ensure the binaries are in the expected path without manual configuration, run:
+	// `make envtest-k8s-bins`
+	if getFirstFoundEnvTestBinaryDir() != "" {
+		testEnv.BinaryAssetsDirectory = getFirstFoundEnvTestBinaryDir()
+	}
+
 	var err error
 	config, err = testEnv.Start()
 	utilruntime.Must(err)
@@ -179,3 +194,15 @@ func TestMain(m *testing.M) {
 	utilruntime.Must(testEnv.Stop())
 	os.Exit(code)
 }
+
+// getFirstFoundEnvTestBinaryDir finds and returns the first directory under the given path.
+func getFirstFoundEnvTestBinaryDir() string {
+	basePath := filepath.Join("..", "..", "bin", "envtest-binaries", "k8s")
+	entries, _ := os.ReadDir(basePath)
+	for _, entry := range entries {
+		if entry.IsDir() {
+			return filepath.Join(basePath, entry.Name())
+		}
+	}
+	return ""
+}