diff --git a/README.md b/README.md
index 6230165..b6d1f82 100644
--- a/README.md
+++ b/README.md
@@ -318,15 +318,12 @@ vim.api.nvim_create_autocmd("LspAttach", {
 ```
 
 **NOTE:**
-By default this plugin excludes analysis of the packages in the flutter SDK. If for example
+By default this plugin excludes analysis of the packages in the flutter SDK and in the pub cache
+(`$PUB_CACHE`, or `~/.pub-cache` / `%LOCALAPPDATA%\Pub\Cache` when it is unset). If for example
 you jump to the definition of `StatelessWidget`, the lsp will not try and index the 100s (maybe 1000s) of
 files in that directory. If for some reason you would like this behaviour set `analysisExcludedFolders = {}`
 You cannot/should not edit the files in the sdk directly so diagnostic analysis of these file is pointless.
 
-**Exclude Note for Windows:**
-To ignore packages installed with pub, consider adding `vim.fn.expand("$HOME/AppData/Local/Pub/Cache")` to
-`analysisExcludedFolders` if you are using PowerShell.
-
 #### Project Configuration
 
 It is possible to configure how each project is run using neovim's `exrc` functionality (see `:help exrc`).
diff --git a/lua/flutter-tools/lsp/init.lua b/lua/flutter-tools/lsp/init.lua
index 7132b0c..a935c85 100644
--- a/lua/flutter-tools/lsp/init.lua
+++ b/lua/flutter-tools/lsp/init.lua
@@ -96,7 +96,8 @@ end
 ---@param opts table
 ---@return table
 local function get_defaults(opts)
-  local flutter_sdk_path = opts.flutter_sdk
+  local flutter_sdk_path = opts.flutter_sdk and vim.uv.fs_realpath(opts.flutter_sdk)
+    or opts.flutter_sdk
   local config = {
     init_options = {
       onlyAnalyzeProjectsWithOpenFiles = true,
@@ -112,6 +113,7 @@ local function get_defaults(opts)
         analysisExcludedFolders = {
           path.join(flutter_sdk_path, "packages"),
           path.join(flutter_sdk_path, ".pub-cache"),
+          path.pub_cache_dir(),
         },
         updateImportsOnRename = true,
       },
diff --git a/lua/flutter-tools/utils/path.lua b/lua/flutter-tools/utils/path.lua
index 1f5d226..7c6192f 100644
--- a/lua/flutter-tools/utils/path.lua
+++ b/lua/flutter-tools/utils/path.lua
@@ -190,6 +190,16 @@ function M.get_absolute_path(input_path)
   end
 end
 
+---Directory where pub stores downloaded packages
+---@return string?
+function M.pub_cache_dir()
+  if vim.env.PUB_CACHE and vim.env.PUB_CACHE ~= "" then return vim.env.PUB_CACHE end
+  if M.is_windows then
+    return vim.env.LOCALAPPDATA and M.join(vim.env.LOCALAPPDATA, "Pub", "Cache")
+  end
+  return vim.env.HOME and M.join(vim.env.HOME, ".pub-cache")
+end
+
 function M.is_flutter_dependency_path(full_path)
   local path_parts = { [[.pub-cache]], [[Pub\Cache]], [[/fvm/versions/]] }
   if full_path then
diff --git a/tests/path_spec.lua b/tests/path_spec.lua
index 731dfa0..12e0e38 100644
--- a/tests/path_spec.lua
+++ b/tests/path_spec.lua
@@ -81,3 +81,31 @@ describe("path.find_root", function()
     assert.are.equal(workspace_root, path.find_root(patterns, file_path))
   end)
 end)
+
+describe("path.pub_cache_dir", function()
+  local original_pub_cache
+  local original_home
+
+  before_each(function()
+    original_pub_cache = vim.env.PUB_CACHE
+    original_home = vim.env.HOME
+  end)
+
+  after_each(function()
+    vim.env.PUB_CACHE = original_pub_cache
+    vim.env.HOME = original_home
+  end)
+
+  it("should use PUB_CACHE when it is set", function()
+    vim.env.PUB_CACHE = "/custom/pub-cache"
+    assert.are.equal("/custom/pub-cache", path.pub_cache_dir())
+  end)
+
+  it("should fall back to the default location when PUB_CACHE is unset", function()
+    vim.env.PUB_CACHE = nil
+    vim.env.HOME = "/home/user"
+    local expected = path.is_windows and path.join(vim.env.LOCALAPPDATA, "Pub", "Cache")
+      or "/home/user/.pub-cache"
+    assert.are.equal(expected, path.pub_cache_dir())
+  end)
+end)