diff --git a/cmd/nvidia-ctk-installer/container/toolkit/toolkit_test.go b/cmd/nvidia-ctk-installer/container/toolkit/toolkit_test.go
index ec9dc5bd..5f12a68b 100644
--- a/cmd/nvidia-ctk-installer/container/toolkit/toolkit_test.go
+++ b/cmd/nvidia-ctk-installer/container/toolkit/toolkit_test.go
@@ -86,6 +86,7 @@ devices:
               hostPath: /host/driver/root/dev/nvidia-caps-imex-channels/channel2047
 containerEdits:
     env:
+        - LIBCUDA_SO_PARENT_DIRECTORY_CONTAINER_PATH=/lib/x86_64-linux-gnu
         - NVIDIA_VISIBLE_DEVICES=void
     hooks:
         - hookName: createContainer
diff --git a/cmd/nvidia-ctk/cdi/generate/generate_test.go b/cmd/nvidia-ctk/cdi/generate/generate_test.go
index 9e9a6a4e..7fa1fb92 100644
--- a/cmd/nvidia-ctk/cdi/generate/generate_test.go
+++ b/cmd/nvidia-ctk/cdi/generate/generate_test.go
@@ -79,6 +79,7 @@ devices:
               hostPath: {{ .driverRoot }}/dev/nvidia0
 containerEdits:
     env:
+        - LIBCUDA_SO_PARENT_DIRECTORY_CONTAINER_PATH=/lib/x86_64-linux-gnu
         - NVIDIA_VISIBLE_DEVICES=void
     deviceNodes:
         - path: /dev/nvidiactl
diff --git a/internal/discover/cache.go b/internal/discover/cache.go
index e9e4b615..56523386 100644
--- a/internal/discover/cache.go
+++ b/internal/discover/cache.go
@@ -23,6 +23,7 @@ type cache struct {
 
 	sync.Mutex
 	devices []Device
+	envVars []EnvVar
 	hooks   []Hook
 	mounts  []Mount
 }
@@ -51,6 +52,20 @@ func (c *cache) Devices() ([]Device, error) {
 	return c.devices, nil
 }
 
+func (c *cache) EnvVars() ([]EnvVar, error) {
+	c.Lock()
+	defer c.Unlock()
+
+	if c.envVars == nil {
+		envVars, err := c.d.EnvVars()
+		if err != nil {
+			return nil, err
+		}
+		c.envVars = envVars
+	}
+	return c.envVars, nil
+}
+
 func (c *cache) Hooks() ([]Hook, error) {
 	c.Lock()
 	defer c.Unlock()
diff --git a/internal/discover/discover.go b/internal/discover/discover.go
index fc639296..07aeb937 100644
--- a/internal/discover/discover.go
+++ b/internal/discover/discover.go
@@ -22,6 +22,12 @@ type Device struct {
 	Path     string
 }
 
+// EnvVar represents a discovered environment variable.
+type EnvVar struct {
+	Name  string
+	Value string
+}
+
 // Mount represents a discovered mount.
 type Mount struct {
 	HostPath string
@@ -41,6 +47,7 @@ type Hook struct {
 //go:generate moq -rm -fmt=goimports -stub -out discover_mock.go . Discover
 type Discover interface {
 	Devices() ([]Device, error)
+	EnvVars() ([]EnvVar, error)
 	Mounts() ([]Mount, error)
 	Hooks() ([]Hook, error)
 }
diff --git a/internal/discover/discover_mock.go b/internal/discover/discover_mock.go
index d9be6ffb..2a66cf0e 100644
--- a/internal/discover/discover_mock.go
+++ b/internal/discover/discover_mock.go
@@ -20,6 +20,9 @@ var _ Discover = &DiscoverMock{}
 //			DevicesFunc: func() ([]Device, error) {
 //				panic("mock out the Devices method")
 //			},
+//			EnvVarsFunc: func() ([]EnvVar, error) {
+//				panic("mock out the EnvVars method")
+//			},
 //			HooksFunc: func() ([]Hook, error) {
 //				panic("mock out the Hooks method")
 //			},
@@ -36,6 +39,9 @@ type DiscoverMock struct {
 	// DevicesFunc mocks the Devices method.
 	DevicesFunc func() ([]Device, error)
 
+	// EnvVarsFunc mocks the EnvVars method.
+	EnvVarsFunc func() ([]EnvVar, error)
+
 	// HooksFunc mocks the Hooks method.
 	HooksFunc func() ([]Hook, error)
 
@@ -47,6 +53,9 @@ type DiscoverMock struct {
 		// Devices holds details about calls to the Devices method.
 		Devices []struct {
 		}
+		// EnvVars holds details about calls to the EnvVars method.
+		EnvVars []struct {
+		}
 		// Hooks holds details about calls to the Hooks method.
 		Hooks []struct {
 		}
@@ -55,6 +64,7 @@ type DiscoverMock struct {
 		}
 	}
 	lockDevices sync.RWMutex
+	lockEnvVars sync.RWMutex
 	lockHooks   sync.RWMutex
 	lockMounts  sync.RWMutex
 }
@@ -90,6 +100,37 @@ func (mock *DiscoverMock) DevicesCalls() []struct {
 	return calls
 }
 
+// EnvVars calls EnvVarsFunc.
+func (mock *DiscoverMock) EnvVars() ([]EnvVar, error) {
+	callInfo := struct {
+	}{}
+	mock.lockEnvVars.Lock()
+	mock.calls.EnvVars = append(mock.calls.EnvVars, callInfo)
+	mock.lockEnvVars.Unlock()
+	if mock.EnvVarsFunc == nil {
+		var (
+			envVarsOut []EnvVar
+			errOut     error
+		)
+		return envVarsOut, errOut
+	}
+	return mock.EnvVarsFunc()
+}
+
+// EnvVarsCalls gets all the calls that were made to EnvVars.
+// Check the length with:
+//
+//	len(mockedDiscover.EnvVarsCalls())
+func (mock *DiscoverMock) EnvVarsCalls() []struct {
+} {
+	var calls []struct {
+	}
+	mock.lockEnvVars.RLock()
+	calls = mock.calls.EnvVars
+	mock.lockEnvVars.RUnlock()
+	return calls
+}
+
 // Hooks calls HooksFunc.
 func (mock *DiscoverMock) Hooks() ([]Hook, error) {
 	callInfo := struct {
diff --git a/internal/discover/envvar.go b/internal/discover/envvar.go
new file mode 100644
index 00000000..3c84db0c
--- /dev/null
+++ b/internal/discover/envvar.go
@@ -0,0 +1,41 @@
+/**
+# SPDX-FileCopyrightText: Copyright (c) 2025 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+# SPDX-License-Identifier: Apache-2.0
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+**/
+
+package discover
+
+var _ Discover = (*EnvVar)(nil)
+
+// Devices returns an empty list of devices for a EnvVar discoverer.
+func (e EnvVar) Devices() ([]Device, error) {
+	return nil, nil
+}
+
+// EnvVars returns an empty list of envs for a EnvVar discoverer.
+func (e EnvVar) EnvVars() ([]EnvVar, error) {
+	return []EnvVar{e}, nil
+}
+
+// Mounts returns an empty list of mounts for a EnvVar discoverer.
+func (e EnvVar) Mounts() ([]Mount, error) {
+	return nil, nil
+}
+
+// Hooks allows the Hook type to also implement the Discoverer interface.
+// It returns a single hook
+func (e EnvVar) Hooks() ([]Hook, error) {
+	return nil, nil
+}
diff --git a/internal/discover/first-valid.go b/internal/discover/first-valid.go
index 36de9204..81c93d3e 100644
--- a/internal/discover/first-valid.go
+++ b/internal/discover/first-valid.go
@@ -45,6 +45,19 @@ func (f firstOf) Devices() ([]Device, error) {
 	return nil, errs
 }
 
+func (f firstOf) EnvVars() ([]EnvVar, error) {
+	var errs error
+	for _, d := range f {
+		envs, err := d.EnvVars()
+		if err != nil {
+			errs = errors.Join(errs, err)
+			continue
+		}
+		return envs, nil
+	}
+	return nil, errs
+}
+
 func (f firstOf) Hooks() ([]Hook, error) {
 	var errs error
 	for _, d := range f {
diff --git a/internal/discover/hooks.go b/internal/discover/hooks.go
index 4259ccf8..fb3ebf6a 100644
--- a/internal/discover/hooks.go
+++ b/internal/discover/hooks.go
@@ -29,6 +29,11 @@ func (h Hook) Devices() ([]Device, error) {
 	return nil, nil
 }
 
+// EnvVars returns an empty list of envs for a Hook discoverer.
+func (h Hook) EnvVars() ([]EnvVar, error) {
+	return nil, nil
+}
+
 // Mounts returns an empty list of mounts for a Hook discoverer.
 func (h Hook) Mounts() ([]Mount, error) {
 	return nil, nil
diff --git a/internal/discover/list.go b/internal/discover/list.go
index 8fbf6e75..a01180cc 100644
--- a/internal/discover/list.go
+++ b/internal/discover/list.go
@@ -51,6 +51,21 @@ func (d list) Devices() ([]Device, error) {
 	return allDevices, nil
 }
 
+// EnvVars returns all environment variables from the included discoverers.
+func (d list) EnvVars() ([]EnvVar, error) {
+	var allEnvs []EnvVar
+
+	for i, di := range d.discoverers {
+		envs, err := di.EnvVars()
+		if err != nil {
+			return nil, fmt.Errorf("error discovering envs for discoverer %v: %w", i, err)
+		}
+		allEnvs = append(allEnvs, envs...)
+	}
+
+	return allEnvs, nil
+}
+
 // Mounts returns all mounts from the included discoverers
 func (d list) Mounts() ([]Mount, error) {
 	var allMounts []Mount
diff --git a/internal/discover/none.go b/internal/discover/none.go
index 554e7eab..3ce62472 100644
--- a/internal/discover/none.go
+++ b/internal/discover/none.go
@@ -27,6 +27,11 @@ func (e None) Devices() ([]Device, error) {
 	return nil, nil
 }
 
+// EnvVars returns an empty list of devices
+func (e None) EnvVars() ([]EnvVar, error) {
+	return nil, nil
+}
+
 // Mounts returns an empty list of mounts
 func (e None) Mounts() ([]Mount, error) {
 	return nil, nil
diff --git a/internal/edits/edits.go b/internal/edits/edits.go
index 029e7885..4538ac31 100644
--- a/internal/edits/edits.go
+++ b/internal/edits/edits.go
@@ -55,6 +55,11 @@ func FromDiscoverer(d discover.Discover) (*cdi.ContainerEdits, error) {
 		return nil, fmt.Errorf("failed to discover devices: %v", err)
 	}
 
+	envs, err := d.EnvVars()
+	if err != nil {
+		return nil, fmt.Errorf("failed to discover environment variables: %w", err)
+	}
+
 	mounts, err := d.Mounts()
 	if err != nil {
 		return nil, fmt.Errorf("failed to discover mounts: %v", err)
@@ -74,6 +79,10 @@ func FromDiscoverer(d discover.Discover) (*cdi.ContainerEdits, error) {
 		c.Append(edits)
 	}
 
+	for _, e := range envs {
+		c.Append(envvar(e).toEdits())
+	}
+
 	for _, m := range mounts {
 		c.Append(mount(m).toEdits())
 	}
diff --git a/internal/edits/envvar.go b/internal/edits/envvar.go
new file mode 100644
index 00000000..359ce6b9
--- /dev/null
+++ b/internal/edits/envvar.go
@@ -0,0 +1,39 @@
+/**
+# SPDX-FileCopyrightText: Copyright (c) 2025 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+# SPDX-License-Identifier: Apache-2.0
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+**/
+
+package edits
+
+import (
+	"fmt"
+
+	"tags.cncf.io/container-device-interface/pkg/cdi"
+	"tags.cncf.io/container-device-interface/specs-go"
+
+	"github.com/NVIDIA/nvidia-container-toolkit/internal/discover"
+)
+
+type envvar discover.EnvVar
+
+// toEdits converts a discovered envvar to CDI Container Edits.
+func (d envvar) toEdits() *cdi.ContainerEdits {
+	e := cdi.ContainerEdits{
+		ContainerEdits: &specs.ContainerEdits{
+			Env: []string{fmt.Sprintf("%s=%s", d.Name, d.Value)},
+		},
+	}
+	return &e
+}
diff --git a/internal/platform-support/dgpu/by-path-hooks.go b/internal/platform-support/dgpu/by-path-hooks.go
index cd38f5e7..ff9c9917 100644
--- a/internal/platform-support/dgpu/by-path-hooks.go
+++ b/internal/platform-support/dgpu/by-path-hooks.go
@@ -41,6 +41,11 @@ func (d *byPathHookDiscoverer) Devices() ([]discover.Device, error) {
 	return nil, nil
 }
 
+// EnvVars returns the empty list for the by-path hook discoverer
+func (d *byPathHookDiscoverer) EnvVars() ([]discover.EnvVar, error) {
+	return nil, nil
+}
+
 // Hooks returns the hooks for the GPU device.
 // The following hooks are detected:
 //  1. A hook to create /dev/dri/by-path symlinks
diff --git a/internal/platform-support/dgpu/nvsandboxutils.go b/internal/platform-support/dgpu/nvsandboxutils.go
index ebeea7c8..9fd7bb4e 100644
--- a/internal/platform-support/dgpu/nvsandboxutils.go
+++ b/internal/platform-support/dgpu/nvsandboxutils.go
@@ -106,6 +106,10 @@ func (d *nvsandboxutilsDGPU) Devices() ([]discover.Device, error) {
 	return devices, nil
 }
 
+func (d *nvsandboxutilsDGPU) EnvVars() ([]discover.EnvVar, error) {
+	return nil, nil
+}
+
 // Hooks returns a hook to create the by-path symlinks for the discovered devices.
 func (d *nvsandboxutilsDGPU) Hooks() ([]discover.Hook, error) {
 	if len(d.deviceLinks) == 0 {
diff --git a/pkg/nvcdi/driver-nvml.go b/pkg/nvcdi/driver-nvml.go
index f49f1129..47b67dd8 100644
--- a/pkg/nvcdi/driver-nvml.go
+++ b/pkg/nvcdi/driver-nvml.go
@@ -82,7 +82,7 @@ func (l *nvcdilib) newDriverVersionDiscoverer(version string) (discover.Discover
 
 // NewDriverLibraryDiscoverer creates a discoverer for the libraries associated with the specified driver version.
 func (l *nvcdilib) NewDriverLibraryDiscoverer(version string) (discover.Discover, error) {
-	libraryPaths, err := getVersionLibs(l.logger, l.driver, version)
+	libraryPaths, libCudaDirectoryPath, err := getVersionLibs(l.logger, l.driver, version)
 	if err != nil {
 		return nil, fmt.Errorf("failed to get libraries for driver version: %v", err)
 	}
@@ -115,6 +115,12 @@ func (l *nvcdilib) NewDriverLibraryDiscoverer(version string) (discover.Discover
 	updateLDCache, _ := discover.NewLDCacheUpdateHook(l.logger, libraries, l.nvidiaCDIHookPath, l.ldconfigPath)
 	discoverers = append(discoverers, updateLDCache)
 
+	environmentVariable := &discover.EnvVar{
+		Name:  "LIBCUDA_SO_PARENT_DIRECTORY_CONTAINER_PATH",
+		Value: libCudaDirectoryPath,
+	}
+	discoverers = append(discoverers, environmentVariable)
+
 	d := discover.Merge(discoverers...)
 
 	return d, nil
@@ -202,39 +208,41 @@ func NewDriverBinariesDiscoverer(logger logger.Interface, driverRoot string) dis
 // getVersionLibs checks the LDCache for libraries ending in the specified driver version.
 // Although the ldcache at the specified driverRoot is queried, the paths are returned relative to this driverRoot.
 // This allows the standard mount location logic to be used for resolving the mounts.
-func getVersionLibs(logger logger.Interface, driver *root.Driver, version string) ([]string, error) {
+func getVersionLibs(logger logger.Interface, driver *root.Driver, version string) ([]string, string, error) {
 	logger.Infof("Using driver version %v", version)
 
 	libCudaPaths, err := cuda.New(
 		driver.Libraries(),
 	).Locate("." + version)
 	if err != nil {
-		return nil, fmt.Errorf("failed to locate libcuda.so.%v: %v", version, err)
+		return nil, "", fmt.Errorf("failed to locate libcuda.so.%v: %v", version, err)
 	}
-	libRoot := filepath.Dir(libCudaPaths[0])
+	libCudaDirectoryPath := filepath.Dir(libCudaPaths[0])
 
 	libraries := lookup.NewFileLocator(
 		lookup.WithLogger(logger),
 		lookup.WithSearchPaths(
-			libRoot,
-			filepath.Join(libRoot, "vdpau"),
+			libCudaDirectoryPath,
+			filepath.Join(libCudaDirectoryPath, "vdpau"),
 		),
 		lookup.WithOptional(true),
 	)
 
 	libs, err := libraries.Locate("*.so." + version)
 	if err != nil {
-		return nil, fmt.Errorf("failed to locate libraries for driver version %v: %v", version, err)
+		return nil, "", fmt.Errorf("failed to locate libraries for driver version %v: %v", version, err)
 	}
 
 	if driver.Root == "/" || driver.Root == "" {
-		return libs, nil
+		return libs, libCudaDirectoryPath, nil
 	}
 
+	libCudaDirectoryPath = driver.RelativeToRoot(libCudaDirectoryPath)
+
 	var relative []string
 	for _, l := range libs {
 		relative = append(relative, strings.TrimPrefix(l, driver.Root))
 	}
 
-	return relative, nil
+	return relative, libCudaDirectoryPath, nil
 }
diff --git a/pkg/nvcdi/workarounds-device-folder-permissions.go b/pkg/nvcdi/workarounds-device-folder-permissions.go
index 511eb1fc..59f623fc 100644
--- a/pkg/nvcdi/workarounds-device-folder-permissions.go
+++ b/pkg/nvcdi/workarounds-device-folder-permissions.go
@@ -55,6 +55,11 @@ func (d *deviceFolderPermissions) Devices() ([]discover.Device, error) {
 	return nil, nil
 }
 
+// EnvVars are empty for this discoverer
+func (d *deviceFolderPermissions) EnvVars() ([]discover.EnvVar, error) {
+	return nil, nil
+}
+
 // Hooks returns a set of hooks that sets the file mode to 755 of parent folders for nested device nodes.
 func (d *deviceFolderPermissions) Hooks() ([]discover.Hook, error) {
 	folders, err := d.getDeviceSubfolders()