diff --git a/Gemfile b/Gemfile
index 414a8a6774430d5306ef2a9e225e4878df98dee1..53754392fcae9c01d9ccd3e41a471d70ce64a79c 100644
--- a/Gemfile
+++ b/Gemfile
@@ -493,3 +493,6 @@ gem 'erubi', '~> 1.9.0'
 # Monkey-patched in `config/initializers/mail_encoding_patch.rb`
 # See https://gitlab.com/gitlab-org/gitlab/issues/197386
 gem 'mail', '= 2.7.1'
+
+# File encryption
+gem 'lockbox', '~> 0.3.3'
diff --git a/Gemfile.lock b/Gemfile.lock
index bb64fb09649fd489d77312017ffd8a3858c81070..9e5c29dc820825a21b1989af32cd927559c7d846 100644
--- a/Gemfile.lock
+++ b/Gemfile.lock
@@ -605,6 +605,7 @@ GEM
       rb-inotify (~> 0.9, >= 0.9.7)
       ruby_dep (~> 1.2)
     locale (2.1.2)
+    lockbox (0.3.3)
     lograge (0.10.0)
       actionpack (>= 4)
       activesupport (>= 4)
@@ -1280,6 +1281,7 @@ DEPENDENCIES
   license_finder (~> 5.4)
   licensee (~> 8.9)
   liquid (~> 4.0)
+  lockbox (~> 0.3.3)
   lograge (~> 0.5)
   loofah (~> 2.2)
   lru_redux
diff --git a/app/models/terraform.rb b/app/models/terraform.rb
new file mode 100644
index 0000000000000000000000000000000000000000..3d974ffe0510f1765fc5ea9bb4ecf7973643cf4e
--- /dev/null
+++ b/app/models/terraform.rb
@@ -0,0 +1,7 @@
+# frozen_string_literal: true
+
+module Terraform
+  def self.table_name_prefix
+    'terraform_'
+  end
+end
diff --git a/app/models/terraform/state.rb b/app/models/terraform/state.rb
new file mode 100644
index 0000000000000000000000000000000000000000..8ca4ee9239a81efde8a288b25cbd1f33cb367ce1
--- /dev/null
+++ b/app/models/terraform/state.rb
@@ -0,0 +1,23 @@
+# frozen_string_literal: true
+
+module Terraform
+  class State < ApplicationRecord
+    belongs_to :project
+
+    validates :project_id, presence: true
+
+    after_save :update_file_store, if: :saved_change_to_file?
+
+    mount_uploader :file, StateUploader
+
+    def update_file_store
+      # The file.object_store is set during `uploader.store!`
+      # which happens after object is inserted/updated
+      self.update_column(:file_store, file.object_store)
+    end
+
+    def file_store
+      super || StateUploader.default_store
+    end
+  end
+end
diff --git a/app/uploaders/terraform/state_uploader.rb b/app/uploaders/terraform/state_uploader.rb
new file mode 100644
index 0000000000000000000000000000000000000000..9c5ae8a8bdc52eeeeaf348346323d966ac83019e
--- /dev/null
+++ b/app/uploaders/terraform/state_uploader.rb
@@ -0,0 +1,44 @@
+# frozen_string_literal: true
+
+module Terraform
+  class StateUploader < GitlabUploader
+    include ObjectStorage::Concern
+
+    storage_options Gitlab.config.terraform_state
+
+    delegate :project_id, to: :model
+
+    # Use Lockbox to encrypt/decrypt the stored file (registers CarrierWave callbacks)
+    encrypt(key: :key)
+
+    def filename
+      "#{model.id}.tfstate"
+    end
+
+    def store_dir
+      project_id.to_s
+    end
+
+    def key
+      OpenSSL::HMAC.digest('SHA256', Gitlab::Application.secrets.db_key_base, project_id.to_s)
+    end
+
+    class << self
+      def direct_upload_enabled?
+        false
+      end
+
+      def background_upload_enabled?
+        false
+      end
+
+      def proxy_download_enabled?
+        true
+      end
+
+      def default_store
+        object_store_enabled? ? ObjectStorage::Store::REMOTE : ObjectStorage::Store::LOCAL
+      end
+    end
+  end
+end
diff --git a/changelogs/unreleased/207401-encrypt-decrypt-object-storage-to-support-terraform-state-backend.yml b/changelogs/unreleased/207401-encrypt-decrypt-object-storage-to-support-terraform-state-backend.yml
new file mode 100644
index 0000000000000000000000000000000000000000..31d4c0d15875979595c5653cee4b06664ae969cc
--- /dev/null
+++ b/changelogs/unreleased/207401-encrypt-decrypt-object-storage-to-support-terraform-state-backend.yml
@@ -0,0 +1,5 @@
+---
+title: Create model to store Terraform state files
+merge_request: 26619
+author:
+type: added
diff --git a/config/gitlab.yml.example b/config/gitlab.yml.example
index eb41e4ac42334822c46ef9d4187e8c3ca485f567..b66389b1a6f9de334bb43a45c4a13ce13f303fa6 100644
--- a/config/gitlab.yml.example
+++ b/config/gitlab.yml.example
@@ -320,6 +320,24 @@ production: &base
         # aws_signature_version: 4 # For creation of signed URLs. Set to 2 if provider does not support v4.
         # path_style: true # Use 'host/bucket_name/object' instead of 'bucket_name.host/object'
 
+  ## Terraform state
+  terraform_state:
+    enabled: true
+    # The location where Terraform state files are stored (default: shared/terraform_state).
+    # storage_path: shared/terraform_state
+    object_store:
+      enabled: false
+      remote_directory: terraform_state # The bucket name
+      connection:
+        provider: AWS
+        aws_access_key_id: AWS_ACCESS_KEY_ID
+        aws_secret_access_key: AWS_SECRET_ACCESS_KEY
+        region: us-east-1
+        # host: 'localhost' # default: s3.amazonaws.com
+        # endpoint: 'http://127.0.0.1:9000' # default: nil
+        # aws_signature_version: 4 # For creation of signed URLs. Set to 2 if provider does not support v4.
+        # path_style: true # Use 'host/bucket_name/object' instead of 'bucket_name.host/object'
+
   ## GitLab Pages
   pages:
     enabled: false
@@ -1193,6 +1211,19 @@ test:
         aws_access_key_id: AWS_ACCESS_KEY_ID
         aws_secret_access_key: AWS_SECRET_ACCESS_KEY
         region: us-east-1
+
+  terraform_state:
+    enabled: true
+    storage_path: tmp/tests/terraform_state
+    object_store:
+      enabled: false
+      remote_directory: terraform_state
+      connection:
+        provider: AWS # Only AWS supported at the moment
+        aws_access_key_id: AWS_ACCESS_KEY_ID
+        aws_secret_access_key: AWS_SECRET_ACCESS_KEY
+        region: us-east-1
+
   gitlab:
     host: localhost
     port: 80
diff --git a/config/initializers/1_settings.rb b/config/initializers/1_settings.rb
index 79bfcfd79e137821037d88fd8452dd74f94bbf01..f31762d9ac6ea4d4475080f24e4d7a8b0ab107ff 100644
--- a/config/initializers/1_settings.rb
+++ b/config/initializers/1_settings.rb
@@ -369,6 +369,14 @@
   Settings.dependency_proxy['enabled'] = false unless Gitlab::Runtime.puma?
 end
 
+#
+# Terraform state
+#
+Settings['terraform_state'] ||= Settingslogic.new({})
+Settings.terraform_state['enabled']      = true if Settings.terraform_state['enabled'].nil?
+Settings.terraform_state['storage_path'] = Settings.absolute(Settings.terraform_state['storage_path'] || File.join(Settings.shared['path'], "terraform_state"))
+Settings.terraform_state['object_store'] = ObjectStoreSettings.parse(Settings.terraform_state['object_store'])
+
 #
 # Mattermost
 #
diff --git a/db/migrate/20200305200641_create_terraform_states.rb b/db/migrate/20200305200641_create_terraform_states.rb
new file mode 100644
index 0000000000000000000000000000000000000000..3e137369e3312737e9182191e553e9e3fb775cd4
--- /dev/null
+++ b/db/migrate/20200305200641_create_terraform_states.rb
@@ -0,0 +1,14 @@
+# frozen_string_literal: true
+
+class CreateTerraformStates < ActiveRecord::Migration[6.0]
+  DOWNTIME = false
+
+  def change
+    create_table :terraform_states do |t|
+      t.references :project, index: true, foreign_key: { on_delete: :cascade }, null: false
+      t.timestamps_with_timezone null: false
+      t.integer :file_store, limit: 2
+      t.string :file, limit: 255
+    end
+  end
+end
diff --git a/db/structure.sql b/db/structure.sql
index 6301ec6df80f4bcaeefef8be3dc9d7253ae1e552..0bde7c7469e3a1fc92af4b420a0738345a52df7b 100644
--- a/db/structure.sql
+++ b/db/structure.sql
@@ -5975,6 +5975,24 @@ CREATE SEQUENCE public.term_agreements_id_seq
 
 ALTER SEQUENCE public.term_agreements_id_seq OWNED BY public.term_agreements.id;
 
+CREATE TABLE public.terraform_states (
+    id bigint NOT NULL,
+    project_id bigint NOT NULL,
+    created_at timestamp with time zone NOT NULL,
+    updated_at timestamp with time zone NOT NULL,
+    file_store smallint,
+    file character varying(255)
+);
+
+CREATE SEQUENCE public.terraform_states_id_seq
+    START WITH 1
+    INCREMENT BY 1
+    NO MINVALUE
+    NO MAXVALUE
+    CACHE 1;
+
+ALTER SEQUENCE public.terraform_states_id_seq OWNED BY public.terraform_states.id;
+
 CREATE TABLE public.timelogs (
     id integer NOT NULL,
     time_spent integer NOT NULL,
@@ -7327,6 +7345,8 @@ ALTER TABLE ONLY public.tags ALTER COLUMN id SET DEFAULT nextval('public.tags_id
 
 ALTER TABLE ONLY public.term_agreements ALTER COLUMN id SET DEFAULT nextval('public.term_agreements_id_seq'::regclass);
 
+ALTER TABLE ONLY public.terraform_states ALTER COLUMN id SET DEFAULT nextval('public.terraform_states_id_seq'::regclass);
+
 ALTER TABLE ONLY public.timelogs ALTER COLUMN id SET DEFAULT nextval('public.timelogs_id_seq'::regclass);
 
 ALTER TABLE ONLY public.todos ALTER COLUMN id SET DEFAULT nextval('public.todos_id_seq'::regclass);
@@ -8228,6 +8248,9 @@ ALTER TABLE ONLY public.tags
 ALTER TABLE ONLY public.term_agreements
     ADD CONSTRAINT term_agreements_pkey PRIMARY KEY (id);
 
+ALTER TABLE ONLY public.terraform_states
+    ADD CONSTRAINT terraform_states_pkey PRIMARY KEY (id);
+
 ALTER TABLE ONLY public.timelogs
     ADD CONSTRAINT timelogs_pkey PRIMARY KEY (id);
 
@@ -9966,6 +9989,8 @@ CREATE INDEX index_term_agreements_on_term_id ON public.term_agreements USING bt
 
 CREATE INDEX index_term_agreements_on_user_id ON public.term_agreements USING btree (user_id);
 
+CREATE INDEX index_terraform_states_on_project_id ON public.terraform_states USING btree (project_id);
+
 CREATE INDEX index_timelogs_on_issue_id ON public.timelogs USING btree (issue_id);
 
 CREATE INDEX index_timelogs_on_merge_request_id ON public.timelogs USING btree (merge_request_id);
@@ -11271,6 +11296,9 @@ ALTER TABLE ONLY public.pages_domain_acme_orders
 ALTER TABLE ONLY public.ci_subscriptions_projects
     ADD CONSTRAINT fk_rails_7871f9a97b FOREIGN KEY (upstream_project_id) REFERENCES public.projects(id) ON DELETE CASCADE;
 
+ALTER TABLE ONLY public.terraform_states
+    ADD CONSTRAINT fk_rails_78f54ca485 FOREIGN KEY (project_id) REFERENCES public.projects(id) ON DELETE CASCADE;
+
 ALTER TABLE ONLY public.software_license_policies
     ADD CONSTRAINT fk_rails_7a7a2a92de FOREIGN KEY (software_license_id) REFERENCES public.software_licenses(id) ON DELETE CASCADE;
 
@@ -12742,6 +12770,7 @@ COPY "schema_migrations" (version) FROM STDIN;
 20200304211738
 20200305121159
 20200305151736
+20200305200641
 20200306095654
 20200306160521
 20200306170211
diff --git a/doc/administration/terraform_state.md b/doc/administration/terraform_state.md
new file mode 100644
index 0000000000000000000000000000000000000000..c684178f13ea14ec91a4df23a28f5d4b8092bed4
--- /dev/null
+++ b/doc/administration/terraform_state.md
@@ -0,0 +1,135 @@
+# Terraform state administration (alpha)
+
+> [Introduced](https://gitlab.com/groups/gitlab-org/-/epics/2673) in GitLab 12.10.
+
+GitLab can be used as a backend for [Terraform](../user/infrastructure/index.md) state
+files. The files are encrypted before being stored. This feature is enabled by default.
+
+The storage location of these files defaults to:
+
+- `/var/opt/gitlab/gitlab-rails/shared/terraform_state` for Omnibus GitLab installations.
+- `/home/git/gitlab/shared/terraform_state` for source installations.
+
+These locations can be configured using the options described below.
+
+## Using local storage
+
+NOTE: **Note:**
+This is the default configuration
+
+To change the location where Terraform state files are stored locally, follow the steps
+below.
+
+**In Omnibus installations:**
+
+1. To change the storage path for example to `/mnt/storage/terraform_state`, edit
+   `/etc/gitlab/gitlab.rb` and add the following line:
+
+   ```ruby
+   gitlab_rails['terraform_state_enabled'] = true
+   gitlab_rails['terraform_state_storage_path'] = "/mnt/storage/terraform_state"
+   ```
+
+1. Save the file and [reconfigure GitLab][] for the changes to take effect.
+
+**In installations from source:**
+
+1. To change the storage path for example to `/mnt/storage/terraform_state`, edit
+   `/home/git/gitlab/config/gitlab.yml` and add or amend the following lines:
+
+   ```yaml
+   terraform_state:
+     enabled: true
+     storage_path: /mnt/storage/terraform_state
+   ```
+
+1. Save the file and [restart GitLab][] for the changes to take effect.
+
+## Using object storage **(CORE ONLY)**
+
+Instead of storing Terraform state files on disk, we recommend the use of an object
+store that is S3-compatible instead. This configuration relies on valid credentials to
+be configured already.
+
+### Object storage settings
+
+The following settings are:
+
+- Nested under `terraform_state:` and then `object_store:` on source installations.
+- Prefixed by `terraform_state_object_store_` on Omnibus GitLab installations.
+
+| Setting | Description | Default |
+|---------|-------------|---------|
+| `enabled` | Enable/disable object storage | `true` |
+| `remote_directory` | The bucket name where Terraform state files will be stored | |
+| `connection` | Various connection options described below | |
+
+### S3-compatible connection settings
+
+The connection settings match those provided by [Fog](https://github.com/fog), and are as follows:
+
+| Setting | Description | Default |
+|---------|-------------|---------|
+| `provider` | Always `AWS` for compatible hosts | `AWS` |
+| `aws_access_key_id` | Credentials for AWS or compatible provider | |
+| `aws_secret_access_key` | Credentials for AWS or compatible provider | |
+| `aws_signature_version` | AWS signature version to use. 2 or 4 are valid options. Digital Ocean Spaces and other providers may need 2. | 4 |
+| `enable_signature_v4_streaming` | Set to true to enable HTTP chunked transfers with [AWS v4 signatures](https://docs.aws.amazon.com/AmazonS3/latest/API/sigv4-streaming.html). Oracle Cloud S3 needs this to be false | `true` |
+| `region` | AWS region | us-east-1 |
+| `host` | S3-compatible host when not using AWS. For example, `localhost` or `storage.example.com` | `s3.amazonaws.com` |
+| `endpoint` | Can be used when configuring an S3-compatible service such as [MinIO](https://min.io), by entering a URL such as `http://127.0.0.1:9000` | (optional) |
+| `path_style` | Set to true to use `host/bucket_name/object` style paths instead of `bucket_name.host/object`. Leave as false for AWS S3 | `false` |
+| `use_iam_profile` | For AWS S3, set to true to use an IAM profile instead of access keys | `false` |
+
+**In Omnibus installations:**
+
+1. Edit `/etc/gitlab/gitlab.rb` and add the following lines; replacing with
+   the values you want:
+
+   ```ruby
+   gitlab_rails['terraform_state_enabled'] = true
+   gitlab_rails['terraform_state_object_store_enabled'] = true
+   gitlab_rails['terraform_state_object_store_remote_directory'] = "terraform_state"
+   gitlab_rails['terraform_state_object_store_connection'] = {
+     'provider' => 'AWS',
+     'region' => 'eu-central-1',
+     'aws_access_key_id' => 'AWS_ACCESS_KEY_ID',
+     'aws_secret_access_key' => 'AWS_SECRET_ACCESS_KEY'
+   }
+   ```
+
+   NOTE: **Note:**
+   If you are using AWS IAM profiles, be sure to omit the AWS access key and secret access key/value pairs.
+
+   ```ruby
+   gitlab_rails['terraform_state_object_store_connection'] = {
+     'provider' => 'AWS',
+     'region' => 'eu-central-1',
+     'use_iam_profile' => true
+   }
+   ```
+
+1. Save the file and [reconfigure GitLab][] for the changes to take effect.
+
+**In installations from source:**
+
+1. Edit `/home/git/gitlab/config/gitlab.yml` and add or amend the following
+   lines:
+
+   ```yaml
+   terraform_state:
+     enabled: true
+     object_store:
+       enabled: true
+       remote_directory: "terraform_state" # The bucket name
+       connection:
+         provider: AWS # Only AWS supported at the moment
+         aws_access_key_id: AWS_ACESS_KEY_ID
+         aws_secret_access_key: AWS_SECRET_ACCESS_KEY
+         region: eu-central-1
+   ```
+
+1. Save the file and [restart GitLab][] for the changes to take effect.
+
+[reconfigure gitlab]: restart_gitlab.md#omnibus-gitlab-reconfigure "How to reconfigure Omnibus GitLab"
+[restart gitlab]: restart_gitlab.md#installations-from-source "How to restart GitLab"
diff --git a/spec/factories/terraform/state.rb b/spec/factories/terraform/state.rb
new file mode 100644
index 0000000000000000000000000000000000000000..4b83128ff6edb6c6a9cd5a67658efca7d9dbf34e
--- /dev/null
+++ b/spec/factories/terraform/state.rb
@@ -0,0 +1,11 @@
+# frozen_string_literal: true
+
+FactoryBot.define do
+  factory :terraform_state, class: 'Terraform::State' do
+    project { create(:project) }
+
+    trait :with_file do
+      file { fixture_file_upload('spec/fixtures/terraform/terraform.tfstate') }
+    end
+  end
+end
diff --git a/spec/fixtures/terraform/terraform.tfstate b/spec/fixtures/terraform/terraform.tfstate
new file mode 100644
index 0000000000000000000000000000000000000000..3384d9eb005fc32b8499481d2eba126ba5477a37
--- /dev/null
+++ b/spec/fixtures/terraform/terraform.tfstate
@@ -0,0 +1,8 @@
+{
+  "version": 4,
+  "terraform_version": "0.12.21",
+  "serial": 1,
+  "lineage": "25e05991-243d-28d6-ebe3-ee0baae462cf",
+  "outputs": {},
+  "resources": []
+}
\ No newline at end of file
diff --git a/spec/models/terraform/state_spec.rb b/spec/models/terraform/state_spec.rb
new file mode 100644
index 0000000000000000000000000000000000000000..1d677e7ece517f618ec38f67ffd34eacbe439166
--- /dev/null
+++ b/spec/models/terraform/state_spec.rb
@@ -0,0 +1,52 @@
+# frozen_string_literal: true
+
+require 'spec_helper'
+
+describe Terraform::State do
+  subject { create(:terraform_state, :with_file) }
+
+  it { is_expected.to belong_to(:project) }
+
+  it { is_expected.to validate_presence_of(:project_id) }
+
+  before do
+    stub_terraform_state_object_storage(Terraform::StateUploader)
+  end
+
+  describe '#file_store' do
+    context 'when no value is set' do
+      it 'returns the default store of the uploader' do
+        [ObjectStorage::Store::LOCAL, ObjectStorage::Store::REMOTE].each do |store|
+          expect(Terraform::StateUploader).to receive(:default_store).and_return(store)
+          expect(described_class.new.file_store).to eq(store)
+        end
+      end
+    end
+
+    context 'when a value is set' do
+      it 'returns the value' do
+        [ObjectStorage::Store::LOCAL, ObjectStorage::Store::REMOTE].each do |store|
+          expect(build(:terraform_state, file_store: store).file_store).to eq(store)
+        end
+      end
+    end
+  end
+
+  describe '#update_file_store' do
+    context 'when file is stored in object storage' do
+      it 'sets file_store to remote' do
+        expect(subject.file_store).to eq(ObjectStorage::Store::REMOTE)
+      end
+    end
+
+    context 'when file is stored locally' do
+      before do
+        stub_terraform_state_object_storage(Terraform::StateUploader, enabled: false)
+      end
+
+      it 'sets file_store to local' do
+        expect(subject.file_store).to eq(ObjectStorage::Store::LOCAL)
+      end
+    end
+  end
+end
diff --git a/spec/support/helpers/stub_object_storage.rb b/spec/support/helpers/stub_object_storage.rb
index 392300a443637ec45bfaa378a8869313c4171a69..d4ac286e9596610f91a8aa3aec4cad8089dcf52c 100644
--- a/spec/support/helpers/stub_object_storage.rb
+++ b/spec/support/helpers/stub_object_storage.rb
@@ -70,6 +70,13 @@ def stub_uploads_object_storage(uploader = described_class, **params)
                                  **params)
   end
 
+  def stub_terraform_state_object_storage(uploader = described_class, **params)
+    stub_object_storage_uploader(config: Gitlab.config.terraform_state.object_store,
+                                 uploader: uploader,
+                                 remote_directory: 'terraform_state',
+                                 **params)
+  end
+
   def stub_object_storage_multipart_init(endpoint, upload_id = "upload_id")
     stub_request(:post, %r{\A#{endpoint}tmp/uploads/[a-z0-9-]*\?uploads\z})
       .to_return status: 200, body: <<-EOS.strip_heredoc
diff --git a/spec/uploaders/terraform/state_uploader_spec.rb b/spec/uploaders/terraform/state_uploader_spec.rb
new file mode 100644
index 0000000000000000000000000000000000000000..4577a2c4738215b26e5ccfc27b57e7741daa53e5
--- /dev/null
+++ b/spec/uploaders/terraform/state_uploader_spec.rb
@@ -0,0 +1,82 @@
+# frozen_string_literal: true
+
+require 'spec_helper'
+
+describe Terraform::StateUploader do
+  subject { terraform_state.file }
+
+  let(:terraform_state) { create(:terraform_state, file: fixture_file_upload('spec/fixtures/terraform/terraform.tfstate')) }
+
+  before do
+    stub_terraform_state_object_storage
+  end
+
+  describe '#filename' do
+    it 'contains the ID of the terraform state record' do
+      expect(subject.filename).to include(terraform_state.id.to_s)
+    end
+  end
+
+  describe '#store_dir' do
+    it 'contains the ID of the project' do
+      expect(subject.store_dir).to include(terraform_state.project_id.to_s)
+    end
+  end
+
+  describe '#key' do
+    it 'creates a digest with a secret key and the project id' do
+      expect(OpenSSL::HMAC)
+        .to receive(:digest)
+        .with('SHA256', Gitlab::Application.secrets.db_key_base, terraform_state.project_id.to_s)
+        .and_return('digest')
+
+      expect(subject.key).to eq('digest')
+    end
+  end
+
+  describe 'encryption' do
+    it 'encrypts the stored file' do
+      expect(subject.file.read).not_to eq(fixture_file('terraform/terraform.tfstate'))
+    end
+
+    it 'decrypts the file when reading' do
+      expect(subject.read).to eq(fixture_file('terraform/terraform.tfstate'))
+    end
+  end
+
+  describe '.direct_upload_enabled?' do
+    it 'returns false' do
+      expect(described_class.direct_upload_enabled?).to eq(false)
+    end
+  end
+
+  describe '.background_upload_enabled?' do
+    it 'returns false' do
+      expect(described_class.background_upload_enabled?).to eq(false)
+    end
+  end
+
+  describe '.proxy_download_enabled?' do
+    it 'returns true' do
+      expect(described_class.proxy_download_enabled?).to eq(true)
+    end
+  end
+
+  describe '.default_store' do
+    context 'when object storage is enabled' do
+      it 'returns REMOTE' do
+        expect(described_class.default_store).to eq(ObjectStorage::Store::REMOTE)
+      end
+    end
+
+    context 'when object storage is disabled' do
+      before do
+        stub_terraform_state_object_storage(enabled: false)
+      end
+
+      it 'returns LOCAL' do
+        expect(described_class.default_store).to eq(ObjectStorage::Store::LOCAL)
+      end
+    end
+  end
+end