diff --git a/packages/kbn-plugin-helpers/README.md b/packages/kbn-plugin-helpers/README.md
index 56df483b8819..c9f7772a5a6d 100644
--- a/packages/kbn-plugin-helpers/README.md
+++ b/packages/kbn-plugin-helpers/README.md
@@ -46,19 +46,6 @@ All configuration setting listed below can simply can be included in the json co
 
 ## Global settings
 
-Setting | Description
-------- | -----------
-`kibanaRoot` | DEPRECATED. Path to your checkout of Kibana, relative paths are ok.
-
-In the next major version of the plugin helpers the `kibanaRoot` setting can no longer be specified, and plugins must be located within the sibling `kibana-extra` folder, for example:
-
-```sh
-.
-├── kibana
-├── kibana-extra/foo-plugin
-└── kibana-extra/bar-plugin
-```
-
 ### Settings for `start`
 
 Setting | Description
diff --git a/packages/kbn-plugin-helpers/cli.js b/packages/kbn-plugin-helpers/cli.js
index b2db60531d2e..bbd9c47e758a 100644
--- a/packages/kbn-plugin-helpers/cli.js
+++ b/packages/kbn-plugin-helpers/cli.js
@@ -77,5 +77,11 @@ program
     });
   }));
 
+program
+  .command('postinstall')
+  .action(taskRunner(function (command) {
+    run('postinstall');
+  }));
+
 program
   .parse(process.argv);
diff --git a/packages/kbn-plugin-helpers/lib/config_file.js b/packages/kbn-plugin-helpers/lib/config_file.js
index bcf4f7657ded..df1bbce98e00 100644
--- a/packages/kbn-plugin-helpers/lib/config_file.js
+++ b/packages/kbn-plugin-helpers/lib/config_file.js
@@ -3,7 +3,6 @@ const readFileSync = require('fs').readFileSync;
 
 const configFiles = [ '.kibana-plugin-helpers.json', '.kibana-plugin-helpers.dev.json' ];
 const configCache = {};
-const KIBANA_ROOT_OVERRIDE = process.env.KIBANA_ROOT ? resolve(process.env.KIBANA_ROOT) : null;
 
 module.exports = function (root) {
   if (!root) root = process.cwd();
@@ -24,27 +23,24 @@ module.exports = function (root) {
     }
   });
 
-  const deprecationMsg = 'has been deprecated and is removed in the next ' +
-    'major version of `@elastic/plugin-helpers`.\n'
+  const deprecationMsg = 'has been removed from `@elastic/plugin-helpers`. ' +
+    'During development your plugin must be located in `../kibana-extra/{pluginName}` ' +
+    'relative to the Kibana directory to work with this package.\n'
 
   if (config.kibanaRoot) {
-    process.stdout.write(
-      'WARNING: The `kibanaRoot` config option ' + deprecationMsg
+    throw new Error(
+      'The `kibanaRoot` config option ' + deprecationMsg
     );
   }
   if (process.env.KIBANA_ROOT) {
-    process.stdout.write(
-      'WARNING: The `KIBANA_ROOT` environment variable ' + deprecationMsg
+    throw new Error(
+      'The `KIBANA_ROOT` environment variable ' + deprecationMsg
     );
   }
 
   // use resolve to ensure correct resolution of paths
-  const { kibanaRoot, includePlugins } = config;
-  if (kibanaRoot) config.kibanaRoot = resolve(root, kibanaRoot);
+  const { includePlugins } = config;
   if (includePlugins) config.includePlugins = includePlugins.map(path => resolve(root, path));
 
-  // allow env setting to override kibana root from config
-  if (KIBANA_ROOT_OVERRIDE) config.kibanaRoot = KIBANA_ROOT_OVERRIDE;
-
   return config;
 };
diff --git a/packages/kbn-plugin-helpers/lib/plugin_config.js b/packages/kbn-plugin-helpers/lib/plugin_config.js
index d544106dce0e..eb30e9ee03ce 100644
--- a/packages/kbn-plugin-helpers/lib/plugin_config.js
+++ b/packages/kbn-plugin-helpers/lib/plugin_config.js
@@ -25,7 +25,7 @@ module.exports = function (root) {
 
   return Object.assign({
     root: root,
-    kibanaRoot: resolve(root, '../kibana'),
+    kibanaRoot: resolve(root, '../../kibana'),
     serverTestPatterns: ['server/**/__tests__/**/*.js'],
     buildSourcePatterns: buildSourcePatterns,
     id: pkg.name,
diff --git a/packages/kbn-plugin-helpers/lib/tasks.js b/packages/kbn-plugin-helpers/lib/tasks.js
index 69f195131a91..ab9ef3df6243 100644
--- a/packages/kbn-plugin-helpers/lib/tasks.js
+++ b/packages/kbn-plugin-helpers/lib/tasks.js
@@ -3,6 +3,7 @@ const startTask = require('../tasks/start');
 const testAllTask = require('../tasks/test/all');
 const testBrowserTask = require('../tasks/test/browser');
 const testServerTask = require('../tasks/test/server');
+const postinstallTask = require('../tasks/postinstall');
 
 module.exports = {
   build: buildTask,
@@ -10,4 +11,5 @@ module.exports = {
   testAll: testAllTask,
   testBrowser: testBrowserTask,
   testServer: testServerTask,
+  postinstall: postinstallTask
 };
\ No newline at end of file
diff --git a/packages/kbn-plugin-helpers/tasks/postinstall/index.js b/packages/kbn-plugin-helpers/tasks/postinstall/index.js
new file mode 100644
index 000000000000..c575100d1360
--- /dev/null
+++ b/packages/kbn-plugin-helpers/tasks/postinstall/index.js
@@ -0,0 +1,25 @@
+const resolve = require('path').resolve;
+const statSync = require('fs').statSync;
+
+module.exports = function (plugin) {
+  if (
+    fileExists(resolve(plugin.root, '../kibana/package.json')) &&
+    !fileExists(resolve(plugin.root, '../../kibana/package.json'))
+  ) {
+    process.stdout.write(
+      '\nWARNING: Kibana now requires that plugins must be located in ' +
+      '`../kibana-extra/{pluginName}` relative to the Kibana folder ' +
+      'during development. We found a Kibana in `../kibana`, but not in ' +
+      '`../../kibana`.\n'
+    );
+  }
+};
+
+function fileExists(path) {
+  try {
+    const stat = statSync(path);
+    return stat.isFile();
+  } catch (e) {
+    return false;
+  }
+}