diff --git a/cmake/bintools/arcmwdt/target.cmake b/cmake/bintools/arcmwdt/target.cmake
index ea461771830..36f31fffba1 100644
--- a/cmake/bintools/arcmwdt/target.cmake
+++ b/cmake/bintools/arcmwdt/target.cmake
@@ -20,9 +20,16 @@ SET(CMAKE_C_ARCHIVE_FINISH "<CMAKE_AR> -sq <TARGET>")
 
 find_program(CMAKE_GDB     ${CROSS_COMPILE}mdb     PATHS ${TOOLCHAIN_HOME} NO_DEFAULT_PATH)
 
-# MWDT binutils don't support required features like section renaming, so we
-# temporarily had to use GNU objcopy instead
-find_program(CMAKE_OBJCOPY ${ZEPHYR_SDK_CROSS_COMPILE}objcopy PATHS ${ZEPHYR_SDK_INSTALL_DIR} NO_DEFAULT_PATH)
-message(STATUS "Found GNU objcopy helper for MWDT: ${CMAKE_OBJCOPY} (Zephyr SDK ${SDK_VERSION})")
+function(zephyr_sdk_target_cmake)
+  # Scoped loading of variables set by Zephyr SDK target.cmake.
+  include(${ZEPHYR_SDK_INSTALL_DIR}/cmake/zephyr/target.cmake)
+
+  # MWDT binutils don't support required features like section renaming, so we
+  # temporarily had to use GNU objcopy instead
+  find_program(CMAKE_OBJCOPY ${CROSS_COMPILE}objcopy PATHS ${ZEPHYR_SDK_INSTALL_DIR} NO_DEFAULT_PATH)
+  message(STATUS "Found GNU objcopy helper for MWDT: ${CMAKE_OBJCOPY} (Zephyr SDK ${SDK_VERSION})")
+endfunction()
+
+zephyr_sdk_target_cmake()
 
 include(${ZEPHYR_BASE}/cmake/bintools/arcmwdt/target_bintools.cmake)
diff --git a/cmake/toolchain/arcmwdt/generic.cmake b/cmake/toolchain/arcmwdt/generic.cmake
index 3f5fded2dac..42a8331f004 100644
--- a/cmake/toolchain/arcmwdt/generic.cmake
+++ b/cmake/toolchain/arcmwdt/generic.cmake
@@ -23,7 +23,17 @@ find_package(Zephyr-sdk 0.15 REQUIRED)
 # https://github.com/zephyrproject-rtos/sdk-ng/pull/682 got merged and we switch to proper SDK
 # version.
 set(TOOLCHAIN_HOME ${ZEPHYR_SDK_INSTALL_DIR})
-include(${ZEPHYR_SDK_INSTALL_DIR}/cmake/zephyr/target.cmake)
+
+# On very early stage build system needs to get access to DTC preprocessor.
+# MWDT has no it's own preprocessor, so here zephyr-SDK preprocessor is used.
+# At the same time zephyr-SDK requires ARCH variable to be initialized before include "generic.cmake",
+# but in hew HWMv2 model ARCH variable will be initialized more later.
+# This workaround uses any (first awailable, independent on ARCH) toolchain from SDK for DTC preprocessing only.
+# For other build stages ARCMWDT will be used.
+include(${ZEPHYR_SDK_INSTALL_DIR}/cmake/zephyr/generic.cmake)
+unset(TOOLCHAIN_HAS_NEWLIB CACHE)
+unset(TOOLCHAIN_HAS_PICOLIBC CACHE)
+
 set(ZEPHYR_SDK_CROSS_COMPILE ${CROSS_COMPILE})
 # Handling to be improved in Zephyr SDK, to avoid overriding ZEPHYR_TOOLCHAIN_VARIANT by
 # find_package(Zephyr-sdk) if it's already set