diff --git a/lib/datadog/ci/configuration/settings.rb b/lib/datadog/ci/configuration/settings.rb
index 856149f8..36d6fff2 100644
--- a/lib/datadog/ci/configuration/settings.rb
+++ b/lib/datadog/ci/configuration/settings.rb
@@ -1,6 +1,7 @@
 # frozen_string_literal: true
 
 require_relative "../ext/settings"
+require_relative "../utils/bundle"
 
 module Datadog
   module CI
@@ -67,6 +68,20 @@ def self.add_settings!(base)
                 o.default true
               end
 
+              option :itr_code_coverage_excluded_paths do |o|
+                o.type :array
+                o.env CI::Ext::Settings::ENV_ITR_CODE_COVERAGE_EXCLUDED_PATHS
+                o.after_set do |paths|
+                  if paths.nil? && (bundle_path = Datadog::CI::Utils::Bundle.location)
+                    paths = [bundle_path]
+                  end
+
+                  paths.map do |path|
+                    File.expand_path(path)
+                  end
+                end
+              end
+
               define_method(:instrument) do |integration_name, options = {}, &block|
                 return unless enabled
 
diff --git a/lib/datadog/ci/ext/environment.rb b/lib/datadog/ci/ext/environment.rb
index 5e3c0034..9a326b6e 100644
--- a/lib/datadog/ci/ext/environment.rb
+++ b/lib/datadog/ci/ext/environment.rb
@@ -23,6 +23,13 @@ module Environment
         TAG_NODE_NAME = "ci.node.name"
         TAG_CI_ENV_VARS = "_dd.ci.env_vars"
 
+        POSSIBLE_BUNDLE_LOCATIONS = [
+          ".bundle",
+          "vendor/bundle",
+          "vendor/cache",
+          "vendor/gems"
+        ].freeze
+
         module_function
 
         def tags(env)
diff --git a/lib/datadog/ci/ext/settings.rb b/lib/datadog/ci/ext/settings.rb
index 9e2bfaf4..a2d66d5d 100644
--- a/lib/datadog/ci/ext/settings.rb
+++ b/lib/datadog/ci/ext/settings.rb
@@ -12,6 +12,7 @@ module Settings
         ENV_FORCE_TEST_LEVEL_VISIBILITY = "DD_CIVISIBILITY_FORCE_TEST_LEVEL_VISIBILITY"
         ENV_ITR_ENABLED = "DD_CIVISIBILITY_ITR_ENABLED"
         ENV_GIT_METADATA_UPLOAD_ENABLED = "DD_CIVISIBILITY_GIT_METADATA_UPLOAD_ENABLED"
+        ENV_ITR_CODE_COVERAGE_EXCLUDED_PATHS = "DD_CIVISIBILITY_ITR_CODE_COVERAGE_EXCLUDED_PATHS"
 
         # Source: https://docs.datadoghq.com/getting_started/site/
         DD_SITE_ALLOWLIST = [
diff --git a/lib/datadog/ci/utils/bundle.rb b/lib/datadog/ci/utils/bundle.rb
new file mode 100644
index 00000000..d890945a
--- /dev/null
+++ b/lib/datadog/ci/utils/bundle.rb
@@ -0,0 +1,20 @@
+# frozen_string_literal: true
+
+require_relative "../ext/environment"
+require_relative "../git/local_repository"
+
+module Datadog
+  module CI
+    module Utils
+      module Bundle
+        def self.location
+          Ext::Environment::POSSIBLE_BUNDLE_LOCATIONS.each do |location|
+            path = File.join(Datadog::CI::Git::LocalRepository.root, location)
+            return path if File.directory?(path)
+          end
+          nil
+        end
+      end
+    end
+  end
+end
diff --git a/sig/datadog/ci/ext/environment.rbs b/sig/datadog/ci/ext/environment.rbs
index 9e875937..04e04368 100644
--- a/sig/datadog/ci/ext/environment.rbs
+++ b/sig/datadog/ci/ext/environment.rbs
@@ -27,6 +27,8 @@ module Datadog
 
         TAG_CI_ENV_VARS: String
 
+        POSSIBLE_BUNDLE_LOCATIONS: Array[String]
+
         PROVIDERS: ::Array[Array[String | Symbol]]
 
         def self?.tags: (untyped env) -> Hash[String, String]
diff --git a/sig/datadog/ci/ext/settings.rbs b/sig/datadog/ci/ext/settings.rbs
index c8847c6c..656774ca 100644
--- a/sig/datadog/ci/ext/settings.rbs
+++ b/sig/datadog/ci/ext/settings.rbs
@@ -9,6 +9,7 @@ module Datadog
         ENV_FORCE_TEST_LEVEL_VISIBILITY: String
         ENV_ITR_ENABLED: String
         ENV_GIT_METADATA_UPLOAD_ENABLED: String
+        ENV_ITR_CODE_COVERAGE_EXCLUDED_PATHS: String
 
         DD_SITE_ALLOWLIST: Array[String]
       end
diff --git a/sig/datadog/ci/utils/bundle.rbs b/sig/datadog/ci/utils/bundle.rbs
new file mode 100644
index 00000000..62696c5f
--- /dev/null
+++ b/sig/datadog/ci/utils/bundle.rbs
@@ -0,0 +1,9 @@
+module Datadog
+  module CI
+    module Utils
+      module Bundle
+        def self.location: () -> String?
+      end
+    end
+  end
+end