diff --git a/kayobe/utils.py b/kayobe/utils.py
index b70cb1029..ff4c35ca0 100644
--- a/kayobe/utils.py
+++ b/kayobe/utils.py
@@ -24,6 +24,8 @@
 import shutil
 import subprocess
 import sys
+from urllib.parse import unquote
+from urllib.parse import urlparse
 
 from ansible.parsing.yaml.loader import AnsibleLoader
 import yaml
@@ -67,7 +69,7 @@ def _get_direct_url_if_editable(dist):
                 url = direct_url_content['url']
                 prefix = 'file://'
                 if url.startswith(prefix):
-                    return url[len(prefix):]
+                    return unquote(urlparse(url).path)
 
     return None
 
diff --git a/releasenotes/notes/fix-working-dir-url-encoding-5f50d66547858e37.yaml b/releasenotes/notes/fix-working-dir-url-encoding-5f50d66547858e37.yaml
new file mode 100644
index 000000000..a7ed09bd2
--- /dev/null
+++ b/releasenotes/notes/fix-working-dir-url-encoding-5f50d66547858e37.yaml
@@ -0,0 +1,7 @@
+---
+fixes:
+  - |
+    Fixes a issue where the working directory contains symbols such
+    as @.
+    The previous behaviour tries to load files with url encoded symbols.
+    `LP#2129687 <https://bugs.launchpad.net/kayobe/+bug/2129687>`__