Windows Azure Package Build Error: The specified path, file name, or both are too long. The fully qualified file name must be less than 260 characters, and the directory name must be less than 248 characters.

I often see when packaging Windows Azure project getting "The specified path, file name, or both are too long. The fully qualified file name must be less than 260 characters, and the directory name must be less than 248 characters." error.

To fix this issue I had to change Cloud Project User options file add add ServiceOutputDirectory entry to the file.

1) Open your Cloud Project file in Windows Explorer from Visual Studio.
2) Find Cloud Project file in opened directory (*.ccproj file)
3) Open file in Notepad
4) Add c:\azure entry

Now your cloud visual studio project user options file looks similar to below:

5) Save file and open your solution again.
6) Package Solution and it should package without above error.