diff --git a/changelogs/fragments/66322-moved_line_causing_terraform_output_suppression.yml b/changelogs/fragments/66322-moved_line_causing_terraform_output_suppression.yml
new file mode 100644
index 00000000000..4598270fbc9
--- /dev/null
+++ b/changelogs/fragments/66322-moved_line_causing_terraform_output_suppression.yml
@@ -0,0 +1,3 @@
+---
+bugfixes:
+  - terraform - reset out and err before plan creation (https://github.com/ansible/ansible/issues/64369)
diff --git a/lib/ansible/modules/cloud/misc/terraform.py b/lib/ansible/modules/cloud/misc/terraform.py
index 90b47c5bccf..439d4752ae3 100644
--- a/lib/ansible/modules/cloud/misc/terraform.py
+++ b/lib/ansible/modules/cloud/misc/terraform.py
@@ -347,6 +347,8 @@ def main():
     # we aren't sure if this plan will result in changes, so assume yes
     needs_application, changed = True, False
 
+    out, err = '', ''
+
     if state == 'absent':
         command.extend(variables_args)
     elif state == 'present' and plan_file:
@@ -359,7 +361,6 @@ def main():
                                                                      module.params.get('targets'), state, plan_file)
         command.append(plan_file)
 
-    out, err = '', ''
     if needs_application and not module.check_mode and not state == 'planned':
         rc, out, err = module.run_command(command, cwd=project_path)
         # checks out to decide if changes were made during execution