diff --git a/changelogs/fragments/fix-windows-lib-env-corruption.yml b/changelogs/fragments/fix-windows-lib-env-corruption.yml
new file mode 100644
index 00000000000..4ad3c478ede
--- /dev/null
+++ b/changelogs/fragments/fix-windows-lib-env-corruption.yml
@@ -0,0 +1,2 @@
+bugfixes:
+- "Fix Windows LIB env var corruption (https://github.com/ansible-collections/ansible.windows/issues/297)."
diff --git a/lib/ansible/module_utils/powershell/Ansible.ModuleUtils.AddType.psm1 b/lib/ansible/module_utils/powershell/Ansible.ModuleUtils.AddType.psm1
index 3a14608e1f4..e4b447224a3 100644
--- a/lib/ansible/module_utils/powershell/Ansible.ModuleUtils.AddType.psm1
+++ b/lib/ansible/module_utils/powershell/Ansible.ModuleUtils.AddType.psm1
@@ -378,7 +378,7 @@ Function Add-CSharpType {
         $originalEnv = @{}
         try {
             'LIB' | ForEach-Object -Process {
-                $value = Get-Item -LiteralPath "Env:\$_" -ErrorAction SilentlyContinue
+                $value = (Get-Item -LiteralPath "Env:\$_" -ErrorAction SilentlyContinue).Value
                 if ($value) {
                     $originalEnv[$_] = $value
                     Remove-Item -LiteralPath "Env:\$_"
diff --git a/test/integration/targets/module_utils_Ansible.ModuleUtils.AddType/library/add_type_test.ps1 b/test/integration/targets/module_utils_Ansible.ModuleUtils.AddType/library/add_type_test.ps1
index 5cb1a72da70..59d09dc3567 100644
--- a/test/integration/targets/module_utils_Ansible.ModuleUtils.AddType/library/add_type_test.ps1
+++ b/test/integration/targets/module_utils_Ansible.ModuleUtils.AddType/library/add_type_test.ps1
@@ -322,6 +322,7 @@ namespace Namespace12
 $env:LIB = "C:\fake\folder\path"
 try {
     Add-CSharpType -Reference $lib_set
+    Assert-Equal -actual $env:LIB -expected "C:\fake\folder\path"
 }
 finally {
     Remove-Item -LiteralPath env:\LIB