diff --git a/components/esp_tee/CMakeLists.txt b/components/esp_tee/CMakeLists.txt
index 908067d0c21..fc58bbed717 100644
--- a/components/esp_tee/CMakeLists.txt
+++ b/components/esp_tee/CMakeLists.txt
@@ -104,11 +104,12 @@ if(CONFIG_SECURE_ENABLE_TEE AND NOT esp_tee_build)
         list(APPEND exclude_srv "attestation")
     endif()
 
+    idf_build_get_property(secure_service_headers_dir SECURE_SERVICE_HEADERS_DIR)
     execute_process(
         COMMAND python ${secure_service_yml_parser_py}
         "--sec_srv" ${secure_service_yml}
         "--exclude" ${exclude_srv}
-        WORKING_DIRECTORY ${CONFIG_DIR}
+        WORKING_DIRECTORY ${secure_service_headers_dir}
     )
 
     execute_process(
diff --git a/components/esp_tee/project_include.cmake b/components/esp_tee/project_include.cmake
index b3c0e912659..cb6fd8aa301 100644
--- a/components/esp_tee/project_include.cmake
+++ b/components/esp_tee/project_include.cmake
@@ -6,7 +6,6 @@ idf_build_get_property(python PYTHON)
 idf_build_get_property(extra_cmake_args EXTRA_CMAKE_ARGS)
 idf_build_get_property(project_dir PROJECT_DIR)
 idf_build_get_property(non_os_build NON_OS_BUILD)
-idf_build_get_property(config_dir CONFIG_DIR)
 idf_build_get_property(custom_secure_service_dir CUSTOM_SECURE_SERVICE_COMPONENT_DIR)
 idf_build_get_property(custom_secure_service_component CUSTOM_SECURE_SERVICE_COMPONENT)
 
@@ -33,13 +32,24 @@ set(tee_binary_files
     "${TEE_BUILD_DIR}/esp_tee.map"
     )
 
+# Use only Newlib libc to reduce binary size, as some Newlib functions are already available in ROM
+set(esp_tee_sdkconfig "${CMAKE_CURRENT_BINARY_DIR}/sdkconfig.esp_tee")
+configure_file("${sdkconfig}" "${esp_tee_sdkconfig}" COPYONLY)
+file(APPEND "${esp_tee_sdkconfig}" "\nCONFIG_LIBC_NEWLIB=y\n")
+
+set(secure_service_headers_dir "${CMAKE_CURRENT_BINARY_DIR}/secure_service_headers")
+make_directory(${secure_service_headers_dir})
+idf_build_set_property(SECURE_SERVICE_HEADERS_DIR "${secure_service_headers_dir}")
+include_directories("${secure_service_headers_dir}")
+
 externalproject_add(esp_tee
     SOURCE_DIR "${CMAKE_CURRENT_LIST_DIR}/subproject"
     BINARY_DIR "${TEE_BUILD_DIR}"
-    CMAKE_ARGS  -DSDKCONFIG=${sdkconfig} -DIDF_PATH=${idf_path} -DIDF_TARGET=${idf_target}
-    -DCONFIG_DIR=${config_dir} -DCUSTOM_SECURE_SERVICE_COMPONENT=${custom_secure_service_component}
-    -DCUSTOM_SECURE_SERVICE_COMPONENT_DIR=${custom_secure_service_dir}
-    ${extra_cmake_args} ${sign_key_arg}
+    CMAKE_ARGS  -DSDKCONFIG=${esp_tee_sdkconfig} -DIDF_PATH=${idf_path} -DIDF_TARGET=${idf_target}
+                -DCUSTOM_SECURE_SERVICE_COMPONENT=${custom_secure_service_component}
+                -DCUSTOM_SECURE_SERVICE_COMPONENT_DIR=${custom_secure_service_dir}
+                -DSECURE_SERVICE_HEADERS_DIR=${secure_service_headers_dir}
+                ${extra_cmake_args} ${sign_key_arg}
     INSTALL_COMMAND ""
     BUILD_ALWAYS 1  # no easy way around this...
     USES_TERMINAL_CONFIGURE TRUE
diff --git a/components/esp_tee/subproject/CMakeLists.txt b/components/esp_tee/subproject/CMakeLists.txt
index b4d77bd32be..74a1094809d 100644
--- a/components/esp_tee/subproject/CMakeLists.txt
+++ b/components/esp_tee/subproject/CMakeLists.txt
@@ -30,8 +30,7 @@ list(APPEND COMPONENTS bootloader_support efuse esp_security mbedtls)
 # TEE-specific components
 list(APPEND COMPONENTS tee_flash_mgr tee_ota_ops tee_sec_storage tee_attestation)
 
-# Include sdkconfig.h derived from the parent build.
-include_directories(${CONFIG_DIR})
+include_directories("${SECURE_SERVICE_HEADERS_DIR}")
 
 include("${IDF_PATH}/tools/cmake/project.cmake")
 set(common_req esp_common esp_hw_support esp_rom freertos hal log newlib soc spi_flash)
diff --git a/components/esp_tee/subproject/main/CMakeLists.txt b/components/esp_tee/subproject/main/CMakeLists.txt
index 83a77c34cea..36ec492f0ab 100644
--- a/components/esp_tee/subproject/main/CMakeLists.txt
+++ b/components/esp_tee/subproject/main/CMakeLists.txt
@@ -61,7 +61,7 @@ idf_component_register(SRCS ${srcs}
 
 # NOTE: The ESP32-H2 ROM does not have sprintf/snprintf implementation,
 # thus newlib-nano implementation from the toolchain has been used.
-if(CONFIG_IDF_TARGET_ESP32H2)
+if(CONFIG_LIBC_NEWLIB AND CONFIG_IDF_TARGET_ESP32H2)
     target_link_libraries(${COMPONENT_LIB} INTERFACE "--specs=nano.specs")
 endif()
 
@@ -76,6 +76,8 @@ target_link_libraries(${COMPONENT_LIB} PRIVATE "-u esp_app_desc_tee_include_impl
 # Newlib syscalls stub implementation: Linking symbol
 target_link_libraries(${COMPONENT_LIB} PRIVATE "-u esp_tee_include_syscalls_impl")
 
+target_link_libraries(${COMPONENT_LIB} PRIVATE "-u esp_tee_include_heap_impl")
+
 # cut PROJECT_VER and PROJECT_NAME to required 32 characters.
 idf_build_get_property(project_ver PROJECT_VER)
 idf_build_get_property(project_name PROJECT_NAME)
diff --git a/components/esp_tee/subproject/main/common/multi_heap.c b/components/esp_tee/subproject/main/common/multi_heap.c
index 4261bd73dd7..49d963a8e65 100644
--- a/components/esp_tee/subproject/main/common/multi_heap.c
+++ b/components/esp_tee/subproject/main/common/multi_heap.c
@@ -3,6 +3,7 @@
  *
  * SPDX-License-Identifier: Apache-2.0
  */
+#include <assert.h>
 #include <stdio.h>
 #include <stdbool.h>
 #include "esp_rom_tlsf.h"
@@ -151,6 +152,33 @@ void *calloc(size_t n, size_t size)
     return esp_tee_heap_calloc(n, size);
 }
 
+#if CONFIG_LIBC_PICOLIBC
+void *realloc(void* ptr, size_t size)
+{
+    if (tee_heap == NULL) {
+        return NULL;
+    }
+
+    if (ptr == NULL) {
+        return esp_tee_heap_malloc(heap, size);
+    }
+
+    size_t previous_block_size = tlsf_block_size(ptr);
+    void *result = tlsf_realloc(tee_heap->heap_data, ptr, size);
+    if (result) {
+        /* No need to subtract the tlsf_alloc_overhead() as it has already
+         * been subtracted when allocating the block at first with malloc */
+        tee_heap->free_bytes += previous_block_size;
+        tee_heap->free_bytes -= tlsf_block_size(result);
+        if (tee_heap->free_bytes < tee_heap->minimum_free_bytes) {
+            tee_heap->minimum_free_bytes = tee_heap->free_bytes;
+        }
+    }
+
+    return result;
+}
+#endif
+
 void free(void *ptr)
 {
     esp_tee_heap_free(ptr);
@@ -206,3 +234,10 @@ void *heap_caps_aligned_calloc(size_t alignment, size_t n, size_t size, uint32_t
     }
     return ptr;
 }
+
+/* No-op function, used to force linking this file,
+   instead of the heap implementation from libc.
+ */
+void esp_tee_include_heap_impl(void)
+{
+}
diff --git a/components/esp_tee/subproject/main/common/syscall_stubs.c b/components/esp_tee/subproject/main/common/syscall_stubs.c
index ee810a1aac2..01c337fb22d 100644
--- a/components/esp_tee/subproject/main/common/syscall_stubs.c
+++ b/components/esp_tee/subproject/main/common/syscall_stubs.c
@@ -15,7 +15,9 @@
 #include <unistd.h>
 
 #include "esp_random.h"
+#include "sdkconfig.h"
 
+#if CONFIG_LIBC_NEWLIB
 // NOTE: Remove compile-time warnings for the below newlib-provided functions
 struct _reent *__getreent(void)
 {
@@ -68,6 +70,54 @@ int _getentropy_r(struct _reent *r, void *buffer, size_t length)
     esp_fill_random(buffer, length);
     return 0;
 }
+#else
+int fstat(int fd, struct stat *st)
+{
+    errno = ENOSYS;
+    return -1;
+}
+
+int close(int fd)
+{
+    errno = ENOSYS;
+    return -1;
+}
+
+off_t lseek(int fd, off_t offset, int whence)
+{
+    errno = ENOSYS;
+    return -1;
+}
+
+ssize_t read(int fd, void *ptr, size_t len)
+{
+    errno = ENOSYS;
+    return -1;
+}
+
+ssize_t write(int fd, const void *ptr, size_t len)
+{
+    errno = ENOSYS;
+    return -1;
+}
+
+int getpid(void)
+{
+    return 1;
+}
+
+int kill(int pid, int sig)
+{
+    errno = ENOSYS;
+    return -1;
+}
+
+int getentropy(void *buffer, size_t length)
+{
+    esp_fill_random(buffer, length);
+    return 0;
+}
+#endif // CONFIG_LIBC_NEWLIB
 
 void *pthread_getspecific(pthread_key_t key)
 {
diff --git a/components/newlib/src/picolibc/picolibc_init.c b/components/newlib/src/picolibc/picolibc_init.c
index 7bd52667cbe..07540a4e554 100644
--- a/components/newlib/src/picolibc/picolibc_init.c
+++ b/components/newlib/src/picolibc/picolibc_init.c
@@ -37,8 +37,55 @@ int __retarget_lock_try_acquire(struct __lock * p);
 int __retarget_lock_try_acquire_recursive(struct __lock *p);
 #endif
 
+#if CONFIG_SECURE_ENABLE_TEE
+struct _reent_stub {
+    int _errno;
+    __FILE *_stdin, *_stdout, *_stderr;
+    int _inc;
+    char *_emergency;
+    int _reserved_0;
+    int _reserved_1;
+    struct __locale_t *_locale;
+    void *_mp;
+    void (*__cleanup)(struct _reent *);
+    int _gamma_signgam;
+    int _cvtlen;
+    char *_cvtbuf;
+    struct _rand48 *_r48;
+#if 0 /* unlikely used fields in ROM implementation */
+    struct __tm *_localtime_buf;
+    char *_asctime_buf;
+    void (** _sig_func)(int);
+    struct _atexit *_reserved_6;
+    struct _atexit _reserved_7;
+    struct _glue _reserved_8;
+    __FILE *__sf;
+    struct _misc_reent *_misc;
+    char *_signal_buf;
+#endif
+};
+
+void *__getreent_rom_stub(void)
+{
+    static struct _reent_stub reent_stub;
+    return &reent_stub;
+}
+#endif // SECURE_ENABLE_TEE
+
 static struct syscall_stub_table s_stub_table = {
+#if CONFIG_SECURE_ENABLE_TEE
+    /*
+     * ESP-TEE uses snprintf() from ROM, which requires at least a fake __getreent stub.
+     *
+     * NOTE: If floating-point variables are intended to be used,
+     *       the following fields must be specified in the syscall_stub_table:
+     *   ._printf_float =
+     *   ._scanf_float =
+     */
+    .__getreent = (void *)__getreent_rom_stub,
+#else
     .__getreent = (void *)abort,
+#endif
     ._malloc_r = (void *)abort,
     ._free_r = (void *)abort,
     ._realloc_r = (void *)abort,