diff --git a/app/observers/project_observer.rb b/app/observers/project_observer.rb
index 6d92562a..2d59daf1 100644
--- a/app/observers/project_observer.rb
+++ b/app/observers/project_observer.rb
@@ -4,7 +4,10 @@ class ProjectObserver < ActiveRecord::Observer
 
     # Move repository if namespace changed
     if project.namespace_id_changed? and not project.new_record?
-      move_project(project)
+      old_dir = Namespace.find_by_id(project.namespace_id_was).try(:path) || ''
+      new_dir = Namespace.find_by_id(project.namespace_id).try(:path) || ''
+
+      Gitlab::ProjectMover.new(project, old_dir, new_dir).execute
     end
   end
 
@@ -23,20 +26,4 @@ class ProjectObserver < ActiveRecord::Observer
   def log_info message
     Gitlab::AppLogger.info message
   end
-
-  def move_project(project)
-    old_dir = Namespace.find_by_id(project.namespace_id_was).try(:path) || ''
-    new_dir = Namespace.find_by_id(project.namespace_id).try(:path) || ''
-
-    # Create new dir if missing
-    new_dir_path = File.join(Gitlab.config.git_base_path, new_dir)
-    Dir.mkdir(new_dir_path) unless File.exists?(new_dir_path)
-
-    old_path = File.join(Gitlab.config.git_base_path, old_dir, "#{project.path}.git")
-    new_path = File.join(new_dir_path, "#{project.path}.git")
-
-    `mv #{old_path} #{new_path}`
-
-    log_info "Project #{project.name} was moved from #{old_path} to #{new_path}"
-  end
 end
diff --git a/features/support/env.rb b/features/support/env.rb
index 1a72d765..42aba5a6 100644
--- a/features/support/env.rb
+++ b/features/support/env.rb
@@ -5,7 +5,7 @@ require 'rspec'
 require 'database_cleaner'
 require 'spinach/capybara'
 
-%w(gitolite_stub stubbed_repository valid_commit).each do |f|
+%w(namespaces_stub gitolite_stub stubbed_repository valid_commit).each do |f|
   require Rails.root.join('spec', 'support', f)
 end
 
diff --git a/lib/gitlab/project_mover.rb b/lib/gitlab/project_mover.rb
new file mode 100644
index 00000000..9dc3e019
--- /dev/null
+++ b/lib/gitlab/project_mover.rb
@@ -0,0 +1,37 @@
+# ProjectMover class
+#
+# Used for moving project repositories from one subdir to another
+module Gitlab
+  class ProjectMover
+    attr_reader :project, :old_dir, :new_dir
+
+    def initialize(project, old_dir, new_dir)
+      @project = project
+      @old_dir = old_dir
+      @new_dir = new_dir
+    end
+
+    def execute
+      # Create new dir if missing
+      new_dir_path = File.join(Gitlab.config.git_base_path, new_dir)
+      Dir.mkdir(new_dir_path) unless File.exists?(new_dir_path)
+
+      old_path = File.join(Gitlab.config.git_base_path, old_dir, "#{project.path}.git")
+      new_path = File.join(new_dir_path, "#{project.path}.git")
+
+      if system("mv #{old_path} #{new_path}")
+        log_info "Project #{project.name} was moved from #{old_path} to #{new_path}"
+        true
+      else
+        log_info "Error! Project #{project.name} cannot be moved from #{old_path} to #{new_path}"
+        false
+      end
+    end
+
+    protected
+
+    def log_info message
+      Gitlab::AppLogger.info message
+    end
+  end
+end
diff --git a/spec/support/namespaces_stub.rb b/spec/support/namespaces_stub.rb
new file mode 100644
index 00000000..35754f56
--- /dev/null
+++ b/spec/support/namespaces_stub.rb
@@ -0,0 +1,14 @@
+require 'namespace'
+require 'gitlab/project_mover'
+
+class Namespace
+  def ensure_dir_exist
+    true
+  end
+end
+
+class Gitlab::ProjectMover
+  def execute
+    true
+  end
+end
diff --git a/spec/support/stubbed_repository.rb b/spec/support/stubbed_repository.rb
index 871319fa..5bf3ea46 100644
--- a/spec/support/stubbed_repository.rb
+++ b/spec/support/stubbed_repository.rb
@@ -28,10 +28,4 @@ module StubbedRepository
   end
 end
 
-class Namespace
-  def ensure_dir_exist
-    true
-  end
-end
-
 Project.send(:include, StubbedRepository)