A gas turbine engine includes a propulsor delivering air into a core engine inward of an outer core panel. The core engine has a compressor section, a combustor and a turbine section. A compressor bleed system includes a bleed valve on a conduit communicating with compressed air from the compressor section. The bleed valve is configured to deliver air into a chamber where it can flow outwardly of the core engine at an exit location radially inward of the outer core panel.