You can explicitly set up the location where you'd like it to find your cygwin, and consequently make install. Try the following:
- From Window menu, select Preferences
- In Preferences select Nios II Tool Locations
- On that page, find the section labelled 'Cygwin Tools Location (such as make, find, rm)
- Even if it looks like it is pointing to the correct cygwin, select the radio option that says 'Specify the Cygwin tools directory'
- Enter the valid path to the cygwin tools install e.g.
d:\quartus\bin\cygwin\bin - Hit Apply Button
- Hit OK
Try to build again