diff --git a/src/vs/platform/terminal/common/terminal.ts b/src/vs/platform/terminal/common/terminal.ts
index e10c028a2b3..dd49a43c6f1 100644
--- a/src/vs/platform/terminal/common/terminal.ts
+++ b/src/vs/platform/terminal/common/terminal.ts
@@ -463,6 +463,11 @@ export interface IShellLaunchConfig {
 	 * or via Size to Content Width
 	 */
 	fixedDimensions?: IFixedTerminalDimensions;
+
+	/**
+	 * Opt-out of the default terminal persistence on restart and reload
+	 */
+	disablePersistence?: boolean;
 }
 
 export interface ICreateContributedTerminalProfileOptions {
diff --git a/src/vs/workbench/api/browser/mainThreadTerminalService.ts b/src/vs/workbench/api/browser/mainThreadTerminalService.ts
index 4e8435e598e..433c8e4312d 100644
--- a/src/vs/workbench/api/browser/mainThreadTerminalService.ts
+++ b/src/vs/workbench/api/browser/mainThreadTerminalService.ts
@@ -141,6 +141,7 @@ export class MainThreadTerminalService implements MainThreadTerminalServiceShape
 			isFeatureTerminal: launchConfig.isFeatureTerminal,
 			isExtensionOwnedTerminal: launchConfig.isExtensionOwnedTerminal,
 			useShellEnvironment: launchConfig.useShellEnvironment,
+			disablePersistence: launchConfig.disablePersistence
 		};
 		const terminal = Promises.withAsyncBody<ITerminalInstance>(async r => {
 			const terminal = await this._terminalService.createTerminal({
diff --git a/src/vs/workbench/api/common/extHost.protocol.ts b/src/vs/workbench/api/common/extHost.protocol.ts
index f8ac5bec2fe..79aa6b416e0 100644
--- a/src/vs/workbench/api/common/extHost.protocol.ts
+++ b/src/vs/workbench/api/common/extHost.protocol.ts
@@ -486,6 +486,7 @@ export interface TerminalLaunchConfig {
 	isExtensionOwnedTerminal?: boolean;
 	useShellEnvironment?: boolean;
 	location?: TerminalLocation | { viewColumn: number, preserveFocus?: boolean } | { parentTerminal: ExtHostTerminalIdentifier } | { splitActiveTerminal: boolean };
+	disablePersistence?: boolean;
 }
 
 export interface MainThreadTerminalServiceShape extends IDisposable {
diff --git a/src/vs/workbench/api/common/extHostTerminalService.ts b/src/vs/workbench/api/common/extHostTerminalService.ts
index 47452b0060b..1573b96578b 100644
--- a/src/vs/workbench/api/common/extHostTerminalService.ts
+++ b/src/vs/workbench/api/common/extHostTerminalService.ts
@@ -152,7 +152,8 @@ export class ExtHostTerminal {
 			isFeatureTerminal: withNullAsUndefined(internalOptions?.isFeatureTerminal),
 			isExtensionOwnedTerminal: true,
 			useShellEnvironment: withNullAsUndefined(internalOptions?.useShellEnvironment),
-			location: internalOptions?.location || this._serializeParentTerminal(options.location, internalOptions?.resolvedExtHostIdentifier)
+			location: internalOptions?.location || this._serializeParentTerminal(options.location, internalOptions?.resolvedExtHostIdentifier),
+			disablePersistence: withNullAsUndefined(options.disablePersistence)
 		});
 	}
 
diff --git a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
index b9a34618336..fd3840e93ae 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
@@ -550,7 +550,7 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 	}
 
 	get persistentProcessId(): number | undefined { return this._processManager.persistentProcessId; }
-	get shouldPersist(): boolean { return this._processManager.shouldPersist; }
+	get shouldPersist(): boolean { return this._processManager.shouldPersist && !this.shellLaunchConfig.disablePersistence; }
 
 	/**
 	 * Create xterm.js instance and attach data listeners.
diff --git a/src/vs/workbench/services/extensions/common/extensionsApiProposals.ts b/src/vs/workbench/services/extensions/common/extensionsApiProposals.ts
index 2c734e5a0d2..0a1c1f9dcfb 100644
--- a/src/vs/workbench/services/extensions/common/extensionsApiProposals.ts
+++ b/src/vs/workbench/services/extensions/common/extensionsApiProposals.ts
@@ -49,6 +49,7 @@ export const allApiProposals = Object.freeze({
 	taskPresentationGroup: 'https://raw.githubusercontent.com/microsoft/vscode/main/src/vscode-dts/vscode.proposed.taskPresentationGroup.d.ts',
 	terminalDataWriteEvent: 'https://raw.githubusercontent.com/microsoft/vscode/main/src/vscode-dts/vscode.proposed.terminalDataWriteEvent.d.ts',
 	terminalDimensions: 'https://raw.githubusercontent.com/microsoft/vscode/main/src/vscode-dts/vscode.proposed.terminalDimensions.d.ts',
+	terminalDisablePersistence: 'https://raw.githubusercontent.com/microsoft/vscode/main/src/vscode-dts/vscode.proposed.terminalDisablePersistence.d.ts',
 	terminalNameChangeEvent: 'https://raw.githubusercontent.com/microsoft/vscode/main/src/vscode-dts/vscode.proposed.terminalNameChangeEvent.d.ts',
 	testCoverage: 'https://raw.githubusercontent.com/microsoft/vscode/main/src/vscode-dts/vscode.proposed.testCoverage.d.ts',
 	testObserver: 'https://raw.githubusercontent.com/microsoft/vscode/main/src/vscode-dts/vscode.proposed.testObserver.d.ts',
diff --git a/src/vscode-dts/vscode.proposed.terminalDisablePersistence.d.ts b/src/vscode-dts/vscode.proposed.terminalDisablePersistence.d.ts
new file mode 100644
index 00000000000..3c2f9d89e7f
--- /dev/null
+++ b/src/vscode-dts/vscode.proposed.terminalDisablePersistence.d.ts
@@ -0,0 +1,19 @@
+/*---------------------------------------------------------------------------------------------
+ *  Copyright (c) Microsoft Corporation. All rights reserved.
+ *  Licensed under the MIT License. See License.txt in the project root for license information.
+ *--------------------------------------------------------------------------------------------*/
+
+declare module 'vscode' {
+	export interface TerminalOptions {
+		/**
+		 * Opt-out of the default terminal persistence on restart and reload
+		 */
+		disablePersistence?: boolean;
+	}
+	export interface ExtensionTerminalOptions {
+		/**
+		 * Opt-out of the default terminal persistence on restart and reload
+		 */
+		disablePersistence?: boolean;
+	}
+}