diff --git a/src/vs/platform/terminal/common/capabilities/commandDetectionCapability.ts b/src/vs/platform/terminal/common/capabilities/commandDetectionCapability.ts
index d2413b5897e..00d03a94a11 100644
--- a/src/vs/platform/terminal/common/capabilities/commandDetectionCapability.ts
+++ b/src/vs/platform/terminal/common/capabilities/commandDetectionCapability.ts
@@ -381,14 +381,11 @@ export class CommandDetectionCapability extends Disposable implements ICommandDe
 
 		if (newCommand) {
 			this._commands.push(newCommand);
-			this._commitCommandFinished = new RunOnceScheduler(() => {
-				this._onBeforeCommandFinished.fire(newCommand);
-				if (!this._currentCommand.isInvalid) {
-					this._logService.debug('CommandDetectionCapability#onCommandFinished', newCommand);
-					this._onCommandFinished.fire(newCommand);
-				}
-			}, 50);
-			this._commitCommandFinished.schedule();
+			this._onBeforeCommandFinished.fire(newCommand);
+			if (!this._currentCommand.isInvalid) {
+				this._logService.debug('CommandDetectionCapability#onCommandFinished', newCommand);
+				this._onCommandFinished.fire(newCommand);
+			}
 		}
 		this._currentCommand = new PartialTerminalCommand(this._terminal);
 		this._handleCommandStartOptions = undefined;
diff --git a/src/vs/workbench/api/browser/mainThreadTerminalShellIntegration.ts b/src/vs/workbench/api/browser/mainThreadTerminalShellIntegration.ts
index ff9d34a7ced..44cc83b1116 100644
--- a/src/vs/workbench/api/browser/mainThreadTerminalShellIntegration.ts
+++ b/src/vs/workbench/api/browser/mainThreadTerminalShellIntegration.ts
@@ -90,7 +90,9 @@ export class MainThreadTerminalShellIntegration extends Disposable implements Ma
 			// TerminalShellExecution.createDataStream
 			// Debounce events to reduce the message count - when this listener is disposed the events will be flushed
 			instanceDataListeners.get(instanceId)?.dispose();
-			instanceDataListeners.set(instanceId, Event.accumulate(e.instance.onData, 50, this._store)(events => this._proxy.$shellExecutionData(instanceId, events.join(''))));
+			instanceDataListeners.set(instanceId, Event.accumulate(e.instance.onData, 50, this._store)(events => {
+				this._proxy.$shellExecutionData(instanceId, events.join(''));
+			}));
 		}));
 
 		// onDidEndTerminalShellExecution
@@ -99,10 +101,10 @@ export class MainThreadTerminalShellIntegration extends Disposable implements Ma
 			currentCommand = undefined;
 			const instanceId = e.instance.instanceId;
 			instanceDataListeners.get(instanceId)?.dispose();
-			// Send end in a microtask to ensure the data events are sent first
-			setTimeout(() => {
-				this._proxy.$shellExecutionEnd(instanceId, e.data.command, convertToExtHostCommandLineConfidence(e.data), e.data.isTrusted, e.data.exitCode);
-			});
+			// Shell integration C (executed) and D (command finished) sequences should always be in
+			// their own events, so send this immediately. This means that the D sequence will not
+			// be included as it's currently being parsed when the command finished event fires.
+			this._proxy.$shellExecutionEnd(instanceId, e.data.command, convertToExtHostCommandLineConfidence(e.data), e.data.isTrusted, e.data.exitCode);
 		}));
 
 		// Clean up after dispose
diff --git a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
index 3da24081cb8..f66318637f6 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
@@ -1522,18 +1522,23 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 	}
 
 	private _onProcessData(ev: IProcessDataEvent): void {
-		// Ensure events are split by SI command execute sequence to ensure the output of the
-		// command can be read by extensions. This must be done here as xterm.js does not currently
-		// have a listener for when individual data events are parsed, only `onWriteParsed` which
-		// fires when the write buffer is flushed.
-		const execIndex = ev.data.indexOf('\x1b]633;C\x07');
-		if (execIndex !== -1) {
+		// Ensure events are split by SI command execute and command finished sequence to ensure the
+		// output of the command can be read by extensions and the output of the command is of a
+		// consistent form respectively. This must be done here as xterm.js does not currently have
+		// a listener for when individual data events are parsed, only `onWriteParsed` which fires
+		// when the write buffer is flushed.
+		const match = ev.data.match(/(?<seq>\x1b][16]33;(?:C|D(?:;\d+)?)\x07)/);
+		const index = match?.index;
+		if (match?.groups?.seq && index !== undefined) {
+			const seq = match?.groups?.seq;
 			if (ev.trackCommit) {
-				this._writeProcessData(ev.data.substring(0, execIndex + '\x1b]633;C\x07'.length));
-				ev.writePromise = new Promise<void>(r => this._writeProcessData(ev.data.substring(execIndex + '\x1b]633;C\x07'.length), r));
+				this._writeProcessData(ev.data.substring(0, index));
+				this._writeProcessData(seq);
+				ev.writePromise = new Promise<void>(r => this._writeProcessData(ev.data.substring(index + seq.length), r));
 			} else {
-				this._writeProcessData(ev.data.substring(0, execIndex + '\x1b]633;C\x07'.length));
-				this._writeProcessData(ev.data.substring(execIndex + '\x1b]633;C\x07'.length));
+				this._writeProcessData(ev.data.substring(0, index));
+				this._writeProcessData(seq);
+				this._writeProcessData(ev.data.substring(index + seq.length));
 			}
 		} else {
 			if (ev.trackCommit) {