diff --git a/.yarn/versions/c309a37a.yml b/.yarn/versions/c309a37a.yml
new file mode 100644
index 000000000000..55d8fd5f41f4
--- /dev/null
+++ b/.yarn/versions/c309a37a.yml
@@ -0,0 +1,2 @@
+releases:
+  "@yarnpkg/sdks": major
diff --git a/packages/yarnpkg-sdks/sources/sdkUtils.ts b/packages/yarnpkg-sdks/sources/sdkUtils.ts
index 167091f3f3b8..ef4a1730ac0e 100644
--- a/packages/yarnpkg-sdks/sources/sdkUtils.ts
+++ b/packages/yarnpkg-sdks/sources/sdkUtils.ts
@@ -21,3 +21,25 @@ export const addSettingWorkspaceConfiguration = async (pnpApi: PnpApi, relativeF
     automaticNewlines: true,
   });
 };
+
+export const removeSettingWorkspaceConfiguration = async (pnpApi: PnpApi, relativeFileName: PortablePath, keysToRemove: Array<string>) => {
+  const topLevelInformation = pnpApi.getPackageInformation(pnpApi.topLevel)!;
+  const projectRoot = npath.toPortablePath(topLevelInformation.packageLocation);
+
+  const filePath = ppath.join(projectRoot, relativeFileName);
+
+  if (!await xfs.existsPromise(filePath))
+    return;
+
+  const content = await xfs.readFilePromise(filePath, `utf8`);
+  const data = CJSON.parse(content);
+
+  for (const key of keysToRemove)
+    delete data[key];
+
+  const patched = `${CJSON.stringify(data, null, 2)}\n`;
+
+  await xfs.changeFilePromise(filePath, patched, {
+    automaticNewlines: true,
+  });
+};
diff --git a/packages/yarnpkg-sdks/sources/sdks/vscode.ts b/packages/yarnpkg-sdks/sources/sdks/vscode.ts
index b47880c59fe9..a0a48689a7f9 100644
--- a/packages/yarnpkg-sdks/sources/sdks/vscode.ts
+++ b/packages/yarnpkg-sdks/sources/sdks/vscode.ts
@@ -14,6 +14,11 @@ export const addVSCodeWorkspaceConfiguration = async (pnpApi: PnpApi, type: VSCo
   await sdkUtils.addSettingWorkspaceConfiguration(pnpApi, relativeFilePath, patch);
 };
 
+export const removeVSCodeWorkspaceConfiguration = async (pnpApi: PnpApi, type: VSCodeConfiguration, patch: any) => {
+  const relativeFilePath = `.vscode/${type}` as PortablePath;
+  await sdkUtils.removeSettingWorkspaceConfiguration(pnpApi, relativeFilePath, patch);
+};
+
 export const generateDefaultWrapper: GenerateDefaultWrapper = async (pnpApi: PnpApi) => {
   await addVSCodeWorkspaceConfiguration(pnpApi, VSCodeConfiguration.settings, {
     [`search.exclude`]: {
@@ -94,15 +99,21 @@ export const generateRelayCompilerWrapper: GenerateIntegrationWrapper = async (p
 };
 
 export const generateTypescriptWrapper: GenerateIntegrationWrapper = async (pnpApi: PnpApi, target: PortablePath, wrapper: Wrapper) => {
+  // Remove old TypeScript settings if present to prevent deprecation warnings from vscode
+  await removeVSCodeWorkspaceConfiguration(pnpApi, VSCodeConfiguration.settings, [
+    `typescript.tsdk`,
+    `typescript.enablePromptUseWorkspaceTsdk`,
+  ]);
+
   await addVSCodeWorkspaceConfiguration(pnpApi, VSCodeConfiguration.settings, {
-    [`typescript.tsdk`]: npath.fromPortablePath(
+    [`js/ts.tsdk.path`]: npath.fromPortablePath(
       ppath.dirname(
         wrapper.getProjectPathTo(
           `lib/tsserver.js` as PortablePath,
         ),
       ),
     ),
-    [`typescript.enablePromptUseWorkspaceTsdk`]: true,
+    [`js/ts.tsdk.promptToUseWorkspaceVersion`]: true,
   });
 };