diff --git a/package.json b/package.json
index f65cde26af..015eaedcd2 100644
--- a/package.json
+++ b/package.json
@@ -1043,6 +1043,11 @@
             "default": false,
             "markdownDescription": "Do not show the startup banner in the PowerShell Extension Terminal."
           },
+          "powershell.suppressTerminalStoppedNotification": {
+            "type": "boolean",
+            "default": false,
+            "markdownDescription": "Do not show a notification when the PowerShell Extension Terminal has stopped."
+          },
           "powershell.integratedConsole.showOnStartup": {
             "type": "boolean",
             "default": true,
diff --git a/src/session.ts b/src/session.ts
index b5b201a601..2908f6d27f 100644
--- a/src/session.ts
+++ b/src/session.ts
@@ -980,7 +980,8 @@ export class SessionManager implements Middleware {
                     return {
                         action: CloseAction.DoNotRestart,
                         message:
-                            "Connection to PowerShell Editor Services (the Extension Terminal) was closed. See below prompt to restart!",
+                            "Connection to PowerShell Editor Services (the Extension Terminal) was closed.",
+                        handled: true,
                     };
                 },
             },
@@ -1158,6 +1159,16 @@ Type 'help' to get help.
     }
 
     private async promptForRestart(): Promise<void> {
+        // Check user configuration before showing notification
+        const suppressNotification =
+            vscode.workspace
+                .getConfiguration("powershell")
+                .get<boolean>("suppressTerminalStoppedNotification") ?? false;
+
+        if (suppressNotification) {
+            return;
+        }
+
         await this.logger.writeAndShowErrorWithActions(
             "The PowerShell Extension Terminal has stopped, would you like to restart it? IntelliSense and other features will not work without it!",
             [
@@ -1171,6 +1182,17 @@ Type 'help' to get help.
                     prompt: "No",
                     action: undefined,
                 },
+                {
+                    prompt: "Don't Show Again",
+                    action: async (): Promise<void> => {
+                        await changeSetting(
+                            "suppressTerminalStoppedNotification",
+                            true,
+                            true,
+                            this.logger,
+                        );
+                    },
+                },
             ],
         );
     }