diff --git a/pkgs/applications/editors/vscode/extensions/default.nix b/pkgs/applications/editors/vscode/extensions/default.nix
index cd13ad2fa55d..8cfee23f25b2 100644
--- a/pkgs/applications/editors/vscode/extensions/default.nix
+++ b/pkgs/applications/editors/vscode/extensions/default.nix
@@ -3070,20 +3070,7 @@ let
         };
       };
 
-      mkhl.direnv = buildVscodeMarketplaceExtension {
-        mktplcRef = {
-          publisher = "mkhl";
-          name = "direnv";
-          version = "0.17.0";
-          hash = "sha256-9sFcfTMeLBGw2ET1snqQ6Uk//D/vcD9AVsZfnUNrWNg=";
-        };
-        meta = {
-          description = "direnv support for Visual Studio Code";
-          license = lib.licenses.bsd0;
-          downloadPage = "https://marketplace.visualstudio.com/items?itemName=mkhl.direnv";
-          maintainers = [ ];
-        };
-      };
+      mkhl.direnv = callPackage ./mkhl.direnv { };
 
       mkhl.shfmt = callPackage ./mkhl.shfmt { };
 
diff --git a/pkgs/applications/editors/vscode/extensions/mkhl.direnv/default.nix b/pkgs/applications/editors/vscode/extensions/mkhl.direnv/default.nix
new file mode 100644
index 000000000000..1eb24cbe4ae7
--- /dev/null
+++ b/pkgs/applications/editors/vscode/extensions/mkhl.direnv/default.nix
@@ -0,0 +1,30 @@
+{
+  lib,
+  vscode-utils,
+  jq,
+  moreutils,
+  direnv,
+}:
+
+vscode-utils.buildVscodeMarketplaceExtension {
+  mktplcRef = {
+    publisher = "mkhl";
+    name = "direnv";
+    version = "0.17.0";
+    hash = "sha256-9sFcfTMeLBGw2ET1snqQ6Uk//D/vcD9AVsZfnUNrWNg=";
+  };
+  nativeBuildInputs = [
+    jq
+    moreutils
+  ];
+  postInstall = ''
+    cd "$out/$installPrefix"
+    jq -e '.contributes.configuration.properties."direnv.path.executable".default = "${lib.getExe direnv}"' package.json | sponge package.json
+  '';
+  meta = {
+    description = "direnv support for Visual Studio Code";
+    license = lib.licenses.bsd0;
+    downloadPage = "https://marketplace.visualstudio.com/items?itemName=mkhl.direnv";
+    maintainers = [ ];
+  };
+}