diff --git a/pkgs/misc/vscode-extensions/mktplcExtRefToFetchArgs.nix b/pkgs/misc/vscode-extensions/mktplcExtRefToFetchArgs.nix
new file mode 100644
index 000000000000..21bdd0f6d7b1
--- /dev/null
+++ b/pkgs/misc/vscode-extensions/mktplcExtRefToFetchArgs.nix
@@ -0,0 +1,8 @@
+ext: 
+{
+  url = "https://${ext.publisher}.gallery.vsassets.io/_apis/public/gallery/publisher/${ext.publisher}/extension/${ext.name}/${ext.version}/assetbyname/Microsoft.VisualStudio.Services.VSIXPackage";
+  sha256 = ext.sha256;
+  # The `*.vsix` file is in the end a simple zip file. Change the extension
+  # so that existing `unzip` hooks takes care of the unpacking.
+  name = "${ext.publisher}-${ext.name}.zip";
+}
diff --git a/pkgs/misc/vscode-extensions/vscode-utils.nix b/pkgs/misc/vscode-extensions/vscode-utils.nix
index 5d446b025d7a..448bc81c917c 100644
--- a/pkgs/misc/vscode-extensions/vscode-utils.nix
+++ b/pkgs/misc/vscode-extensions/vscode-utils.nix
@@ -1,13 +1,6 @@
-{ stdenv, lib, fetchurl, unzip }:
+{ stdenv, lib, writeShellScriptBin, fetchurl, vscode, unzip }:
 
 let
-  mktplcExtRefToFetchArgs = ext: {
-    url = "https://${ext.publisher}.gallery.vsassets.io/_apis/public/gallery/publisher/${ext.publisher}/extension/${ext.name}/${ext.version}/assetbyname/Microsoft.VisualStudio.Services.VSIXPackage";
-    sha256 = ext.sha256;
-    # The `*.vsix` file is in the end a simple zip file. Change the extension
-    # so that existing `unzip` hooks takes care of the unpacking.
-    name = "${ext.publisher}-${ext.name}.zip";
-  };
 
   buildVscodeExtension = a@{
     name,
@@ -34,6 +27,7 @@ let
     buildInputs = [ unzip ] ++ buildInputs;
 
     installPhase = ''
+
       runHook preInstall
 
       mkdir -p "$out/$installPrefix"
@@ -44,9 +38,8 @@ let
 
   });
 
-
   fetchVsixFromVscodeMarketplace = mktplcExtRef:
-    fetchurl((mktplcExtRefToFetchArgs mktplcExtRef));
+    fetchurl((import ./mktplcExtRefToFetchArgs.nix mktplcExtRef));
 
   buildVscodeMarketplaceExtension = a@{
     name ? "",
@@ -79,10 +72,24 @@ let
   extensionsFromVscodeMarketplace = mktplcExtRefList:
     builtins.map extensionFromVscodeMarketplace mktplcExtRefList;
 
-in
+  vscodeWithConfiguration = (userParams : import ./vscodeWithConfiguration.nix {
+   inherit lib vscode extensionsFromVscodeMarketplace writeShellScriptBin;
+  } // userParams);
+
+  
+  vscodeExts2nix = (userParams : import ./vscodeExts2nix.nix {
+    inherit lib vscode;
+  } // userParams);
+
+  vscodeEnv = (userParams : import ./vscodeEnv.nix {
+    inherit lib writeShellScriptBin extensionsFromVscodeMarketplace vscode;
+  } // userParams );
+
+in 
 
 {
   inherit fetchVsixFromVscodeMarketplace buildVscodeExtension
           buildVscodeMarketplaceExtension extensionFromVscodeMarketplace
-          extensionsFromVscodeMarketplace;
+          extensionsFromVscodeMarketplace
+          vscodeWithConfiguration vscodeExts2nix vscodeEnv;
 }
diff --git a/pkgs/misc/vscode-extensions/vscodeEnv.nix b/pkgs/misc/vscode-extensions/vscodeEnv.nix
new file mode 100644
index 000000000000..7c1bb255b850
--- /dev/null
+++ b/pkgs/misc/vscode-extensions/vscodeEnv.nix
@@ -0,0 +1,40 @@
+#use vscodeWithConfiguration and vscodeExts2nix to create vscode exetuable that when exits(vscode) will update the mutable extension file, which is imported when getting evaluated by nix.
+{ pkgs                            ? import <nixpkgs> {}
+, lib                             ? pkgs.lib
+, writeShellScriptBin             ? pkgs.writeShellScriptBin
+, extensionsFromVscodeMarketplace ? pkgs.vscode-utils.extensionsFromVscodeMarketplace
+
+##User input
+
+, nixExtensions                   ? []
+# if file exists will use it and import the extensions in it into this dervation else will use empty extensions list
+# this file will be created/updated by vscodeExts2nix when vscode exists
+, mutableExtensionsFile           ? ./extensions.nix
+, vscodeExtsFolderName            ? ".vscode-exts"
+, vscode                          ? pkgs.vscode
+}:
+let  
+  mutableExtensionsFilePath = builtins.toPath mutableExtensionsFile;
+  mutableExtensions = if builtins.pathExists mutableExtensionsFile 
+                      then import mutableExtensionsFilePath else [];
+  vscodeWithConfiguration = import ./vscodeWithConfiguration.nix { 
+    inherit lib writeShellScriptBin vscode extensionsFromVscodeMarketplace 
+    nixExtensions mutableExtensions vscodeExtsFolderName;
+  };
+
+  vscodeExts2nix = import ./vscodeExts2nix.nix { 
+    inherit lib writeShellScriptBin;
+    extensionsToIgnore = nixExtensions;
+    extensions = mutableExtensions; 
+    vscode = vscodeWithConfiguration;
+  };
+  code = writeShellScriptBin "code" ''
+    ${vscodeWithConfiguration}/bin/code --wait "$@" 
+    echo 'running vscodeExts2nix to update ${mutableExtensionsFilePath}...'
+    ${vscodeExts2nix}/bin/vscodeExts2nix > ${mutableExtensionsFilePath}
+  '';
+in
+pkgs.buildEnv {
+  name = "vscodeEnv";
+  paths = [ code vscodeExts2nix ];
+}
diff --git a/pkgs/misc/vscode-extensions/vscodeExts2nix.nix b/pkgs/misc/vscode-extensions/vscodeExts2nix.nix
new file mode 100644
index 000000000000..12fe09a2425c
--- /dev/null
+++ b/pkgs/misc/vscode-extensions/vscodeExts2nix.nix
@@ -0,0 +1,44 @@
+# based on the passed vscode will stdout a nix expression with the installed vscode extensions 
+{ pkgs                ? import <nixpkgs>{}
+, lib                 ? pkgs.lib
+, vscode              ? pkgs.vscode
+, writeShellScriptBin ? pkgs.writeShellScriptBin
+
+##User input
+
+, extensionsToIgnore  ? []
+# will use those extensions to get sha256 if still exists when executed.
+, extensions          ? [] 
+}:
+let 
+  mktplcExtRefToFetchArgs = import ./mktplcExtRefToFetchArgs.nix;
+in
+writeShellScriptBin "vscodeExts2nix" ''
+  echo '[' 
+
+  for line in $(${vscode}/bin/code --list-extensions --show-versions \
+    ${lib.optionalString (extensionsToIgnore != []) ''
+      | grep -v -i '^\(${lib.concatMapStringsSep "\\|" (e : ''${e.publisher}.${e.name}'') extensionsToIgnore}\)' 
+    ''}
+  ) ; do
+    [[ $line =~ ([^.]*)\.([^@]*)@(.*) ]]
+    name=''${BASH_REMATCH[2]}
+    publisher=''${BASH_REMATCH[1]}
+    version=''${BASH_REMATCH[3]}
+
+    extensions="${lib.concatMapStringsSep "." (e : ''${e.publisher}${e.name}@${e.sha256}'') extensions}"
+    reCurrentExt=$publisher$name"@([^.]*)"
+    if [[ $extensions =~ $reCurrentExt ]]; then
+      sha256=''${BASH_REMATCH[1]}
+    else
+      sha256=$(
+        nix-prefetch-url "${(mktplcExtRefToFetchArgs {publisher = ''"$publisher"''; name = ''"$name"''; version = ''"$version"'';}).url}" 2> /dev/null
+      )
+    fi
+
+    echo "{ name = \"''${name}\"; publisher = \"''${publisher}\"; version = \"''${version}\"; sha256 = \"''${sha256}\";  }"
+  done
+
+
+  echo ']'
+''
diff --git a/pkgs/misc/vscode-extensions/vscodeWithConfiguration.nix b/pkgs/misc/vscode-extensions/vscodeWithConfiguration.nix
new file mode 100644
index 000000000000..11282865c7c5
--- /dev/null
+++ b/pkgs/misc/vscode-extensions/vscodeWithConfiguration.nix
@@ -0,0 +1,39 @@
+# wrapper over vscode to control extensions per project (extensions folder will be created in execution path)
+{ pkgs                            ? import <nixpkgs> {}
+, lib                             ? pkgs.lib
+, writeShellScriptBin             ? pkgs.writeShellScriptBin
+, extensionsFromVscodeMarketplace ? pkgs.vscode-utils.extensionsFromVscodeMarketplace
+
+##User input
+
+, vscode                          ? pkgs.vscode
+# extensions to be symlinked into the project's extensions folder
+, nixExtensions                   ? []
+# extensions to be copied into the project's extensions folder
+, mutableExtensions               ? []
+, vscodeExtsFolderName            ? ".vscode-exts"
+}:
+let 
+  nixExtsDrvs = extensionsFromVscodeMarketplace nixExtensions;
+  mutExtsDrvs = extensionsFromVscodeMarketplace mutableExtensions;
+
+  #removed not defined extensions
+  rmExtensions =  lib.optionalString (nixExtensions++mutableExtensions != []) ''
+    find ${vscodeExtsFolderName} -mindepth 1 -maxdepth 1 ${lib.concatMapStringsSep " " (e : ''! -iname ${e.publisher}.${e.name}'') (nixExtensions++mutableExtensions)} -exec sudo rm -rf {} \;
+  '';
+  #copy mutable extension out of the nix store
+  cpExtensions = ''
+    ${lib.concatMapStringsSep "\n" (e : ''ln -sfn ${e}/share/vscode/extensions/* ${vscodeExtsFolderName}/'') nixExtsDrvs}
+    ${lib.concatMapStringsSep "\n" (e : ''
+      cp -a ${e}/share/vscode/extensions/${e.vscodeExtUniqueId} ${vscodeExtsFolderName}/${e.vscodeExtUniqueId}-${(lib.findSingle (ext: ''${ext.publisher}.${ext.name}'' == e.vscodeExtUniqueId) "" "m" mutableExtensions ).version}
+      '') mutExtsDrvs} 
+  '';
+in
+  writeShellScriptBin "code" ''
+    if ! [[ "$@" =~ "--list-extension" ]]; then 
+      mkdir -p ${vscodeExtsFolderName} 
+      ${rmExtensions}
+      ${cpExtensions}
+    fi
+    ${vscode}/bin/code --extensions-dir ${vscodeExtsFolderName} "$@"
+  ''