diff --git a/CHANGELOG.md b/CHANGELOG.md
index f07f13fb..8725a127 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,6 +4,8 @@
 
 - Update `/openDevContainer` to support all dev container features when hostPath
   and configFile are provided.
+- Add `coder.disableUpdateNotifications` setting to disable workspace template
+  update notifications.
 
 ## [v1.9.2](https://github.com/coder/vscode-coder/releases/tag/v1.9.2) 2025-06-25
 
diff --git a/package.json b/package.json
index e3e7556a..7896243e 100644
--- a/package.json
+++ b/package.json
@@ -109,6 +109,11 @@
 					"markdownDescription": "Automatically log into the default URL when the extension is activated. coder.defaultUrl is preferred, otherwise the CODER_URL environment variable will be used. This setting has no effect if neither is set.",
 					"type": "boolean",
 					"default": false
+				},
+				"coder.disableUpdateNotifications": {
+					"markdownDescription": "Disable notifications when workspace template updates are available.",
+					"type": "boolean",
+					"default": false
 				}
 			}
 		},
diff --git a/src/workspaceMonitor.ts b/src/workspaceMonitor.ts
index 18df50b2..189d444a 100644
--- a/src/workspaceMonitor.ts
+++ b/src/workspaceMonitor.ts
@@ -171,7 +171,16 @@ export class WorkspaceMonitor implements vscode.Disposable {
 
 	private maybeNotifyOutdated(workspace: Workspace) {
 		if (!this.notifiedOutdated && workspace.outdated) {
+			// Check if update notifications are disabled
+			const disableNotifications = vscode.workspace
+				.getConfiguration("coder")
+				.get<boolean>("disableUpdateNotifications", false);
+			if (disableNotifications) {
+				return;
+			}
+
 			this.notifiedOutdated = true;
+
 			this.restClient
 				.getTemplate(workspace.template_id)
 				.then((template) => {