diff --git a/src/vs/workbench/contrib/terminalContrib/links/browser/terminalLinkResolver.ts b/src/vs/workbench/contrib/terminalContrib/links/browser/terminalLinkResolver.ts
index 6090c628f8a..c3315837a51 100644
--- a/src/vs/workbench/contrib/terminalContrib/links/browser/terminalLinkResolver.ts
+++ b/src/vs/workbench/contrib/terminalContrib/links/browser/terminalLinkResolver.ts
@@ -25,6 +25,14 @@ export class TerminalLinkResolver implements ITerminalLinkResolver {
 	}
 
 	async resolveLink(processManager: Pick<ITerminalProcessManager, 'initialCwd' | 'os' | 'remoteAuthority' | 'userHome'> & { backend?: Pick<ITerminalBackend, 'getWslPath'> }, link: string, uri?: URI): Promise<ResolvedLink> {
+		// Correct scheme and authority for remote terminals
+		if (uri && uri.scheme === Schemas.file && processManager.remoteAuthority) {
+			uri = uri.with({
+				scheme: Schemas.vscodeRemote,
+				authority: processManager.remoteAuthority
+			});
+		}
+
 		// Get the link cache
 		let cache = this._resolvedLinkCaches.get(processManager.remoteAuthority ?? '');
 		if (!cache) {