diff --git a/src/vs/vscode.d.ts b/src/vs/vscode.d.ts
index a2df3e091fe3be940da13a35d659c989c83e62a2..dcf0d7b8852a875ba894fdae4f671991f8f4fa02 100644
--- a/src/vs/vscode.d.ts
+++ b/src/vs/vscode.d.ts
@@ -4855,7 +4855,7 @@ declare module 'vscode' {
 		/**
 		 * Object with environment variables that will be added to the VS Code process.
 		 */
-		env?: { [key: string]: string };
+		env?: { [key: string]: string | null };
 	}
 
 	/**
diff --git a/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts b/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts
index 8c365585b2f503ffba85f9120ba7732cf5ae7704..7916f16cc4015e95c28cabb4f9dfb1c854f9fc6d 100644
--- a/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts
+++ b/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts
@@ -778,7 +778,12 @@ export class TerminalInstance implements ITerminalInstance {
 		const env = TerminalInstance._cloneEnv(parentEnv);
 		if (shell.env) {
 			Object.keys(shell.env).forEach((key) => {
-				env[key] = shell.env[key];
+				const value = shell.env[key];
+				if (typeof value === 'string') {
+					env[key] = value;
+				} else {
+					delete env[key];
+				}
 			});
 		}