diff --git a/src/vs/workbench/contrib/terminal/browser/links/terminalLinkManager.ts b/src/vs/workbench/contrib/terminal/browser/links/terminalLinkManager.ts
index 63946a0606d58aac2137d370d3c95f77d2a9fdc2..8543807feb9bdd037804a3ae3b8fba8a5d983a5f 100644
--- a/src/vs/workbench/contrib/terminal/browser/links/terminalLinkManager.ts
+++ b/src/vs/workbench/contrib/terminal/browser/links/terminalLinkManager.ts
@@ -38,7 +38,7 @@ const excludedPathCharactersClause = '[^\\0\\s!$`&*()\\[\\]+\'":;\\\\]';
 const unixLocalLinkClause = '((' + pathPrefix + '|(' + excludedPathCharactersClause + ')+)?(' + pathSeparatorClause + '(' + excludedPathCharactersClause + ')+)+)';
 
 // Valid absolute formats: C:, \\?\C: and \\?\%VAR%
-const winDrivePrefix = '(?:\\\\\\\\\\?\\\\)?([a-zA-Z]:|%)';
+const winDrivePrefix = '(?:\\\\\\\\\\?\\\\)?[a-zA-Z]:';
 const winPathPrefix = '(' + winDrivePrefix + '|\\.\\.?|\\~)';
 const winPathSeparatorClause = '(\\\\|\\/)';
 const winExcludedPathCharactersClause = '[^\\0<>\\?\\|\\/\\s!$`&*()\\[\\]+\'":;]';
@@ -465,7 +465,7 @@ export class TerminalLinkManager extends DisposableStore {
 		} else if (link.charAt(0) !== '/' && link.charAt(0) !== '~') {
 			// Resolve workspace path . | .. | <relative_path> -> <path>/. | <path>/.. | <path>/<relative_path>
 			if (this._processManager.os === OperatingSystem.Windows) {
-				if (!link.match('^' + winDrivePrefix)) {
+				if (!link.match('^' + winDrivePrefix) && !link.startsWith('\\\\?\\')) {
 					if (!this._processCwd) {
 						// Abort if no workspace is open
 						return null;
diff --git a/src/vs/workbench/contrib/terminal/test/browser/links/terminalLinkManager.test.ts b/src/vs/workbench/contrib/terminal/test/browser/links/terminalLinkManager.test.ts
index f8c340e22fb2e4197c802a096e132b521abd1741..b5e5a01c9a06c74c358f5d0ad1c29c56c43ef412 100644
--- a/src/vs/workbench/contrib/terminal/test/browser/links/terminalLinkManager.test.ts
+++ b/src/vs/workbench/contrib/terminal/test/browser/links/terminalLinkManager.test.ts
@@ -113,10 +113,10 @@ suite('Workbench - TerminalLinkHandler', () => {
 
 				if (lineNo) {
 					const lineColumnInfo: LineColumnInfo = terminalLinkHandler.extractLineColumnInfo(link);
-					assert.equal(lineColumnInfo.lineNumber, lineNo);
+					assert.equal(lineColumnInfo.lineNumber, lineNo, `For link ${link}, expected line number ${lineNo}, actual ${lineColumnInfo.lineNumber}`);
 
 					if (columnNo) {
-						assert.equal(lineColumnInfo.columnNumber, columnNo);
+						assert.equal(lineColumnInfo.columnNumber, columnNo, `For link ${link}, expected column number ${columnNo}, actual ${lineColumnInfo.columnNumber}`);
 					}
 				}
 			}
@@ -190,10 +190,10 @@ suite('Workbench - TerminalLinkHandler', () => {
 
 				if (lineNo) {
 					const lineColumnInfo: LineColumnInfo = terminalLinkHandler.extractLineColumnInfo(link);
-					assert.equal(lineColumnInfo.lineNumber, lineNo);
+					assert.equal(lineColumnInfo.lineNumber, lineNo, `For link ${link}, expected line number ${lineNo}, actual ${lineColumnInfo.lineNumber}`);
 
 					if (columnNo) {
-						assert.equal(lineColumnInfo.columnNumber, columnNo);
+						assert.equal(lineColumnInfo.columnNumber, columnNo, `For link ${link}, expected column number ${columnNo}, actual ${lineColumnInfo.columnNumber}`);
 					}
 				}
 			}