diff --git a/src/client/testing/common/debugLauncher.ts b/src/client/testing/common/debugLauncher.ts
index aef1a9fd9197..cd4b7181f447 100644
--- a/src/client/testing/common/debugLauncher.ts
+++ b/src/client/testing/common/debugLauncher.ts
@@ -1,6 +1,6 @@
 import { inject, injectable, named } from 'inversify';
 import * as path from 'path';
-import { DebugConfiguration, l10n, Uri, WorkspaceFolder } from 'vscode';
+import { DebugConfiguration, l10n, Uri, WorkspaceFolder, DebugSession } from 'vscode';
 import { IApplicationShell, IDebugService } from '../../common/application/types';
 import { EXTENSION_ROOT_DIR } from '../../common/constants';
 import * as internalScripts from '../../common/process/internal/scripts';
@@ -9,7 +9,7 @@ import { DebuggerTypeName, PythonDebuggerTypeName } from '../../debugger/constan
 import { IDebugConfigurationResolver } from '../../debugger/extension/configuration/types';
 import { DebugPurpose, LaunchRequestArguments } from '../../debugger/types';
 import { IServiceContainer } from '../../ioc/types';
-import { traceError } from '../../logging';
+import { traceError, traceVerbose } from '../../logging';
 import { TestProvider } from '../types';
 import { ITestDebugLauncher, LaunchOptions } from './types';
 import { getConfigurationsForWorkspace } from '../../debugger/extension/configuration/launch.json/launchJsonReader';
@@ -34,12 +34,20 @@ export class DebugLauncher implements ITestDebugLauncher {
 
     public async launchDebugger(options: LaunchOptions, callback?: () => void): Promise<void> {
         const deferred = createDeferred<void>();
+        let hasCallbackBeenCalled = false;
         if (options.token && options.token.isCancellationRequested) {
+            hasCallbackBeenCalled = true;
             return undefined;
             deferred.resolve();
             callback?.();
         }
 
+        options.token?.onCancellationRequested(() => {
+            deferred.resolve();
+            callback?.();
+            hasCallbackBeenCalled = true;
+        });
+
         const workspaceFolder = DebugLauncher.resolveWorkspaceFolder(options.cwd);
         const launchArgs = await this.getLaunchArgs(
             options,
@@ -48,11 +56,23 @@ export class DebugLauncher implements ITestDebugLauncher {
         );
         const debugManager = this.serviceContainer.get<IDebugService>(IDebugService);
 
-        debugManager.onDidTerminateDebugSession(() => {
-            deferred.resolve();
-            callback?.();
+        let activatedDebugSession: DebugSession | undefined;
+        debugManager.startDebugging(workspaceFolder, launchArgs).then(() => {
+            // Save the debug session after it is started so we can check if it is the one that was terminated.
+            activatedDebugSession = debugManager.activeDebugSession;
+        });
+        debugManager.onDidTerminateDebugSession((session) => {
+            traceVerbose(`Debug session terminated. sessionId: ${session.id}`);
+            // Only resolve no callback has been made and the session is the one that was started.
+            if (
+                !hasCallbackBeenCalled &&
+                activatedDebugSession !== undefined &&
+                session.id === activatedDebugSession?.id
+            ) {
+                deferred.resolve();
+                callback?.();
+            }
         });
-        debugManager.startDebugging(workspaceFolder, launchArgs);
         return deferred.promise;
     }
 
diff --git a/src/client/testing/testController/controller.ts b/src/client/testing/testController/controller.ts
index b55eaa446018..58edfb059666 100644
--- a/src/client/testing/testController/controller.ts
+++ b/src/client/testing/testController/controller.ts
@@ -378,7 +378,6 @@ export class PythonTestController implements ITestController, IExtensionSingleAc
             `Running Tests for Workspace(s): ${workspaces.map((w) => w.uri.fsPath).join(';')}`,
             true,
         );
-
         const dispose = token.onCancellationRequested(() => {
             runInstance.appendOutput(`\nRun instance cancelled.\r\n`);
             runInstance.end();
diff --git a/src/test/testing/common/debugLauncher.unit.test.ts b/src/test/testing/common/debugLauncher.unit.test.ts
index 31ba761eb946..bdcb7b63762c 100644
--- a/src/test/testing/common/debugLauncher.unit.test.ts
+++ b/src/test/testing/common/debugLauncher.unit.test.ts
@@ -10,7 +10,7 @@ import * as sinon from 'sinon';
 import * as TypeMoq from 'typemoq';
 import * as fs from 'fs-extra';
 import * as workspaceApis from '../../../client/common/vscodeApis/workspaceApis';
-import { CancellationTokenSource, DebugConfiguration, Uri, WorkspaceFolder } from 'vscode';
+import { CancellationTokenSource, DebugConfiguration, DebugSession, Uri, WorkspaceFolder } from 'vscode';
 import { IInvalidPythonPathInDebuggerService } from '../../../client/application/diagnostics/types';
 import { IApplicationShell, IDebugService } from '../../../client/common/application/types';
 import { EXTENSION_ROOT_DIR } from '../../../client/common/constants';
@@ -30,6 +30,7 @@ import { TestProvider } from '../../../client/testing/types';
 import { isOs, OSType } from '../../common';
 import { IEnvironmentActivationService } from '../../../client/interpreter/activation/types';
 import * as util from '../../../client/testing/testController/common/utils';
+import { createDeferred } from '../../../client/common/utils/async';
 
 use(chaiAsPromised);
 
@@ -125,17 +126,31 @@ suite('Unit Tests - Debug Launcher', () => {
             .setup((x) => x.getEnvironmentVariables(TypeMoq.It.isAny(), TypeMoq.It.isAny()))
             .returns(() => Promise.resolve(expected.env));
 
+        const deferred = createDeferred<void>();
+
         debugService
             .setup((d) => d.startDebugging(TypeMoq.It.isValue(workspaceFolder), TypeMoq.It.isValue(expected)))
             .returns((_wspc: WorkspaceFolder, _expectedParam: DebugConfiguration) => {
+                deferred.resolve();
                 return Promise.resolve(undefined as any);
-            })
+            });
+
+        // create a fake debug session that the debug service will return on terminate
+        const fakeDebugSession = TypeMoq.Mock.ofType<DebugSession>();
+        fakeDebugSession.setup((ds) => ds.id).returns(() => 'id-val');
+        const debugSessionInstance = fakeDebugSession.object;
+
+        debugService
+            .setup((d) => d.activeDebugSession)
+            .returns(() => debugSessionInstance)
             .verifiable(TypeMoq.Times.once());
 
         debugService
             .setup((d) => d.onDidTerminateDebugSession(TypeMoq.It.isAny()))
             .returns((callback) => {
-                callback();
+                deferred.promise.then(() => {
+                    callback(debugSessionInstance);
+                });
                 return undefined as any;
             })
             .verifiable(TypeMoq.Times.once());