diff --git a/extensions/sql-database-projects/.vscode/launch.json b/extensions/sql-database-projects/.vscode/launch.json
index a9dfe70099..2233e3b04d 100644
--- a/extensions/sql-database-projects/.vscode/launch.json
+++ b/extensions/sql-database-projects/.vscode/launch.json
@@ -4,14 +4,11 @@
     // For more information, visit: https://go.microsoft.com/fwlink/?linkid=830387
     "version": "0.2.0",
     "configurations": [
-        // Note for debugging the VS Code version of the extension, currently you will need to modify
-        // the package.json and manually copy over the values from package.vscode.json into package.json
-        // (otherwise you'll get errors since other extensions depend on an extension with the name
-        //  data-workspace-vscode, not data-workspace)
+        // This task is meant for running the VS Code version of the extension. See VSCODE_DEVELOPMENT.md for more information
         {
             "type": "extensionHost",
             "request": "launch",
-            "name": "Launch Extension",
+            "name": "Launch Extension in VS Code",
             "runtimeExecutable": "${execPath}",
             "args": [
                 "--extensionDevelopmentPath=${workspaceFolder}"
@@ -21,4 +18,4 @@
             ]
         }
     ]
-}
\ No newline at end of file
+}
diff --git a/extensions/sql-database-projects/VSCODE_DEVELOPMENT.md b/extensions/sql-database-projects/VSCODE_DEVELOPMENT.md
new file mode 100644
index 0000000000..1ec36029f1
--- /dev/null
+++ b/extensions/sql-database-projects/VSCODE_DEVELOPMENT.md
@@ -0,0 +1,15 @@
+# VS Code Extension Development
+
+For working on the VS Code version of the package follow these steps for local development/testing.
+
+1. Copy the values from [package.vscode.json](./package.vscode.json) into [package.json](./package.json) (overwriting the properties with the same name there)
+2. Delete the following properties (this includes their arrays of values as well) from the `contributes/menus` property in the [package.json](./package.json)
+   * `objectExplorer/item/context`
+   * `dataExplorer/context`
+   * `dashboard/toolbar`
+3. Compile Azure Data Studio as normal and wait for it to finish
+4. Run `code <PathToAzureDataStudioSource>/extensions/sql-database-projects` from the command line to open a new VS Code instance at the `sql-database-projects` folder
+5. Run the `Launch Extension in VS Code` launch target from the `Run and Debug` view
+6. This should launch an `Extension Development Host` version of VS Code that is running the extension from sources.
+
+If you have the compilation running as watch then once you make changes you can just reload the window to pick up the latest changes being made.