diff --git a/build/darwin/create-universal-app.js b/build/darwin/create-universal-app.js
index 33876e7f4a..a76d9df018 100644
--- a/build/darwin/create-universal-app.js
+++ b/build/darwin/create-universal-app.js
@@ -28,17 +28,16 @@ async function main() {
     const outAppPath = path.join(buildDir, `azuredatastudio-darwin-${arch}`, appName); // {{SQL CARBON EDIT}} - CHANGE VSCode to azuredatastudio
     const productJsonPath = path.resolve(outAppPath, 'Contents', 'Resources', 'app', 'product.json');
     // {{SQL CARBON EDIT}}
-    // Current STS arm64 builds doesn't work on osx-arm64, we need to use the x64 version of STS on osx-arm64 until the issue is fixed.
-    // Tracked by: https://github.com/microsoft/azuredatastudio/issues/20775
-    // makeUniversalApp function will complain if the x64 ADS and arm64 ADS have the same STS binaries, to workaround the issue, we need
-    // to delete STS from both of them and then copy it to the universal app.
+    // STS binaries for x64 and arm64 have different file count and cannot be combined
+    // Remove them from the package before the makeUniversalApp step and copy them to the universal package after it.
     const stsPath = '/Contents/Resources/app/extensions/mssql/sqltoolsservice';
     const tempSTSDir = path.join(buildDir, 'sqltoolsservice');
     const x64STSDir = path.join(x64AppPath, stsPath);
     const arm64STSDir = path.join(arm64AppPath, stsPath);
     const targetSTSDirs = [x64STSDir, arm64STSDir];
-    // backup the x64 STS to a temporary directory, later it will be copied to the universal app directory.
+    // backup the STS folders to a temporary directory, later they will be copied to the universal app directory.
     await fs.copy(x64STSDir, tempSTSDir);
+    await fs.copy(arm64STSDir, tempSTSDir);
     // delete STS directories from both x64 ADS and arm64 ADS.
     console.debug(`Removing SqlToolsService folders.`);
     targetSTSDirs.forEach(async (dir) => {
@@ -89,7 +88,8 @@ async function main() {
     }
     // {{SQL CARBON EDIT}}
     console.debug(`Copying SqlToolsService to the universal app folder.`);
-    await fs.copy(tempSTSDir, path.join(outAppPath, stsPath), { overwrite: true });
+    await fs.copy(path.join(tempSTSDir, 'OSX'), path.join(outAppPath, stsPath, 'OSX'), { overwrite: true });
+    await fs.copy(path.join(tempSTSDir, 'OSX_ARM64'), path.join(outAppPath, stsPath, 'OSX_ARM64'), { overwrite: true });
 }
 if (require.main === module) {
     main().catch(err => {
diff --git a/build/darwin/create-universal-app.ts b/build/darwin/create-universal-app.ts
index 09c662cb1b..66c935b2c6 100644
--- a/build/darwin/create-universal-app.ts
+++ b/build/darwin/create-universal-app.ts
@@ -34,17 +34,16 @@ async function main() {
 	const productJsonPath = path.resolve(outAppPath, 'Contents', 'Resources', 'app', 'product.json');
 
 	// {{SQL CARBON EDIT}}
-	// Current STS arm64 builds doesn't work on osx-arm64, we need to use the x64 version of STS on osx-arm64 until the issue is fixed.
-	// Tracked by: https://github.com/microsoft/azuredatastudio/issues/20775
-	// makeUniversalApp function will complain if the x64 ADS and arm64 ADS have the same STS binaries, to workaround the issue, we need
-	// to delete STS from both of them and then copy it to the universal app.
+	// STS binaries for x64 and arm64 have different file count and cannot be combined
+	// Remove them from the package before the makeUniversalApp step and copy them to the universal package after it.
 	const stsPath = '/Contents/Resources/app/extensions/mssql/sqltoolsservice';
 	const tempSTSDir = path.join(buildDir, 'sqltoolsservice');
 	const x64STSDir = path.join(x64AppPath, stsPath);
 	const arm64STSDir = path.join(arm64AppPath, stsPath);
 	const targetSTSDirs = [x64STSDir, arm64STSDir];
-	// backup the x64 STS to a temporary directory, later it will be copied to the universal app directory.
+	// backup the STS folders to a temporary directory, later they will be copied to the universal app directory.
 	await fs.copy(x64STSDir, tempSTSDir);
+	await fs.copy(arm64STSDir, tempSTSDir);
 	// delete STS directories from both x64 ADS and arm64 ADS.
 	console.debug(`Removing SqlToolsService folders.`);
 	targetSTSDirs.forEach(async dir => {
@@ -100,7 +99,8 @@ async function main() {
 
 	// {{SQL CARBON EDIT}}
 	console.debug(`Copying SqlToolsService to the universal app folder.`);
-	await fs.copy(tempSTSDir, path.join(outAppPath, stsPath), { overwrite: true });
+	await fs.copy(path.join(tempSTSDir, 'OSX'), path.join(outAppPath, stsPath, 'OSX'), { overwrite: true });
+	await fs.copy(path.join(tempSTSDir, 'OSX_ARM64'), path.join(outAppPath, stsPath, 'OSX_ARM64'), { overwrite: true });
 }
 
 if (require.main === module) {
diff --git a/extensions/admin-tool-ext-win/package.json b/extensions/admin-tool-ext-win/package.json
index 898c73a644..e9fab18e5d 100644
--- a/extensions/admin-tool-ext-win/package.json
+++ b/extensions/admin-tool-ext-win/package.json
@@ -108,7 +108,7 @@
   },
   "dependencies": {
     "@microsoft/ads-extension-telemetry": "^2.0.0",
-    "@microsoft/ads-service-downloader": "^1.2.0",
+    "@microsoft/ads-service-downloader": "^1.2.1",
     "vscode-nls": "^4.1.2"
   },
   "devDependencies": {
diff --git a/extensions/admin-tool-ext-win/yarn.lock b/extensions/admin-tool-ext-win/yarn.lock
index 4ff716d7ac..4cc729a90b 100644
--- a/extensions/admin-tool-ext-win/yarn.lock
+++ b/extensions/admin-tool-ext-win/yarn.lock
@@ -189,10 +189,10 @@
   dependencies:
     "@vscode/extension-telemetry" "0.6.1"
 
-"@microsoft/ads-service-downloader@^1.2.0":
-  version "1.2.0"
-  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.0.tgz#e7b1febc89fe310256ed168fbe0aed1b90f1db1d"
-  integrity sha512-8QYnRGvzYDiJavuITnLcLTGIcXN66LP6AuNByiBA/iRc1SHypjaCqXPOK1gDHDP6KTKuXmTrKBkhojkKFE8GKA==
+"@microsoft/ads-service-downloader@^1.2.1":
+  version "1.2.1"
+  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.1.tgz#b0216cb0486db6697ccf9e166ec81a9764bdb3aa"
+  integrity sha512-xB3VUaEYauXtm3zFko5clHnhF7l7QbX0AnnULGDrd2JANu1zThBR6toUQ9+zAMO+0KCHs71XLSuoP2A24G3WCw==
   dependencies:
     async-retry "^1.2.3"
     eventemitter2 "^5.0.1"
diff --git a/extensions/azuremonitor/package.json b/extensions/azuremonitor/package.json
index 9ded7d0dee..709bd8f4a5 100644
--- a/extensions/azuremonitor/package.json
+++ b/extensions/azuremonitor/package.json
@@ -212,7 +212,7 @@
     "dataprotocol-client": "github:Microsoft/sqlops-dataprotocolclient#1.3.1",
     "figures": "^2.0.0",
     "find-remove": "1.2.1",
-    "@microsoft/ads-service-downloader": "^1.2.0",
+    "@microsoft/ads-service-downloader": "^1.2.1",
     "@microsoft/ads-extension-telemetry": "^2.0.0",
     "vscode-languageclient": "5.2.1",
     "vscode-nls": "^4.0.0"
diff --git a/extensions/azuremonitor/yarn.lock b/extensions/azuremonitor/yarn.lock
index 04dfc1d66d..2322e489d2 100644
--- a/extensions/azuremonitor/yarn.lock
+++ b/extensions/azuremonitor/yarn.lock
@@ -9,10 +9,10 @@
   dependencies:
     "@vscode/extension-telemetry" "0.6.1"
 
-"@microsoft/ads-service-downloader@^1.2.0":
-  version "1.2.0"
-  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.0.tgz#e7b1febc89fe310256ed168fbe0aed1b90f1db1d"
-  integrity sha512-8QYnRGvzYDiJavuITnLcLTGIcXN66LP6AuNByiBA/iRc1SHypjaCqXPOK1gDHDP6KTKuXmTrKBkhojkKFE8GKA==
+"@microsoft/ads-service-downloader@^1.2.1":
+  version "1.2.1"
+  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.1.tgz#b0216cb0486db6697ccf9e166ec81a9764bdb3aa"
+  integrity sha512-xB3VUaEYauXtm3zFko5clHnhF7l7QbX0AnnULGDrd2JANu1zThBR6toUQ9+zAMO+0KCHs71XLSuoP2A24G3WCw==
   dependencies:
     async-retry "^1.2.3"
     eventemitter2 "^5.0.1"
diff --git a/extensions/datavirtualization/package.json b/extensions/datavirtualization/package.json
index 73b7a834fe..84d7022119 100644
--- a/extensions/datavirtualization/package.json
+++ b/extensions/datavirtualization/package.json
@@ -106,7 +106,7 @@
   },
   "dependencies": {
     "@microsoft/ads-extension-telemetry": "^2.0.0",
-    "@microsoft/ads-service-downloader": "^1.2.0",
+    "@microsoft/ads-service-downloader": "^1.2.1",
     "dataprotocol-client": "github:Microsoft/sqlops-dataprotocolclient#1.3.2",
     "vscode-nls": "^5.2.0"
   },
diff --git a/extensions/datavirtualization/yarn.lock b/extensions/datavirtualization/yarn.lock
index 2bb4a9fa65..3e554bc6d7 100644
--- a/extensions/datavirtualization/yarn.lock
+++ b/extensions/datavirtualization/yarn.lock
@@ -213,10 +213,10 @@
   dependencies:
     "@vscode/extension-telemetry" "0.6.1"
 
-"@microsoft/ads-service-downloader@^1.2.0":
-  version "1.2.0"
-  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.0.tgz#e7b1febc89fe310256ed168fbe0aed1b90f1db1d"
-  integrity sha512-8QYnRGvzYDiJavuITnLcLTGIcXN66LP6AuNByiBA/iRc1SHypjaCqXPOK1gDHDP6KTKuXmTrKBkhojkKFE8GKA==
+"@microsoft/ads-service-downloader@^1.2.1":
+  version "1.2.1"
+  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.1.tgz#b0216cb0486db6697ccf9e166ec81a9764bdb3aa"
+  integrity sha512-xB3VUaEYauXtm3zFko5clHnhF7l7QbX0AnnULGDrd2JANu1zThBR6toUQ9+zAMO+0KCHs71XLSuoP2A24G3WCw==
   dependencies:
     async-retry "^1.2.3"
     eventemitter2 "^5.0.1"
diff --git a/extensions/import/package.json b/extensions/import/package.json
index 92b4440583..2fb4484cf9 100644
--- a/extensions/import/package.json
+++ b/extensions/import/package.json
@@ -79,7 +79,7 @@
   "dependencies": {
     "dataprotocol-client": "github:Microsoft/sqlops-dataprotocolclient#1.3.1",
     "htmlparser2": "^3.10.1",
-    "@microsoft/ads-service-downloader": "^1.2.0",
+    "@microsoft/ads-service-downloader": "^1.2.1",
     "@microsoft/ads-extension-telemetry": "^2.0.0",
     "vscode-nls": "^4.1.2"
   },
diff --git a/extensions/import/yarn.lock b/extensions/import/yarn.lock
index c05c619cf5..08d79b2dfc 100644
--- a/extensions/import/yarn.lock
+++ b/extensions/import/yarn.lock
@@ -189,10 +189,10 @@
   dependencies:
     "@vscode/extension-telemetry" "0.6.1"
 
-"@microsoft/ads-service-downloader@^1.2.0":
-  version "1.2.0"
-  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.0.tgz#e7b1febc89fe310256ed168fbe0aed1b90f1db1d"
-  integrity sha512-8QYnRGvzYDiJavuITnLcLTGIcXN66LP6AuNByiBA/iRc1SHypjaCqXPOK1gDHDP6KTKuXmTrKBkhojkKFE8GKA==
+"@microsoft/ads-service-downloader@^1.2.1":
+  version "1.2.1"
+  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.1.tgz#b0216cb0486db6697ccf9e166ec81a9764bdb3aa"
+  integrity sha512-xB3VUaEYauXtm3zFko5clHnhF7l7QbX0AnnULGDrd2JANu1zThBR6toUQ9+zAMO+0KCHs71XLSuoP2A24G3WCw==
   dependencies:
     async-retry "^1.2.3"
     eventemitter2 "^5.0.1"
diff --git a/extensions/kusto/package.json b/extensions/kusto/package.json
index ecde8bfbc5..a08de0b30f 100644
--- a/extensions/kusto/package.json
+++ b/extensions/kusto/package.json
@@ -430,7 +430,7 @@
     "dataprotocol-client": "github:Microsoft/sqlops-dataprotocolclient#1.3.1",
     "figures": "^2.0.0",
     "find-remove": "1.2.1",
-    "@microsoft/ads-service-downloader": "^1.2.0",
+    "@microsoft/ads-service-downloader": "^1.2.1",
     "@microsoft/ads-extension-telemetry": "^2.0.0",
     "vscode-languageclient": "5.2.1",
     "vscode-nls": "^4.0.0"
diff --git a/extensions/kusto/yarn.lock b/extensions/kusto/yarn.lock
index 00fa731380..c6788b9ce5 100644
--- a/extensions/kusto/yarn.lock
+++ b/extensions/kusto/yarn.lock
@@ -9,10 +9,10 @@
   dependencies:
     "@vscode/extension-telemetry" "0.6.1"
 
-"@microsoft/ads-service-downloader@^1.2.0":
-  version "1.2.0"
-  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.0.tgz#e7b1febc89fe310256ed168fbe0aed1b90f1db1d"
-  integrity sha512-8QYnRGvzYDiJavuITnLcLTGIcXN66LP6AuNByiBA/iRc1SHypjaCqXPOK1gDHDP6KTKuXmTrKBkhojkKFE8GKA==
+"@microsoft/ads-service-downloader@^1.2.1":
+  version "1.2.1"
+  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.1.tgz#b0216cb0486db6697ccf9e166ec81a9764bdb3aa"
+  integrity sha512-xB3VUaEYauXtm3zFko5clHnhF7l7QbX0AnnULGDrd2JANu1zThBR6toUQ9+zAMO+0KCHs71XLSuoP2A24G3WCw==
   dependencies:
     async-retry "^1.2.3"
     eventemitter2 "^5.0.1"
diff --git a/extensions/mssql/config.json b/extensions/mssql/config.json
index 14995090e2..169b717c8d 100644
--- a/extensions/mssql/config.json
+++ b/extensions/mssql/config.json
@@ -6,6 +6,7 @@
 		"Windows_64": "win-x64-net7.0.zip",
 		"Windows_ARM64": "win-arm64-net7.0.zip",
 		"OSX": "osx-x64-net7.0.tar.gz",
+		"OSX_ARM64": "osx-arm64-net7.0.tar.gz",
 		"Linux": "rhel-x64-net7.0.tar.gz"
 	},
 	"installDirectory": "./sqltoolsservice/{#platform#}/{#version#}",
diff --git a/extensions/mssql/package.json b/extensions/mssql/package.json
index 003e4861d0..ec7a126e65 100644
--- a/extensions/mssql/package.json
+++ b/extensions/mssql/package.json
@@ -1423,7 +1423,7 @@
   },
   "dependencies": {
     "@microsoft/ads-extension-telemetry": "^2.0.0",
-    "@microsoft/ads-service-downloader": "^1.2.0",
+    "@microsoft/ads-service-downloader": "^1.2.1",
     "dataprotocol-client": "github:Microsoft/sqlops-dataprotocolclient#1.3.2",
     "find-remove": "1.2.1",
     "vscode-languageclient": "5.2.1",
diff --git a/extensions/mssql/yarn.lock b/extensions/mssql/yarn.lock
index d19ddc572f..bfa55c0d80 100644
--- a/extensions/mssql/yarn.lock
+++ b/extensions/mssql/yarn.lock
@@ -189,10 +189,10 @@
   dependencies:
     "@vscode/extension-telemetry" "0.6.1"
 
-"@microsoft/ads-service-downloader@^1.2.0":
-  version "1.2.0"
-  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.0.tgz#e7b1febc89fe310256ed168fbe0aed1b90f1db1d"
-  integrity sha512-8QYnRGvzYDiJavuITnLcLTGIcXN66LP6AuNByiBA/iRc1SHypjaCqXPOK1gDHDP6KTKuXmTrKBkhojkKFE8GKA==
+"@microsoft/ads-service-downloader@^1.2.1":
+  version "1.2.1"
+  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.1.tgz#b0216cb0486db6697ccf9e166ec81a9764bdb3aa"
+  integrity sha512-xB3VUaEYauXtm3zFko5clHnhF7l7QbX0AnnULGDrd2JANu1zThBR6toUQ9+zAMO+0KCHs71XLSuoP2A24G3WCw==
   dependencies:
     async-retry "^1.2.3"
     eventemitter2 "^5.0.1"
diff --git a/extensions/sql-migration/package.json b/extensions/sql-migration/package.json
index 0176c0f46f..6dcf768184 100644
--- a/extensions/sql-migration/package.json
+++ b/extensions/sql-migration/package.json
@@ -154,7 +154,7 @@
   },
   "dependencies": {
     "dataprotocol-client": "github:Microsoft/sqlops-dataprotocolclient#1.3.1",
-    "@microsoft/ads-service-downloader": "^1.2.0",
+    "@microsoft/ads-service-downloader": "^1.2.1",
     "@microsoft/ads-extension-telemetry": "^2.0.0",
     "uuid": "^8.3.2",
     "vscode-nls": "^4.1.2"
diff --git a/extensions/sql-migration/yarn.lock b/extensions/sql-migration/yarn.lock
index a0fdccd0a9..e6e74bcaf5 100644
--- a/extensions/sql-migration/yarn.lock
+++ b/extensions/sql-migration/yarn.lock
@@ -9,10 +9,10 @@
   dependencies:
     "@vscode/extension-telemetry" "0.6.1"
 
-"@microsoft/ads-service-downloader@^1.2.0":
-  version "1.2.0"
-  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.0.tgz#e7b1febc89fe310256ed168fbe0aed1b90f1db1d"
-  integrity sha512-8QYnRGvzYDiJavuITnLcLTGIcXN66LP6AuNByiBA/iRc1SHypjaCqXPOK1gDHDP6KTKuXmTrKBkhojkKFE8GKA==
+"@microsoft/ads-service-downloader@^1.2.1":
+  version "1.2.1"
+  resolved "https://registry.yarnpkg.com/@microsoft/ads-service-downloader/-/ads-service-downloader-1.2.1.tgz#b0216cb0486db6697ccf9e166ec81a9764bdb3aa"
+  integrity sha512-xB3VUaEYauXtm3zFko5clHnhF7l7QbX0AnnULGDrd2JANu1zThBR6toUQ9+zAMO+0KCHs71XLSuoP2A24G3WCw==
   dependencies:
     async-retry "^1.2.3"
     eventemitter2 "^5.0.1"