diff --git a/src/manifest.ts b/src/manifest.ts
index 12406ba6..50483aa7 100644
--- a/src/manifest.ts
+++ b/src/manifest.ts
@@ -60,6 +60,7 @@ export interface Manifest {
 	enabledApiProposals?: readonly string[];
 	qna?: 'marketplace' | string | false;
 	extensionKind?: ExtensionKind | ExtensionKind[];
+	sponsor?: string;
 
 	// optional (npm)
 	author?: string | Person;
diff --git a/src/package.ts b/src/package.ts
index 29bb1369..f6845fff 100644
--- a/src/package.ts
+++ b/src/package.ts
@@ -128,6 +128,7 @@ export interface VSIX {
 	extensionKind: string;
 	localizedLanguages: string;
 	preRelease: boolean;
+	sponsorLink: string;
 }
 
 export class BaseProcessor implements IProcessor {
@@ -453,6 +454,7 @@ export class ManifestProcessor extends BaseProcessor {
 							.join(',')
 					: '',
 			preRelease: !!this.options.preRelease,
+			sponsorLink: manifest.sponsor || '',
 		};
 
 		if (isGitHub) {
@@ -603,6 +605,7 @@ export class TagsProcessor extends BaseProcessor {
 		);
 
 		const webExensionTags = isWebKind(this.manifest) ? ['__web_extension'] : [];
+		const sponsorTags = this.manifest.sponsor ? ['__sponsor_extension'] : [];
 
 		const tags = new Set([
 			...keywords,
@@ -620,6 +623,7 @@ export class TagsProcessor extends BaseProcessor {
 			...grammars,
 			...descriptionKeywords,
 			...webExensionTags,
+			...sponsorTags,
 		]);
 
 		this.tags = [...tags].filter(tag => !!tag);
@@ -1299,6 +1303,11 @@ export async function toVsixManifest(vsix: VSIX): Promise<string> {
 				<Property Id="Microsoft.VisualStudio.Code.ExtensionKind" Value="${escape(vsix.extensionKind)}" />
 				<Property Id="Microsoft.VisualStudio.Code.LocalizedLanguages" Value="${escape(vsix.localizedLanguages)}" />
 				${vsix.preRelease ? `<Property Id="Microsoft.VisualStudio.Code.PreRelease" Value="${escape(vsix.preRelease)}" />` : ''}
+				${
+					vsix.sponsorLink
+						? `<Property Id="Microsoft.VisualStudio.Code.SponsorLink" Value="${escape(vsix.sponsorLink)}" />`
+						: ''
+				}
 				${
 					!vsix.links.repository
 						? ''
diff --git a/src/test/package.test.ts b/src/test/package.test.ts
index 3cd904db..dc8eed0c 100644
--- a/src/test/package.test.ts
+++ b/src/test/package.test.ts
@@ -1660,6 +1660,34 @@ describe('toVsixManifest', () => {
 		assertProperty(xmlManifest, 'Microsoft.VisualStudio.Code.PreRelease', 'true');
 	});
 
+	it('should add sponsor link property', () => {
+		const sponsor = 'https://foo.bar';
+		const manifest: Manifest = {
+			name: 'test',
+			publisher: 'mocha',
+			version: '0.0.1',
+			description: 'test extension',
+			engines: Object.create(null),
+			sponsor,
+		};
+
+		return _toVsixManifest(manifest, [])
+			.then(parseXmlManifest)
+			.then(result => {
+				const properties = result.PackageManifest.Metadata[0].Properties[0].Property;
+				const sponsorLinkProp = properties.find(p => p.$.Id === 'Microsoft.VisualStudio.Code.SponsorLink');
+				assert.strictEqual(sponsorLinkProp?.$.Value, sponsor);
+			});
+	});
+
+	it('should automatically add sponsor tag for extension with sponsor link', async () => {
+		const manifest = createManifest({ sponsor: 'https://foo.bar' });
+		const vsixManifest = await _toVsixManifest(manifest, []);
+		const result = await parseXmlManifest(vsixManifest);
+
+		assert.ok(result.PackageManifest.Metadata[0].Tags[0].split(',').includes('__sponsor_extension'));
+	});
+
 	it('should add prerelease property when --pre-release flag is passed when engine property is for insiders', async () => {
 		const manifest = createManifest({ engines: { vscode: '>=1.64.0-insider' } });