diff --git a/extensions/ql-vscode/src/packaging/packaging.ts b/extensions/ql-vscode/src/packaging/packaging.ts
index 30becc575be..b32c7fcc1bc 100644
--- a/extensions/ql-vscode/src/packaging/packaging.ts
+++ b/extensions/ql-vscode/src/packaging/packaging.ts
@@ -1,4 +1,4 @@
-import { CodeQLCliServer } from "../codeql-cli/cli";
+import { CodeQLCliServer, QlpacksInfo } from "../codeql-cli/cli";
 import { getOnDiskWorkspaceFolders } from "../common/vscode/workspace-folders";
 import { QuickPickItem, window } from "vscode";
 import {
@@ -16,6 +16,7 @@ import { redactableError } from "../common/errors";
 import { PACKS_BY_QUERY_LANGUAGE } from "../common/query-language";
 import { PackagingCommands } from "../common/commands";
 import { telemetryListener } from "../common/vscode/telemetry";
+import { containsPath } from "../common/files";
 
 type PackagingOptions = {
   cliServer: CodeQLCliServer;
@@ -126,9 +127,10 @@ export async function handleInstallPackDependencies(
     step: 1,
     maxStep: 2,
   });
-  const workspacePacks = await cliServer.resolveQlpacks(
-    getOnDiskWorkspaceFolders(),
-  );
+  const workspaceFolders = getOnDiskWorkspaceFolders();
+  const resolvedPacks = await cliServer.resolveQlpacks(workspaceFolders);
+  const workspacePacks = filterWorkspacePacks(resolvedPacks, workspaceFolders);
+
   const quickPickItems = Object.entries(
     workspacePacks,
   ).map<QLPackQuickPickItem>(([key, value]) => ({
@@ -179,3 +181,27 @@ export async function handleInstallPackDependencies(
     throw new UserCancellationException("No packs selected.");
   }
 }
+
+/**
+ * This filter will remove any packs from the qlpacks that are not in the workspace. It will
+ * filter out any packs that are in e.g. the package cache or in the distribution, which the
+ * user does not need to install dependencies for.
+ *
+ * @param qlpacks The qlpacks to filter.
+ * @param workspaceFolders The workspace folders to filter by.
+ */
+export function filterWorkspacePacks(
+  qlpacks: QlpacksInfo,
+  workspaceFolders: string[],
+): QlpacksInfo {
+  return Object.fromEntries(
+    Object.entries(qlpacks).filter(([, packDirs]) =>
+      // If any of the pack dirs are in the workspace, keep the pack
+      packDirs.some((packDir) =>
+        workspaceFolders.some((workspaceFolder) =>
+          containsPath(workspaceFolder, packDir),
+        ),
+      ),
+    ),
+  );
+}
diff --git a/extensions/ql-vscode/test/vscode-tests/cli-integration/packaging/packaging.test.ts b/extensions/ql-vscode/test/vscode-tests/cli-integration/packaging/packaging.test.ts
index 8ddb0732b1c..993f3dc4630 100644
--- a/extensions/ql-vscode/test/vscode-tests/cli-integration/packaging/packaging.test.ts
+++ b/extensions/ql-vscode/test/vscode-tests/cli-integration/packaging/packaging.test.ts
@@ -12,9 +12,12 @@ import {
 import { mockedQuickPickItem } from "../../utils/mocking.helpers";
 import { getActivatedExtension } from "../../global.helper";
 import {
-  showAndLogInformationMessage,
   showAndLogExceptionWithTelemetry,
+  showAndLogInformationMessage,
 } from "../../../../src/common/logging";
+import * as workspaceFolders from "../../../../src/common/vscode/workspace-folders";
+import { getOnDiskWorkspaceFolders } from "../../../../src/common/vscode/workspace-folders";
+import { pathsEqual } from "../../../../src/common/files";
 
 describe("Packaging commands", () => {
   let cli: CodeQLCliServer;
@@ -87,6 +90,48 @@ describe("Packaging commands", () => {
     ).toEqual("Unable to download all packs. See log for more details.");
   });
 
+  it("should only show workspace packs", async () => {
+    const originalWorkspaceFolders = getOnDiskWorkspaceFolders();
+
+    // Remove the CodeQL workspace folder from the list of workspace folders
+    // since that includes all the packs that are already in the package cache,
+    // so the test would be useless if we included it since nothing would be
+    // filtered out (except for maybe the distribution legacy-upgrades).
+    jest
+      .spyOn(workspaceFolders, "getOnDiskWorkspaceFolders")
+      .mockReturnValue(
+        originalWorkspaceFolders.filter(
+          (folder) => !pathsEqual(folder, process.env.TEST_CODEQL_PATH ?? ""),
+        ),
+      );
+
+    const rootDir = join(__dirname, "../data");
+    quickPickSpy.mockResolvedValue(
+      mockedQuickPickItem([
+        {
+          label: "integration-test-queries-javascript",
+          packRootDir: [rootDir],
+        },
+      ]),
+    );
+
+    await handleInstallPackDependencies(cli, progress);
+    expect(quickPickSpy).toHaveBeenCalledWith(
+      [
+        expect.objectContaining({
+          label: "integration-test-debugger-javascript",
+        }),
+        expect.objectContaining({
+          label: "semmle/has-extension",
+        }),
+        expect.objectContaining({
+          label: "semmle/targets-extension",
+        }),
+      ],
+      expect.anything(),
+    );
+  });
+
   it("should install valid workspace pack", async () => {
     const rootDir = join(__dirname, "../data");
     quickPickSpy.mockResolvedValue(