diff --git a/ee/lib/remote_development/workspaces/create/personal_access_token_creator.rb b/ee/lib/remote_development/workspaces/create/personal_access_token_creator.rb
index 3ffe88b3f6b8b179d851763868bf3273dd6374af..17c3422769908d30cde80df5712141f85cb3ae59 100644
--- a/ee/lib/remote_development/workspaces/create/personal_access_token_creator.rb
+++ b/ee/lib/remote_development/workspaces/create/personal_access_token_creator.rb
@@ -22,7 +22,7 @@ def self.create(context)
           personal_access_token = user.personal_access_tokens.build(
             name: workspace_name,
             impersonation: false,
-            scopes: [:write_repository],
+            scopes: [:write_repository, :api],
             # Since expires_at is a date, we need to set it to the round it off to the next day.
             # e.g. If the max_hours_before_termination of the workspace is 1 hour
             # and the workspace is created at 2023-08-20 05:30:00,
diff --git a/ee/lib/remote_development/workspaces/create/workspace_variables.rb b/ee/lib/remote_development/workspaces/create/workspace_variables.rb
index fd4eebcc7546cd8e6bd3059694fba219889c5a7e..1924675d100f86a4e5c87c6f151386e84da4dfa5 100644
--- a/ee/lib/remote_development/workspaces/create/workspace_variables.rb
+++ b/ee/lib/remote_development/workspaces/create/workspace_variables.rb
@@ -134,6 +134,19 @@ def self.variables(
               value: vscode_extensions_gallery_resource_url_template,
               variable_type: RemoteDevelopment::Enums::Workspace::WORKSPACE_VARIABLE_TYPES[:environment],
               workspace_id: workspace_id
+            },
+            # variables with prefix `GITLAB_WORKFLOW_` are used for configured GitLab Workflow extension for VS Code
+            {
+              key: 'GITLAB_WORKFLOW_INSTANCE_URL',
+              value: Gitlab::Routing.url_helpers.root_url,
+              variable_type: RemoteDevelopment::Enums::Workspace::WORKSPACE_VARIABLE_TYPES[:environment],
+              workspace_id: workspace_id
+            },
+            {
+              key: 'GITLAB_WORKFLOW_TOKEN_FILE',
+              value: RemoteDevelopment::Workspaces::FileMounts::GITLAB_TOKEN_FILE,
+              variable_type: RemoteDevelopment::Enums::Workspace::WORKSPACE_VARIABLE_TYPES[:environment],
+              workspace_id: workspace_id
             }
           ]
 
diff --git a/ee/spec/fixtures/remote_development/example.processed-devfile-v2.yaml b/ee/spec/fixtures/remote_development/example.processed-devfile-v2.yaml
index 913610586a25a69d37306847fc6b930f24d910b6..0afce736c8d6927afd9dcb7f1542f32e5b56ead6 100644
--- a/ee/spec/fixtures/remote_development/example.processed-devfile-v2.yaml
+++ b/ee/spec/fixtures/remote_development/example.processed-devfile-v2.yaml
@@ -59,7 +59,7 @@ components:
       mountSources: true
   - name: gl-tools-injector
     container:
-      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0
+      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0
       volumeMounts:
         - name: gl-workspace-data
           path: /projects
diff --git a/ee/spec/fixtures/remote_development/example.processed-devfile.yaml b/ee/spec/fixtures/remote_development/example.processed-devfile.yaml
index 913610586a25a69d37306847fc6b930f24d910b6..0afce736c8d6927afd9dcb7f1542f32e5b56ead6 100644
--- a/ee/spec/fixtures/remote_development/example.processed-devfile.yaml
+++ b/ee/spec/fixtures/remote_development/example.processed-devfile.yaml
@@ -59,7 +59,7 @@ components:
       mountSources: true
   - name: gl-tools-injector
     container:
-      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0
+      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0
       volumeMounts:
         - name: gl-workspace-data
           path: /projects
diff --git a/ee/spec/fixtures/remote_development/example.processed-marketplace-disabled-devfile.yaml b/ee/spec/fixtures/remote_development/example.processed-marketplace-disabled-devfile.yaml
index 8f7e9d9f171d2147301700b1f103908711339588..6379e25fa347e14dec18cf12ccb070053e8554cf 100644
--- a/ee/spec/fixtures/remote_development/example.processed-marketplace-disabled-devfile.yaml
+++ b/ee/spec/fixtures/remote_development/example.processed-marketplace-disabled-devfile.yaml
@@ -51,7 +51,7 @@ components:
       size: 15Gi
   - name: gl-tools-injector
     container:
-      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0
+      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0
       volumeMounts:
         - name: gl-workspace-data
           path: /projects
diff --git a/ee/spec/fixtures/remote_development/example.project-cloner-injected-devfile.yaml b/ee/spec/fixtures/remote_development/example.project-cloner-injected-devfile.yaml
index 8119477f945cd456d56f6e40e200e2e47ee58419..e5f2079028d888f8881451dda8b154e3372d8027 100644
--- a/ee/spec/fixtures/remote_development/example.project-cloner-injected-devfile.yaml
+++ b/ee/spec/fixtures/remote_development/example.project-cloner-injected-devfile.yaml
@@ -53,7 +53,7 @@ components:
       mountSources: true
   - name: gl-tools-injector
     container:
-      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0
+      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0
       env:
         - name: GL_TOOLS_DIR
           value: "/projects/.gl-tools"
diff --git a/ee/spec/fixtures/remote_development/example.tools-injected-devfile.yaml b/ee/spec/fixtures/remote_development/example.tools-injected-devfile.yaml
index 29d790b46ec25597387191eda3ff2514bcb1c3a1..f59219400a2938b0c8b587cd7f133a2ac5e8d14b 100644
--- a/ee/spec/fixtures/remote_development/example.tools-injected-devfile.yaml
+++ b/ee/spec/fixtures/remote_development/example.tools-injected-devfile.yaml
@@ -53,7 +53,7 @@ components:
       mountSources: true
   - name: gl-tools-injector
     container:
-      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0
+      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0
       env:
         - name: GL_TOOLS_DIR
           value: "/projects/.gl-tools"
diff --git a/ee/spec/fixtures/remote_development/example.tools-injected-marketplace-disabled-devfile.yaml b/ee/spec/fixtures/remote_development/example.tools-injected-marketplace-disabled-devfile.yaml
index 8c50450f4c2c349fea591ad599a3590ce667ed1c..06178b6fcfc636b973ba988483a78b2dd9e26802 100644
--- a/ee/spec/fixtures/remote_development/example.tools-injected-marketplace-disabled-devfile.yaml
+++ b/ee/spec/fixtures/remote_development/example.tools-injected-marketplace-disabled-devfile.yaml
@@ -53,7 +53,7 @@ components:
       mountSources: true
   - name: gl-tools-injector
     container:
-      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0
+      image: registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0
       env:
         - name: GL_TOOLS_DIR
           value: "/projects/.gl-tools"
diff --git a/ee/spec/lib/remote_development/workspaces/create/main_integration_spec.rb b/ee/spec/lib/remote_development/workspaces/create/main_integration_spec.rb
index 440aaa0c46f8a0bcb95e4c83884319cf4aa132bb..4ba810fecb052f94953d6e4508e7a34fe04cd0b0 100644
--- a/ee/spec/lib/remote_development/workspaces/create/main_integration_spec.rb
+++ b/ee/spec/lib/remote_development/workspaces/create/main_integration_spec.rb
@@ -52,7 +52,7 @@
   end
 
   let(:tools_injector_image_from_settings) do
-    "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0"
+    "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0"
   end
 
   let(:settings) do
diff --git a/ee/spec/lib/remote_development/workspaces/create/tools_component_injector_spec.rb b/ee/spec/lib/remote_development/workspaces/create/tools_component_injector_spec.rb
index 6c67740bdf7a1ff2d27be47759e361c2fa957569..3634dea9a0b47196a5b5fab36a76f742ddc9fbf7 100644
--- a/ee/spec/lib/remote_development/workspaces/create/tools_component_injector_spec.rb
+++ b/ee/spec/lib/remote_development/workspaces/create/tools_component_injector_spec.rb
@@ -10,7 +10,7 @@
   let(:expected_processed_devfile_name) { 'example.tools-injected-devfile.yaml' }
   let(:expected_processed_devfile) { YAML.safe_load(read_devfile(expected_processed_devfile_name)).to_h }
   let(:tools_injector_image_from_settings) do
-    "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0"
+    "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0"
   end
 
   let(:settings) do
diff --git a/ee/spec/lib/remote_development/workspaces/create/workspace_variables_spec.rb b/ee/spec/lib/remote_development/workspaces/create/workspace_variables_spec.rb
index 56a3ab0cd163fc22d23b3e285ab4660a4914af0d..98dd3df0c8293e69201892f2f4e9b20e10f4a1e1 100644
--- a/ee/spec/lib/remote_development/workspaces/create/workspace_variables_spec.rb
+++ b/ee/spec/lib/remote_development/workspaces/create/workspace_variables_spec.rb
@@ -128,6 +128,18 @@
         variable_type: RemoteDevelopment::Enums::Workspace::WORKSPACE_VARIABLE_TYPES[:environment],
         workspace_id: workspace_id
       },
+      {
+        key: 'GITLAB_WORKFLOW_INSTANCE_URL',
+        value: Gitlab::Routing.url_helpers.root_url,
+        variable_type: RemoteDevelopment::Enums::Workspace::WORKSPACE_VARIABLE_TYPES[:environment],
+        workspace_id: workspace_id
+      },
+      {
+        key: 'GITLAB_WORKFLOW_TOKEN_FILE',
+        value: "/.workspace-data/variables/file/gl_token",
+        variable_type: RemoteDevelopment::Enums::Workspace::WORKSPACE_VARIABLE_TYPES[:environment],
+        workspace_id: workspace_id
+      },
       {
         key: "VAR1",
         value: "value 1",
@@ -173,6 +185,10 @@
     )
   end
 
+  before do
+    allow(Gitlab::Routing).to receive_message_chain(:url_helpers, :root_url).and_return("https://gitlab.com")
+  end
+
   it 'defines correct variables' do
     expect(variables).to eq(expected_variables)
   end
diff --git a/ee/spec/support/shared_contexts/remote_development/remote_development_shared_contexts.rb b/ee/spec/support/shared_contexts/remote_development/remote_development_shared_contexts.rb
index 4771c78f7e82ea2cb79719da41b736448a7b8ddd..f2d09cfd8891650b21baf66a8ab01c57c8ad7873 100644
--- a/ee/spec/support/shared_contexts/remote_development/remote_development_shared_contexts.rb
+++ b/ee/spec/support/shared_contexts/remote_development/remote_development_shared_contexts.rb
@@ -808,7 +808,7 @@ def workspace_deployment(
                     value: "/projects"
                   }
                 ],
-                image: "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0",
+                image: "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0",
                 imagePullPolicy: "Always",
                 name: "gl-tools-injector-gl-tools-injector-command-2",
                 resources: {
diff --git a/lib/remote_development/settings/default_settings.rb b/lib/remote_development/settings/default_settings.rb
index 2691b215c08284bcc5c070802b2577ab914424fb..efe577329d1ef2b1898928fee3858aabc7a60447 100644
--- a/lib/remote_development/settings/default_settings.rb
+++ b/lib/remote_development/settings/default_settings.rb
@@ -20,7 +20,7 @@ def self.default_settings
           max_hours_before_termination_limit: [120, Integer],
           project_cloner_image: ['alpine/git:2.36.3', String],
           tools_injector_image: [
-            "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:1.0.0", String
+            "registry.gitlab.com/gitlab-org/remote-development/gitlab-workspaces-tools:2.0.0", String
           ],
           vscode_extensions_gallery: [
             {