diff --git a/package.json b/package.json
index dc15be67a..3dad8df44 100644
--- a/package.json
+++ b/package.json
@@ -181,6 +181,12 @@
                 },
                 "enablement": "!virtualWorkspace"
             },
+            {
+                "command": "azureFunctions.createNewProjectWithDockerfile",
+                "title": "%azureFunctions.createNewProjectWithDockerfile%",
+                "category": "Azure Functions",
+                "enablement": "!virtualWorkspace"
+            },
             {
                 "command": "azureFunctions.createSlot",
                 "title": "%azureFunctions.createSlot%",
@@ -381,6 +387,10 @@
                     "command": "azureFunctions.createNewProject",
                     "group": "1_projects@2"
                 },
+                {
+                    "command": "azureFunctions.createNewProjectWithDockerfile",
+                    "group": "1_projects@3"
+                },
                 {
                     "command": "azureFunctions.deploy",
                     "group": "2_deploy@1"
diff --git a/package.nls.json b/package.nls.json
index 1359cdf7b..ed0f2e448 100644
--- a/package.nls.json
+++ b/package.nls.json
@@ -18,6 +18,7 @@
     "azureFunctions.createFunctionAppAdvanced": "Create Function App in Azure... (Advanced)",
     "azureFunctions.createFunctionAppDetail": "For serverless, event driven apps and automation.",
     "azureFunctions.createNewProject": "Create New Project...",
+    "azureFunctions.createNewProjectWithDockerfile": "Create New Containerized Project...",
     "azureFunctions.createPythonVenv": "Create a virtual environment when creating a new Python project.",
     "azureFunctions.createSlot": "Create Slot...",
     "azureFunctions.createServiceConnector": "Create connection...",
diff --git a/src/commands/createNewProject/createNewProject.ts b/src/commands/createNewProject/createNewProject.ts
index 257e41461..fb001addc 100644
--- a/src/commands/createNewProject/createNewProject.ts
+++ b/src/commands/createNewProject/createNewProject.ts
@@ -3,13 +3,14 @@
  *  Licensed under the MIT License. See License.txt in the project root for license information.
  *--------------------------------------------------------------------------------------------*/
 
-import { AzureWizard, type IActionContext } from '@microsoft/vscode-azext-utils';
+import { AzureWizard, UserCancelledError, type IActionContext } from '@microsoft/vscode-azext-utils';
 import { window } from 'vscode';
 import { latestGAVersion, tryParseFuncVersion } from '../../FuncVersion';
 import { funcVersionSetting, projectLanguageSetting, projectOpenBehaviorSetting, projectTemplateKeySetting, type ProjectLanguage } from '../../constants';
 import { ext } from '../../extensionVariables';
 import { addLocalFuncTelemetry } from '../../funcCoreTools/getLocalFuncCoreToolsVersion';
 import { tryGetLocalFuncVersion } from '../../funcCoreTools/tryGetLocalFuncVersion';
+import { validateFuncCoreToolsInstalled } from '../../funcCoreTools/validateFuncCoreToolsInstalled';
 import { localize } from '../../localize';
 import { getGlobalSetting, getWorkspaceSetting } from '../../vsCodeConfig/settings';
 import type * as api from '../../vscode-azurefunctions.api';
@@ -18,6 +19,7 @@ import { FolderListStep } from './FolderListStep';
 import { NewProjectLanguageStep } from './NewProjectLanguageStep';
 import { OpenBehaviorStep } from './OpenBehaviorStep';
 import { OpenFolderStep } from './OpenFolderStep';
+import { CreateDockerfileProjectStep } from './dockerfileSteps/CreateDockerfileProjectStep';
 
 /**
  * @deprecated Use AzureFunctionsExtensionApi.createFunction instead
@@ -54,6 +56,13 @@ export async function createNewProjectInternal(context: IActionContext, options:
     const wizardContext: Partial<IFunctionWizardContext> & IActionContext = Object.assign(context, options, { language, version: tryParseFuncVersion(version), projectTemplateKey });
     const optionalExecuteStep = options.executeStep;
 
+    if (optionalExecuteStep instanceof CreateDockerfileProjectStep) {
+        const message: string = localize('installFuncTools', 'You must have the Azure Functions Core Tools installed to run this command.');
+        if (!await validateFuncCoreToolsInstalled(context, message)) {
+            throw new UserCancelledError('validateFuncCoreToolsInstalled');
+        }
+    }
+
     if (options.folderPath) {
         FolderListStep.setProjectPath(wizardContext, options.folderPath);
     }
@@ -70,6 +79,7 @@ export async function createNewProjectInternal(context: IActionContext, options:
         promptSteps: [new FolderListStep(), new NewProjectLanguageStep(options.templateId, options.functionSettings), new OpenBehaviorStep()],
         executeSteps: optionalExecuteStep ? [optionalExecuteStep, new OpenFolderStep()] : [new OpenFolderStep()]
     });
+
     await wizard.prompt();
     await wizard.execute();
 
diff --git a/src/commands/createNewProject/dockerfileSteps/CreateDockerfileProjectStep.ts b/src/commands/createNewProject/dockerfileSteps/CreateDockerfileProjectStep.ts
new file mode 100644
index 000000000..c7c334081
--- /dev/null
+++ b/src/commands/createNewProject/dockerfileSteps/CreateDockerfileProjectStep.ts
@@ -0,0 +1,26 @@
+/*---------------------------------------------------------------------------------------------
+*  Copyright (c) Microsoft Corporation. All rights reserved.
+*  Licensed under the MIT License. See License.md in the project root for license information.
+*--------------------------------------------------------------------------------------------*/
+
+import { ext } from "@microsoft/vscode-azext-serviceconnector";
+import { AzureWizardExecuteStep, nonNullValueAndProp } from "@microsoft/vscode-azext-utils";
+import { cpUtils } from "../../../utils/cpUtils";
+import { type IFunctionWizardContext } from "../../createFunction/IFunctionWizardContext";
+
+export class CreateDockerfileProjectStep extends AzureWizardExecuteStep<IFunctionWizardContext>{
+    public priority: number = 100;
+
+    public async execute(context: IFunctionWizardContext): Promise<void> {
+        let language = nonNullValueAndProp(context, 'language').toLowerCase();
+        if (language === 'c#') {
+            language = 'csharp';
+        }
+
+        await cpUtils.executeCommand(ext.outputChannel, nonNullValueAndProp(context, 'projectPath'), "func", "init", "--worker-runtime", language, "--docker");
+    }
+
+    public shouldExecute(): boolean {
+        return true;
+    }
+}
diff --git a/src/commands/registerCommands.ts b/src/commands/registerCommands.ts
index 57f400ae8..8c94b451a 100644
--- a/src/commands/registerCommands.ts
+++ b/src/commands/registerCommands.ts
@@ -27,7 +27,8 @@ import { copyFunctionUrl } from './copyFunctionUrl';
 import { createChildNode } from './createChildNode';
 import { createFunctionFromCommand } from './createFunction/createFunction';
 import { createFunctionApp, createFunctionAppAdvanced } from './createFunctionApp/createFunctionApp';
-import { createNewProjectFromCommand } from './createNewProject/createNewProject';
+import { createNewProjectFromCommand, createNewProjectInternal } from './createNewProject/createNewProject';
+import { CreateDockerfileProjectStep } from './createNewProject/dockerfileSteps/CreateDockerfileProjectStep';
 import { createSlot } from './createSlot';
 import { deleteFunction } from './deleteFunction';
 import { deleteFunctionApp } from './deleteFunctionApp';
@@ -75,6 +76,7 @@ export function registerCommands(): void {
     registerCommandWithTreeNodeUnwrapping('azureFunctions.createFunctionApp', createFunctionApp);
     registerCommandWithTreeNodeUnwrapping('azureFunctions.createFunctionAppAdvanced', createFunctionAppAdvanced);
     registerCommand('azureFunctions.createNewProject', createNewProjectFromCommand);
+    registerCommandWithTreeNodeUnwrapping('azureFunctions.createNewProjectWithDockerfile', async (context: IActionContext) => await createNewProjectInternal(context, { executeStep: new CreateDockerfileProjectStep(), languageFilter: /Python|C\#|(Java|Type)Script|PowerShell$/i }));
     registerCommandWithTreeNodeUnwrapping('azureFunctions.createSlot', createSlot);
     registerCommandWithTreeNodeUnwrapping('azureFunctions.deleteFunction', deleteFunction);
     registerCommandWithTreeNodeUnwrapping('azureFunctions.deleteFunctionApp', deleteFunctionApp);
diff --git a/src/funcCoreTools/validateFuncCoreToolsInstalled.ts b/src/funcCoreTools/validateFuncCoreToolsInstalled.ts
index b1f73a6a6..8b8acc195 100644
--- a/src/funcCoreTools/validateFuncCoreToolsInstalled.ts
+++ b/src/funcCoreTools/validateFuncCoreToolsInstalled.ts
@@ -18,7 +18,7 @@ import { getFuncCliPath, hasFuncCliSetting } from './getFuncCliPath';
 import { getFuncPackageManagers } from './getFuncPackageManagers';
 import { installFuncCoreTools, lastCoreToolsInstallCommand } from './installFuncCoreTools';
 
-export async function validateFuncCoreToolsInstalled(context: IActionContext, message: string, workspacePath: string): Promise<boolean> {
+export async function validateFuncCoreToolsInstalled(context: IActionContext, message: string, workspacePath?: string): Promise<boolean> {
     let input: MessageItem | undefined;
     let installed: boolean = false;
     let failedInstall: string = localize('failedInstallFuncTools', 'Core Tools installation has failed and will have to be installed manually.');