diff --git a/code-server/main.tf b/code-server/main.tf
index ca4ff3af..7b9e49cb 100644
--- a/code-server/main.tf
+++ b/code-server/main.tf
@@ -44,6 +44,12 @@ variable "settings" {
   default     = {}
 }
 
+variable "machine-settings" {
+  type        = any
+  description = "A map of template level machine settings to apply to code-server. This will be overwritten at each container start."
+  default     = {}
+}
+
 variable "folder" {
   type        = string
   description = "The folder to open in code-server."
@@ -149,6 +155,7 @@ resource "coder_script" "code-server" {
     INSTALL_PREFIX : var.install_prefix,
     // This is necessary otherwise the quotes are stripped!
     SETTINGS : replace(jsonencode(var.settings), "\"", "\\\""),
+    MACHINE_SETTINGS : replace(jsonencode(var.machine-settings), "\"", "\\\""),
     OFFLINE : var.offline,
     USE_CACHED : var.use_cached,
     USE_CACHED_EXTENSIONS : var.use_cached_extensions,
@@ -187,4 +194,4 @@ resource "coder_app" "code-server" {
     interval  = 5
     threshold = 6
   }
-}
+}
\ No newline at end of file
diff --git a/code-server/run.sh b/code-server/run.sh
index 99b30c0e..73bcd689 100755
--- a/code-server/run.sh
+++ b/code-server/run.sh
@@ -23,7 +23,20 @@ function run_code_server() {
 if [ ! -f ~/.local/share/code-server/User/settings.json ]; then
   echo "⚙️ Creating settings file..."
   mkdir -p ~/.local/share/code-server/User
-  echo "${SETTINGS}" > ~/.local/share/code-server/User/settings.json
+  if command -v jq &> /dev/null; then
+    echo "${SETTINGS}" | jq '.' > ~/.local/share/code-server/User/settings.json
+  else
+    echo "${SETTINGS}" > ~/.local/share/code-server/User/settings.json
+  fi
+fi
+
+# Apply/overwrite template based settings
+echo "⚙️ Creating machine settings file..."
+mkdir -p ~/.local/share/code-server/Machine
+if command -v jq &> /dev/null; then
+  echo "${MACHINE_SETTINGS}" | jq '.' > ~/.local/share/code-server/Machine/settings.json
+else
+  echo "${MACHINE_SETTINGS}" > ~/.local/share/code-server/Machine/settings.json
 fi
 
 # Check if code-server is already installed for offline