diff --git a/packages/language-server/src/ls-config.ts b/packages/language-server/src/ls-config.ts
index 39e098ab3..63389e7bb 100644
--- a/packages/language-server/src/ls-config.ts
+++ b/packages/language-server/src/ls-config.ts
@@ -478,16 +478,25 @@ export class LSConfigManager {
         };
     }
 
-    getTsUserPreferences(lang: TsUserConfigLang, workspacePath: string | null): ts.UserPreferences {
+    getTsUserPreferences(
+        lang: TsUserConfigLang,
+        normalizedWorkspacePath: string | null
+    ): ts.UserPreferences {
         const userPreferences = this.tsUserPreferences[lang];
 
-        if (!workspacePath || !userPreferences.autoImportFileExcludePatterns) {
+        if (!normalizedWorkspacePath || !userPreferences.autoImportFileExcludePatterns) {
             return userPreferences;
         }
 
-        let autoImportFileExcludePatterns = this.resolvedAutoImportExcludeCache.get(workspacePath);
+        let autoImportFileExcludePatterns =
+            this.resolvedAutoImportExcludeCache.get(normalizedWorkspacePath);
 
         if (!autoImportFileExcludePatterns) {
+            const version = ts.version.split('.');
+            const major = parseInt(version[0]);
+            const minor = parseInt(version[1]);
+
+            const gte5_4 = major > 5 || (major === 5 && minor >= 4);
             autoImportFileExcludePatterns = userPreferences.autoImportFileExcludePatterns.map(
                 (p) => {
                     // Normalization rules: https://github.com/microsoft/TypeScript/pull/49578
@@ -497,17 +506,20 @@ export class LSConfigManager {
                         return p;
                     }
 
-                    return path.join(
-                        workspacePath,
-                        p.startsWith('*')
-                            ? '/' + slashNormalized
-                            : isRelative
-                              ? p
-                              : '/**/' + slashNormalized
-                    );
+                    // https://github.com/microsoft/vscode/pull/202762
+                    // ts 5.4+ supports leading wildcards
+                    const wildcardPrefix = gte5_4 ? '' : path.parse(normalizedWorkspacePath).root;
+                    return p.startsWith('*')
+                        ? wildcardPrefix + slashNormalized
+                        : isRelative
+                          ? path.join(normalizedWorkspacePath, p)
+                          : wildcardPrefix + '**/' + slashNormalized;
                 }
             );
-            this.resolvedAutoImportExcludeCache.set(workspacePath, autoImportFileExcludePatterns);
+            this.resolvedAutoImportExcludeCache.set(
+                normalizedWorkspacePath,
+                autoImportFileExcludePatterns
+            );
         }
 
         return {
diff --git a/packages/language-server/test/plugins/typescript/features/preferences.test.ts b/packages/language-server/test/plugins/typescript/features/preferences.test.ts
index c794dc55b..b4c35f187 100644
--- a/packages/language-server/test/plugins/typescript/features/preferences.test.ts
+++ b/packages/language-server/test/plugins/typescript/features/preferences.test.ts
@@ -64,7 +64,14 @@ describe('ts user preferences', function () {
             typescript: { ...getPreferences(), ...preferences },
             javascript: { ...getPreferences(), ...preferences }
         });
-        return new LSAndTSDocResolver(docManager, [pathToUrl(testFilesDir)], configManager);
+        return {
+            lsAndTsDocResolver: new LSAndTSDocResolver(
+                docManager,
+                [pathToUrl(testFilesDir)],
+                configManager
+            ),
+            configManager
+        };
     }
 
     function getDefaultPreferences(): TsUserPreferencesConfig {
@@ -79,11 +86,8 @@ describe('ts user preferences', function () {
 
     it('provides auto import completion according to preferences', async () => {
         const { docManager, document } = setup('code-action.svelte');
-        const lsAndTsDocResolver = createLSAndTSDocResolver(docManager);
-        const completionProvider = new CompletionsProviderImpl(
-            lsAndTsDocResolver,
-            new LSConfigManager()
-        );
+        const { lsAndTsDocResolver, configManager } = createLSAndTSDocResolver(docManager);
+        const completionProvider = new CompletionsProviderImpl(lsAndTsDocResolver, configManager);
 
         const completions = await completionProvider.getCompletions(
             document,
@@ -102,15 +106,13 @@ describe('ts user preferences', function () {
         context: CodeActionContext
     ) {
         const { docManager, document } = setup(filename);
-        const lsAndTsDocResolver = createLSAndTSDocResolver(docManager);
-        const completionProvider = new CompletionsProviderImpl(
-            lsAndTsDocResolver,
-            new LSConfigManager()
-        );
+        const { lsAndTsDocResolver, configManager } = createLSAndTSDocResolver(docManager);
+        const completionProvider = new CompletionsProviderImpl(lsAndTsDocResolver, configManager);
+
         const codeActionProvider = new CodeActionsProviderImpl(
             lsAndTsDocResolver,
             completionProvider,
-            new LSConfigManager()
+            configManager
         );
 
         const codeAction = await codeActionProvider.getCodeActions(document, range, context);
@@ -137,7 +139,7 @@ describe('ts user preferences', function () {
 
     it('provides auto import suggestions according to preferences', async () => {
         const { docManager, document } = setup('code-action.svelte');
-        const lsAndTsDocResolver = createLSAndTSDocResolver(docManager, {
+        const { lsAndTsDocResolver, configManager } = createLSAndTSDocResolver(docManager, {
             suggest: {
                 autoImports: false,
                 includeAutomaticOptionalChainCompletions: undefined,
@@ -147,10 +149,7 @@ describe('ts user preferences', function () {
                 includeCompletionsWithSnippetText: undefined
             }
         });
-        const completionProvider = new CompletionsProviderImpl(
-            lsAndTsDocResolver,
-            new LSConfigManager()
-        );
+        const completionProvider = new CompletionsProviderImpl(lsAndTsDocResolver, configManager);
 
         const completions = await completionProvider.getCompletions(
             document,
@@ -165,14 +164,14 @@ describe('ts user preferences', function () {
 
     function setupImportModuleSpecifierEndingJs() {
         const { docManager, document } = setup('module-specifier-js.svelte');
-        const lsAndTsDocResolver = createLSAndTSDocResolver(docManager, {
+        const { lsAndTsDocResolver, configManager } = createLSAndTSDocResolver(docManager, {
             preferences: {
                 ...getDefaultPreferences(),
                 importModuleSpecifierEnding: 'js'
             }
         });
 
-        return { document, lsAndTsDocResolver };
+        return { document, lsAndTsDocResolver, configManager };
     }
 
     it('provides auto import for svelte component when importModuleSpecifierEnding is js', async () => {
@@ -248,16 +247,13 @@ describe('ts user preferences', function () {
 
     async function testExcludeDefinitionDir(pattern: string) {
         const { docManager, document } = setup('code-action.svelte');
-        const lsAndTsDocResolver = createLSAndTSDocResolver(docManager, {
+        const { lsAndTsDocResolver, configManager } = createLSAndTSDocResolver(docManager, {
             preferences: {
                 ...getDefaultPreferences(),
                 autoImportFileExcludePatterns: [pattern]
             }
         });
-        const completionProvider = new CompletionsProviderImpl(
-            lsAndTsDocResolver,
-            new LSConfigManager()
-        );
+        const completionProvider = new CompletionsProviderImpl(lsAndTsDocResolver, configManager);
 
         const completions = await completionProvider.getCompletions(
             document,
@@ -280,4 +276,24 @@ describe('ts user preferences', function () {
     it('exclude auto import (**/ pattern)', async () => {
         await testExcludeDefinitionDir('**/definition');
     });
+
+    it('exclude auto import outside of the root', async () => {
+        const { docManager, document } = setup('code-action-outside-root.svelte');
+        const { lsAndTsDocResolver, configManager } = createLSAndTSDocResolver(docManager, {
+            preferences: {
+                ...getDefaultPreferences(),
+                autoImportFileExcludePatterns: ['definitions.ts']
+            }
+        });
+        const completionProvider = new CompletionsProviderImpl(lsAndTsDocResolver, configManager);
+
+        const completions = await completionProvider.getCompletions(
+            document,
+            Position.create(4, 7)
+        );
+
+        const item = completions?.items.find((item) => item.label === 'blubb');
+
+        assert.equal(item, undefined);
+    });
 });
diff --git a/packages/language-server/test/plugins/typescript/testfiles/preferences/code-action-outside-root.svelte b/packages/language-server/test/plugins/typescript/testfiles/preferences/code-action-outside-root.svelte
new file mode 100644
index 000000000..cb38cfe93
--- /dev/null
+++ b/packages/language-server/test/plugins/typescript/testfiles/preferences/code-action-outside-root.svelte
@@ -0,0 +1,4 @@
+<script lang="ts">
+    import {} from '../definitions'
+    blu
+</script>
\ No newline at end of file