diff --git a/assets/wix/Product.wxs b/assets/wix/Product.wxs
index 54979ecb51c..674e67fc860 100644
--- a/assets/wix/Product.wxs
+++ b/assets/wix/Product.wxs
@@ -154,6 +154,7 @@
       <ComponentRef Id="SharedRegistryEntries"/>
       <ComponentRef Id="SetPath"/>
       <ComponentRef Id="Telemetry"/>
+      <ComponentRef Id="DisableTelemetry"/>
       <ComponentRef Id="ExplorerContextMenu"/>
       <ComponentRef Id="PowerShellFileContextMenu"/>
     </Feature>
@@ -213,6 +214,10 @@
                   <RegistryValue Type="string" Value="[VersionFolder]pwsh.exe" KeyPath="yes"/>
               </RegistryKey>
             </Component>
+            <Component Id="DisableTelemetry" Guid="{E86F5C91-3721-4C5C-A31F-1F0A5A468573}" KeyPath="yes">
+              <Condition>DISABLE_TELEMETRY</Condition>
+              <Environment Id="PowerShellTelemetryOptout" Action="set" Name="POWERSHELL_TELEMETRY_OPTOUT" Permanent="no" System="yes" Value="1"/>
+            </Component>
             <!-- add ourselves to %PATH% so pwsh.exe can be started from Windows PowerShell or cmd.exe -->
             <Component Id="SetPath">
               <Condition>ADD_PATH=1</Condition>
@@ -320,7 +325,8 @@
       <Control Id="AddToPathCheckBox" Type="CheckBox" X="20" Y="60" Width="290" Height="17" Property="ADD_PATH" CheckBoxValue="0" Text="Add $(var.ProductName) to Path Environment Variable"/>
       <Control Id="RegisterManifestCheckBox" Type="CheckBox" X="20" Y="80" Width="290" Height="17" Property="REGISTER_MANIFEST" CheckBoxValue="0" Text="Register Windows Event Logging Manifest"/>
       <Control Id="EnablePSRemotingCheckBox" Type="CheckBox" X="20" Y="100" Width="290" Height="17" Property="ENABLE_PSREMOTING" CheckBoxValue="0" Text="Enable $(var.ProductName) remoting"/>
-      <Control Id="ContextMenuOpenPowerShell" Type="CheckBox" X="20" Y="120" Width="290" Height="17" Property="ADD_EXPLORER_CONTEXT_MENU_OPENPOWERSHELL" CheckBoxValue="0" Text="Add '$(var.ExplorerContextSubMenuDialogText)' context menus to Explorer"/>
+      <Control Id="DisableTelemetry" Type="CheckBox" X="20" Y="120" Width="290" Height="17" Property="DISABLE_TELEMETRY" CheckBoxValue="0" Text="Disable Telemetry (Reboot or Restart of processes may be required)" ToolTip="Sets environment variable POWERSHELL_TELEMETRY_OPTOUT to 1, see https://docs.microsoft.com/powershell/module/microsoft.powershell.core/about/about_telemetry"/>
+      <Control Id="ContextMenuOpenPowerShell" Type="CheckBox" X="20" Y="140" Width="290" Height="17" Property="ADD_EXPLORER_CONTEXT_MENU_OPENPOWERSHELL" CheckBoxValue="0" Text="Add '$(var.ExplorerContextSubMenuDialogText)' context menus to Explorer"/>
       <Control Id="ContextMenuRunPowerShell" Type="CheckBox" X="20" Y="140" Width="290" Height="17" Property="ADD_FILE_CONTEXT_MENU_RUNPOWERSHELL" CheckBoxValue="0" Text="Add '$(var.PowerShellFileContextSubMenuDialogText)' context menu for PowerShell files"/>
       <Control Id="LicenseLink" Type="Hyperlink" X="20" Y="190" Width="214" Height="17">
         <Text><![CDATA[<a href="https://github.com/PowerShell/PowerShell/blob/master/LICENSE.txt">The application is distributed under the MIT license.</a>]]></Text>
diff --git a/test/packaging/windows/msi.tests.ps1 b/test/packaging/windows/msi.tests.ps1
index 0ee34ca482c..71254d287bc 100644
--- a/test/packaging/windows/msi.tests.ps1
+++ b/test/packaging/windows/msi.tests.ps1
@@ -301,5 +301,43 @@ Describe -Name "Windows MSI" -Fixture {
                 Invoke-MsiExec -Uninstall -MsiPath $msiX64Path
             } | Should -Not -Throw
         }
+
+        Context "Disable Telemetry" {
+            It "MSI should set POWERSHELL_TELEMETRY_OPTOUT env variable when MSI property DISABLE_TELEMETRY is set to 1" -Skip:(!(Test-Elevated)) {
+                try {
+                    $originalValue = [System.Environment]::GetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', [System.EnvironmentVariableTarget]::Machine)
+                    [System.Environment]::SetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', '0', [System.EnvironmentVariableTarget]::Machine)
+                    {
+                        Invoke-MsiExec -Install -MsiPath $msiX64Path -Properties @{DISABLE_TELEMETRY = 1 }
+                    } | Should -Not -Throw
+                    [System.Environment]::GetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', [System.EnvironmentVariableTarget]::Machine) |
+                        Should -Be 1
+                }
+                finally {
+                    [System.Environment]::SetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', $originalValue, [System.EnvironmentVariableTarget]::Machine)
+                    {
+                        Invoke-MsiExec -Uninstall -MsiPath $msiX64Path
+                    } | Should -Not -Throw
+                }
+            }
+
+            It "MSI should not change POWERSHELL_TELEMETRY_OPTOUT env variable when MSI property DISABLE_TELEMETRY not set" -Skip:(!(Test-Elevated)) {
+                try {
+                    $originalValue = [System.Environment]::GetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', [System.EnvironmentVariableTarget]::Machine)
+                    [System.Environment]::SetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', 'untouched', [System.EnvironmentVariableTarget]::Machine)
+                    {
+                        Invoke-MsiExec -Install -MsiPath $msiX64Path
+                    } | Should -Not -Throw
+                    [System.Environment]::GetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', [System.EnvironmentVariableTarget]::Machine) |
+                        Should -Be 'untouched'
+                }
+                finally {
+                    [System.Environment]::SetEnvironmentVariable('POWERSHELL_TELEMETRY_OPTOUT', $originalValue, [System.EnvironmentVariableTarget]::Machine)
+                    {
+                        Invoke-MsiExec -Uninstall -MsiPath $msiX64Path
+                    } | Should -Not -Throw
+                }
+            }
+        }
     }
 }