diff --git a/extensions/mssql/src/publishProject/projectUtils.ts b/extensions/mssql/src/publishProject/projectUtils.ts
index 16e7dc4cc9..76c39ee8ed 100644
--- a/extensions/mssql/src/publishProject/projectUtils.ts
+++ b/extensions/mssql/src/publishProject/projectUtils.ts
@@ -140,9 +140,12 @@ export async function readProjectProperties(
         // Calculate DACPAC output path
         const projectDir = path.dirname(projectFilePath);
         const projectName = path.basename(projectFilePath, path.extname(projectFilePath));
-        const outputPath = path.isAbsolute(result.outputPath)
-            ? result.outputPath
-            : path.join(projectDir, result.outputPath);
+        // Normalize path separators for cross-platform compatibility
+        // path.normalize doesn't convert backslashes, so using a regex replace here
+        const normalizedOutputPath = result.outputPath.replace(/\\/g, "/");
+        const outputPath = path.isAbsolute(normalizedOutputPath)
+            ? normalizedOutputPath
+            : path.join(projectDir, normalizedOutputPath);
         const dacpacOutputPath = path.join(
             outputPath,
             `${projectName}${constants.DacpacExtension}`,
diff --git a/extensions/mssql/test/unit/projectUtils.test.ts b/extensions/mssql/test/unit/projectUtils.test.ts
new file mode 100644
index 0000000000..ed7d1b48d7
--- /dev/null
+++ b/extensions/mssql/test/unit/projectUtils.test.ts
@@ -0,0 +1,106 @@
+/*---------------------------------------------------------------------------------------------
+ *  Copyright (c) Microsoft Corporation. All rights reserved.
+ *  Licensed under the MIT License. See License.txt in the project root for license information.
+ *--------------------------------------------------------------------------------------------*/
+
+import { expect } from "chai";
+import * as sinon from "sinon";
+import * as path from "path";
+import { readProjectProperties } from "../../src/publishProject/projectUtils";
+import { SqlProjectsService } from "../../src/services/sqlProjectsService";
+
+suite("projectUtils Tests", () => {
+    let sandbox: sinon.SinonSandbox;
+    let mockSqlProjectsService: sinon.SinonStubbedInstance<SqlProjectsService>;
+
+    setup(() => {
+        sandbox = sinon.createSandbox();
+        mockSqlProjectsService = sandbox.createStubInstance(SqlProjectsService);
+    });
+
+    teardown(() => {
+        sandbox.restore();
+    });
+
+    test("readProjectProperties normalizes Windows backslashes in outputPath on Unix", async () => {
+        const projectPath = "/home/user/project/TestProject.sqlproj";
+
+        // Mock getProjectProperties to return Windows-style path with backslashes
+        mockSqlProjectsService.getProjectProperties.resolves({
+            success: true,
+            outputPath: "bin\\Debug", // Windows-style path with backslashes
+            databaseSchemaProvider: "Microsoft.Data.Tools.Schema.Sql.Sql150DatabaseSchemaProvider",
+        } as any);
+
+        const result = await readProjectProperties(mockSqlProjectsService, projectPath);
+
+        expect(result).to.exist;
+        expect(result?.dacpacOutputPath).to.exist;
+
+        // The dacpac path should use forward slashes, not backslashes
+        expect(result?.dacpacOutputPath).to.not.include("\\");
+        expect(result?.dacpacOutputPath).to.include("/");
+
+        // Verify the path is constructed correctly with forward slashes
+        const expectedPath = path.join("/home/user/project", "bin/Debug", "TestProject.dacpac");
+        expect(result?.dacpacOutputPath).to.equal(expectedPath);
+    });
+
+    test("readProjectProperties handles absolute paths", async () => {
+        const projectPath = "/home/user/project/TestProject.sqlproj";
+        const absoluteOutputPath = "/absolute/output/path";
+
+        mockSqlProjectsService.getProjectProperties.resolves({
+            success: true,
+            outputPath: absoluteOutputPath,
+            databaseSchemaProvider: "Microsoft.Data.Tools.Schema.Sql.Sql150DatabaseSchemaProvider",
+        } as any);
+
+        const result = await readProjectProperties(mockSqlProjectsService, projectPath);
+
+        expect(result).to.exist;
+        expect(result?.dacpacOutputPath).to.exist;
+
+        // For absolute paths, should use the absolute path directly
+        const expectedPath = path.join(absoluteOutputPath, "TestProject.dacpac");
+        expect(result?.dacpacOutputPath).to.equal(expectedPath);
+    });
+
+    test("readProjectProperties normalizes Windows backslashes in absolute paths", async () => {
+        const projectPath = "/home/user/project/TestProject.sqlproj";
+        // Absolute path with Windows-style backslashes (edge case but should be handled)
+        const absoluteOutputPath = "C:\\absolute\\output\\path";
+
+        mockSqlProjectsService.getProjectProperties.resolves({
+            success: true,
+            outputPath: absoluteOutputPath,
+            databaseSchemaProvider: "Microsoft.Data.Tools.Schema.Sql.Sql150DatabaseSchemaProvider",
+        } as any);
+
+        const result = await readProjectProperties(mockSqlProjectsService, projectPath);
+
+        expect(result).to.exist;
+        expect(result?.dacpacOutputPath).to.exist;
+
+        // Even for absolute paths, backslashes should be normalized
+        expect(result?.dacpacOutputPath).to.not.include("\\");
+    });
+
+    test("readProjectProperties handles relative paths with forward slashes", async () => {
+        const projectPath = "/home/user/project/TestProject.sqlproj";
+
+        mockSqlProjectsService.getProjectProperties.resolves({
+            success: true,
+            outputPath: "bin/Debug", // Unix-style path
+            databaseSchemaProvider: "Microsoft.Data.Tools.Schema.Sql.Sql150DatabaseSchemaProvider",
+        } as any);
+
+        const result = await readProjectProperties(mockSqlProjectsService, projectPath);
+
+        expect(result).to.exist;
+        expect(result?.dacpacOutputPath).to.exist;
+
+        const expectedPath = path.join("/home/user/project", "bin/Debug", "TestProject.dacpac");
+        expect(result?.dacpacOutputPath).to.equal(expectedPath);
+    });
+});