diff --git a/package.json b/package.json
index f7ee5e009a..e08497a808 100644
--- a/package.json
+++ b/package.json
@@ -182,6 +182,15 @@
           "default": [],
           "description": "Per-workspace list of module directories for the language server to exclude"
         },
+        "terraform-ls.ignoreDirectoryNames": {
+          "scope": "resource",
+          "type": "array",
+          "items": {
+            "type": "string"
+          },
+          "default": [],
+          "description": "Per-workspace list of directory names for the language server to ignore when indexing files"
+        },
         "terraform-ls.experimentalFeatures": {
           "scope": "resource",
           "type": "object",
diff --git a/src/clientHandler.ts b/src/clientHandler.ts
index f789f786af..ea56a81883 100644
--- a/src/clientHandler.ts
+++ b/src/clientHandler.ts
@@ -112,6 +112,7 @@ export class ClientHandler {
     let terraformLogFilePath: string;
     let excludeModulePaths: string[];
     let enableReferenceCountCodeLens: boolean;
+    let ignoreDirectoryNames: string[];
     let documentSelector: DocumentSelector;
     let outputChannel: vscode.OutputChannel;
     if (location) {
@@ -129,6 +130,7 @@ export class ClientHandler {
       rootModulePaths = config('terraform-ls', wsFolder).get('rootModules');
       excludeModulePaths = config('terraform-ls', wsFolder).get('excludeRootModules');
       enableReferenceCountCodeLens = config('terraform', wsFolder).get('enableReferenceCountCodeLens');
+      ignoreDirectoryNames = config('terraform-ls', wsFolder).get('ignoreDirectoryNames');
       outputChannel = vscode.window.createOutputChannel(channelName);
       outputChannel.appendLine(`Launching language server: ${cmd} ${serverArgs.join(' ')} for folder: ${location}`);
     } else {
@@ -142,6 +144,7 @@ export class ClientHandler {
       rootModulePaths = config('terraform-ls').get('rootModules');
       excludeModulePaths = config('terraform-ls').get('excludeRootModules');
       enableReferenceCountCodeLens = config('terraform').get('enableReferenceCountCodeLens');
+      ignoreDirectoryNames = config('terraform-ls').get('ignoreDirectoryNames');
       outputChannel = vscode.window.createOutputChannel(channelName);
       outputChannel.appendLine(`Launching language server: ${cmd} ${serverArgs.join(' ')}`);
     }
@@ -169,6 +172,9 @@ export class ClientHandler {
     if (excludeModulePaths.length > 0) {
       initializationOptions = Object.assign(initializationOptions, { excludeModulePaths });
     }
+    if (ignoreDirectoryNames.length > 0) {
+      initializationOptions = Object.assign(initializationOptions, { ignoreDirectoryNames });
+    }
 
     const executable: Executable = {
       command: cmd,