diff --git a/extensions/ql-vscode/src/common/config-template.ts b/extensions/ql-vscode/src/common/config-template.ts
new file mode 100644
index 000000000..dfc948d9b
--- /dev/null
+++ b/extensions/ql-vscode/src/common/config-template.ts
@@ -0,0 +1,57 @@
+// Based on https://github.com/microsoft/vscode/blob/edfd5b8ba54d50f3f5c2ebee877af088803def88/src/vs/base/common/labels.ts#L316C1-L400
+
+/**
+ * Helper to insert values for specific template variables into the string. E.g. "this ${is} a ${template}" can be
+ * passed to this function together with an object that maps "is" and "template" to strings to have them replaced.
+ *
+ * @param template string to which template is applied
+ * @param values the values of the templates to use
+ */
+export function substituteConfigVariables(
+  template: string,
+  values: {
+    [key: string]: string | undefined | null;
+  },
+): string {
+  const segments: string[] = [];
+
+  let inVariable = false;
+  let currentValue = "";
+  for (const char of template) {
+    // Beginning of variable
+    if (char === "$" || (inVariable && char === "{")) {
+      if (currentValue) {
+        segments.push(currentValue);
+      }
+
+      currentValue = "";
+      inVariable = true;
+    }
+
+    // End of variable
+    else if (char === "}" && inVariable) {
+      const resolved = values[currentValue];
+
+      // Variable
+      if (resolved && resolved.length > 0) {
+        segments.push(resolved);
+      }
+      // If the variable, doesn't exist, we discard it (i.e. replace it by the empty string)
+
+      currentValue = "";
+      inVariable = false;
+    }
+
+    // Text or Variable Name
+    else {
+      currentValue += char;
+    }
+  }
+
+  // Tail
+  if (currentValue && !inVariable) {
+    segments.push(currentValue);
+  }
+
+  return segments.join("");
+}
diff --git a/extensions/ql-vscode/test/unit-tests/common/config-template.test.ts b/extensions/ql-vscode/test/unit-tests/common/config-template.test.ts
new file mode 100644
index 000000000..f829c27d2
--- /dev/null
+++ b/extensions/ql-vscode/test/unit-tests/common/config-template.test.ts
@@ -0,0 +1,79 @@
+import { substituteConfigVariables } from "../../../src/common/config-template";
+
+describe("substituteConfigVariables", () => {
+  const values = {
+    userHome: "/home/your-username",
+    workspaceFolder: "/home/your-username/your-project",
+    workspaceFolderBasename: "your-project",
+    pathSeparator: "/",
+    owner: "github",
+    name: "vscode-codeql",
+    language: "java",
+  };
+
+  const testCases = [
+    {
+      template: ".github/codeql/extensions/${name}-${language}",
+      expected: ".github/codeql/extensions/vscode-codeql-java",
+    },
+    {
+      template: "${owner}/${name}-${language}",
+      expected: "github/vscode-codeql-java",
+    },
+    {
+      template: "models/${group}.model.yml",
+      expected: "models/.model.yml",
+    },
+    {
+      template:
+        "${workspaceFolder}${pathSeparator}.github/workflows/codeql-analysis.yml",
+      expected:
+        "/home/your-username/your-project/.github/workflows/codeql-analysis.yml",
+    },
+    {
+      template:
+        "${workspaceFolder/.github/codeql/extensions/${name}-${language}",
+      expected: "workspaceFolder/.github/codeql/extensions/vscode-codeql-java",
+    },
+    {
+      template: "}${workspaceFolder}/.github/workflows/codeql-analysis.yml",
+      expected:
+        "}/home/your-username/your-project/.github/workflows/codeql-analysis.yml",
+    },
+    {
+      template: "Foo Bar",
+      expected: "Foo Bar",
+    },
+    {
+      template: "Foo${}Bar",
+      expected: "FooBar",
+    },
+    {
+      template: "$FooBar",
+      expected: "",
+    },
+    {
+      template: "}FooBar",
+      expected: "}FooBar",
+    },
+    {
+      template: "Foo ${name} Bar",
+      expected: "Foo vscode-codeql Bar",
+    },
+    {
+      template: "Foo ${name} Bar ${owner}",
+      expected: "Foo vscode-codeql Bar github",
+    },
+    {
+      template: "Foo ${nmae} Bar ${owner}",
+      expected: "Foo  Bar github",
+    },
+  ];
+
+  test.each(testCases)(
+    "result of $template is $expected",
+    ({ template, expected }) => {
+      expect(substituteConfigVariables(template, values)).toEqual(expected);
+    },
+  );
+});