diff --git a/src/core/task/Task.ts b/src/core/task/Task.ts
index f7d4c41e5d..719ba879d8 100644
--- a/src/core/task/Task.ts
+++ b/src/core/task/Task.ts
@@ -1453,6 +1453,8 @@ export class Task extends EventEmitter<TaskEvents> implements TaskLike {
 		try {
 			// Release any terminals associated with this task.
 			TerminalRegistry.releaseTerminalsForTask(this.taskId)
+			// Clear the lastUsedTerminal reference to prevent memory leaks
+			this.lastUsedTerminal = undefined
 		} catch (error) {
 			console.error("Error releasing terminals:", error)
 		}
diff --git a/src/core/task/__tests__/Task.dispose.test.ts b/src/core/task/__tests__/Task.dispose.test.ts
index 850b050fb8..6c42cc3f5f 100644
--- a/src/core/task/__tests__/Task.dispose.test.ts
+++ b/src/core/task/__tests__/Task.dispose.test.ts
@@ -198,4 +198,25 @@ describe("Task dispose method", () => {
 		// Verify total listener count is 0
 		expect(task.eventNames().length).toBe(0)
 	})
+
+	test("should clear lastUsedTerminal reference to prevent memory leaks", () => {
+		// Mock a terminal object
+		const mockTerminal = {
+			id: "test-terminal-id",
+			name: "Test Terminal",
+			dispose: vi.fn(),
+		}
+
+		// Set lastUsedTerminal on the task
+		;(task as any).lastUsedTerminal = mockTerminal
+
+		// Verify it's set
+		expect((task as any).lastUsedTerminal).toBe(mockTerminal)
+
+		// Call dispose
+		task.dispose()
+
+		// Verify lastUsedTerminal is cleared
+		expect((task as any).lastUsedTerminal).toBeUndefined()
+	})
 })