diff --git a/.vscode/cspell-devops-ext.txt b/.vscode/cspell-devops-ext.txt
index 8de1a582407..bac751ea95f 100644
--- a/.vscode/cspell-devops-ext.txt
+++ b/.vscode/cspell-devops-ext.txt
@@ -3,5 +3,6 @@ codepaths
 LASTEXITCODE
 tmrm
 toolrunner
+TOOLSDIRECTORY
 tsbuildinfo
-vsix
+vsix
\ No newline at end of file
diff --git a/eng/pipelines/release-azuredevops.yml b/eng/pipelines/release-azuredevops.yml
new file mode 100644
index 00000000000..4c623e54ea2
--- /dev/null
+++ b/eng/pipelines/release-azuredevops.yml
@@ -0,0 +1,25 @@
+# Continuous deployment trigger
+trigger:
+  branches:
+    include:
+      - main
+  paths:
+    include:
+      - ext/azuredevops
+      - eng/pipelines/release-azuredevops.yml
+
+pr:
+  paths:
+    include:
+      - ext/azuredevops
+      - eng/pipelines/release-azuredevops.yml
+
+extends: 
+  template: /eng/pipelines/templates/stages/1es-redirect.yml
+  parameters:
+    stages:
+    - template: /eng/pipelines/templates/stages/azuredevops-build-and-test.yml
+
+    - template: /eng/pipelines/templates/stages/azuredevops-sign.yml
+
+    - template: /eng/pipelines/templates/stages/azuredevops-publish-manual.yml
diff --git a/eng/pipelines/templates/jobs/azuredevops-build.yml b/eng/pipelines/templates/jobs/azuredevops-build.yml
new file mode 100644
index 00000000000..3511ee3513d
--- /dev/null
+++ b/eng/pipelines/templates/jobs/azuredevops-build.yml
@@ -0,0 +1,72 @@
+parameters:
+  - name: NameSuffix
+    type: string
+  - name: Pool
+    type: string
+  - name: ImageKey
+    type: string  
+    default: image
+  - name: OSVmImage
+    type: string
+  - name: OS
+    type: string
+  - name: Variables
+    type: object
+
+jobs:
+  - job: Build_${{ parameters.NameSuffix }}
+    displayName: Build ${{ parameters.NameSuffix }}
+
+    pool:
+      name: ${{ parameters.Pool }}
+      ${{ parameters.ImageKey }}: ${{ parameters.OSVmImage }}
+      os: ${{ parameters.OS }}
+
+    variables:
+      # TODO: What version of Node to use for Azure DevOps extension build?
+      NodeVersion: 20.x
+      ${{ insert }}: ${{ parameters.Variables }}
+
+    steps:
+      - checkout: self
+
+      - task: NodeTool@0
+        inputs:
+          versionSpec: $(NodeVersion)
+
+      - pwsh: |
+          npm i -g npm tfx-cli
+          npm ci
+        displayName: Install build tools and dependencies
+        workingDirectory: ext/azuredevops/setupAzd
+
+      # TODO: If private build, update vss-extension.json and other JSONs to 
+      # set a dev version
+
+      - task: PowerShell@2
+        inputs:
+          targetType: 'filePath'
+          filePath: '$(Build.SourcesDirectory)/ext/azuredevops/ci-test.ps1'
+          workingDirectory: '$(Build.SourcesDirectory)/ext/azuredevops'
+        displayName: Test
+
+      - task: PowerShell@2
+        inputs:
+          targetType: 'filePath'
+          filePath: '$(Build.SourcesDirectory)/ext/azuredevops/ci-package.ps1'
+          workingDirectory: '$(Build.SourcesDirectory)/ext/azuredevops'
+        displayName: Package Extension
+
+      - pwsh: |
+          Copy-Item `
+            -Path "$(Build.SourcesDirectory)/ext/azuredevops/*.vsix" `
+            -Destination "$(Build.ArtifactStagingDirectory)/"
+        condition: and(succeeded(), eq('true', variables['UploadArtifact']))
+        displayName: Copy VSIX to staging directory
+
+    templateContext:
+      outputs:
+        - output: pipelineArtifact
+          path: $(Build.ArtifactStagingDirectory)
+          condition: and(succeeded(), eq('true', variables['UploadArtifact']))
+          artifact: vsix
diff --git a/eng/pipelines/templates/stages/1es-redirect.yml b/eng/pipelines/templates/stages/1es-redirect.yml
index afdebbf7890..472550140c1 100644
--- a/eng/pipelines/templates/stages/1es-redirect.yml
+++ b/eng/pipelines/templates/stages/1es-redirect.yml
@@ -7,7 +7,7 @@ resources:
     - repository: azure-sdk-build-tools
       type: git
       name: internal/azure-sdk-build-tools
-      ref: refs/tags/azure-sdk-build-tools_20251112.1
+      ref: refs/tags/azure-sdk-build-tools_20260112.5
 
 parameters:
 - name: stages
diff --git a/eng/pipelines/templates/stages/azuredevops-build-and-test.yml b/eng/pipelines/templates/stages/azuredevops-build-and-test.yml
new file mode 100644
index 00000000000..5dba44f1001
--- /dev/null
+++ b/eng/pipelines/templates/stages/azuredevops-build-and-test.yml
@@ -0,0 +1,45 @@
+parameters:
+  - name: BuildMatrix
+    type: object
+    default:
+      Windows:
+        Pool: $(WINDOWSPOOL)
+        ImageKey: image
+        OSVmImage: $(WINDOWSVMIMAGE)
+        OS: windows
+        Variables: {}
+
+      Linux:
+        Pool: $(LINUXPOOL)
+        ImageKey: image
+        OSVmImage: $(LINUXVMIMAGE)
+        OS: linux
+        Variables: 
+          UploadArtifact: 'true'
+          Codeql.Enabled: true
+          Codeql.SkipTaskAutoInjection: false
+          Codeql.BuildIdentifier: azuredevops_linux
+
+      Mac:
+        Pool: Azure Pipelines
+        ImageKey: vmImage
+        OSVmImage: $(MACVMIMAGE)
+        OS: macOS
+        Variables: {}
+
+stages:
+  - stage: BuildAndTest
+    variables: 
+      - template: /eng/pipelines/templates/variables/globals.yml
+      - template: /eng/pipelines/templates/variables/image.yml
+
+    jobs:
+      - ${{ each build in parameters.BuildMatrix }}:
+          - template: /eng/pipelines/templates/jobs/azuredevops-build.yml
+            parameters:
+              NameSuffix: ${{ build.key }}
+              Pool: ${{ build.value.Pool }}
+              ImageKey: ${{ build.value.ImageKey }}
+              OSVmImage: ${{ build.value.OSVmImage }}
+              OS: ${{ build.value.OS }}
+              Variables: ${{ build.value.Variables }}
diff --git a/eng/pipelines/templates/stages/azuredevops-publish-manual.yml b/eng/pipelines/templates/stages/azuredevops-publish-manual.yml
new file mode 100644
index 00000000000..420e49b4425
--- /dev/null
+++ b/eng/pipelines/templates/stages/azuredevops-publish-manual.yml
@@ -0,0 +1,64 @@
+stages:
+  - stage: PublishManual
+    dependsOn: Sign
+    condition: >-
+      and(
+        succeeded(),
+        ne(variables['Skip.Release'], 'true'),
+        or(
+          eq('Manual', variables['BuildReasonOverride']),
+          and(
+            eq('', variables['BuildReasonOverride']),
+            eq(variables['Build.Reason'], 'Manual')
+          )
+        )
+      )
+
+    variables:
+      - template: /eng/pipelines/templates/variables/globals.yml
+      - template: /eng/pipelines/templates/variables/image.yml
+
+    jobs:
+      - deployment: Publish_Release
+        environment: package-publish
+        pool:
+          name: azsdk-pool
+          image: ubuntu-24.04
+          os: linux
+
+        templateContext:
+          type: releaseJob
+          isProduction: true
+          inputs:
+            - input: pipelineArtifact
+              artifactName: signed
+              targetPath: signed
+
+        strategy:
+          runOnce:
+            deploy:
+              steps:
+                - pwsh: | 
+                    $files = Get-ChildItem -Path "$(Build.SourcesDirectory)/signed/*.vsix"
+                    if ($files -is [Array]) { 
+                      if ($files.Count -gt 1) {
+                        Write-Host "More than one VSIX file found in signed artifact."
+                        exit 1
+                      }
+                      $vsixFile = $files[0].FullName
+                    } else {
+                      $vsixFile = $files.FullName
+                    }
+
+                    Write-Host "##vso[task.setvariable variable=VSIX_FILE]$vsixFile"
+                  displayName: Get VSIX Filename
+
+                - task: 1ES.PublishAzureDevOpsExtension@1
+                  displayName: Publish Extension
+                  inputs:
+                    targetPath: "$(Build.SourcesDirectory)/signed"
+                    connectedServiceNameAzureRM: azure-sdk-vsmarketplace
+                    fileType: vsix
+                    vsixFile: "$(VSIX_FILE)"
+                    useV5: true
+                    validateExtension: false
diff --git a/eng/pipelines/templates/stages/azuredevops-sign.yml b/eng/pipelines/templates/stages/azuredevops-sign.yml
new file mode 100644
index 00000000000..4f34fc615c9
--- /dev/null
+++ b/eng/pipelines/templates/stages/azuredevops-sign.yml
@@ -0,0 +1,54 @@
+stages:
+  - stage: Sign
+    dependsOn: BuildAndTest
+    variables: 
+      - template: /eng/pipelines/templates/variables/globals.yml
+      - template: /eng/pipelines/templates/variables/image.yml
+    
+    jobs:
+      - job: Sign
+        ${{ if in(variables['Build.Reason'], 'IndividualCI', 'BatchedCI', 'Manual') }}:
+          displayName: Sign
+        ${{ else }}:
+          displayName: SKIP Signing
+        
+        pool:
+          name: $(WINDOWSPOOL)
+          image: $(WINDOWSVMIMAGE)
+          os: windows
+
+        steps:
+          - task: DownloadPipelineArtifact@2
+            inputs:
+              artifact: vsix
+              path: vsix
+
+          - ${{ if in(variables['Build.Reason'], 'IndividualCI', 'BatchedCI', 'Manual') }}:
+            - template: pipelines/steps/azd-azdo-extension-signing.yml@azure-sdk-build-tools
+              parameters:
+                Path: $(Build.SourcesDirectory)\vsix
+                Pattern: '*.vsix'
+
+          - ${{ else }}:
+            - pwsh: Write-Host "Skipping signing. Build reason - $(Build.Reason)"
+              displayName: Signing process skipped for non-release build
+
+          - pwsh: |
+              New-Item -ItemType Directory -Path signed
+              Copy-Item vsix/*.vsix signed/
+            displayName: Copy signing outputs
+            condition: always()
+
+        templateContext:
+          outputs:
+            - output: pipelineArtifact
+              condition: succeeded()
+              displayName: Publish Signed Artifacts
+              artifact: signed
+              path: signed/
+
+            - output: pipelineArtifact
+              condition: failed()
+              displayName: Publish failed Signed Artifacts
+              artifact: signed-FailedAttempt$(System.JobAttempt)
+              path: signed/
diff --git a/ext/azuredevops/ci-package.ps1 b/ext/azuredevops/ci-package.ps1
new file mode 100644
index 00000000000..c22170da89d
--- /dev/null
+++ b/ext/azuredevops/ci-package.ps1
@@ -0,0 +1,23 @@
+#!/usr/bin/env pwsh
+
+$originalLocation = Get-Location 
+
+try {
+  Set-Location $PSScriptRoot 
+  
+  Write-Host "Running tsc build"
+  npm --prefix $PSScriptRoot/setupAzd/ run build
+  if ($LASTEXITCODE) {
+    Write-Host "Build failed"  
+    exit $LASTEXITCODE
+  }
+  Write-Host "Building Azure DevOps extension package"
+  tfx extension create --manifest-globs vss-extension.json
+  if ($LASTEXITCODE) {
+    Write-Host "Packaging failed"  
+    exit $LASTEXITCODE
+  }
+
+} finally { 
+  Set-Location $originalLocation
+}
diff --git a/ext/azuredevops/ci-test.ps1 b/ext/azuredevops/ci-test.ps1
new file mode 100644
index 00000000000..518cc2bdbc6
--- /dev/null
+++ b/ext/azuredevops/ci-test.ps1
@@ -0,0 +1,2 @@
+#!/usr/bin/env pwsh
+npm --prefix $PSScriptRoot/setupAzd/ test
diff --git a/ext/azuredevops/setupAzd/tests/_suite.ts b/ext/azuredevops/setupAzd/tests/_suite.ts
index 935a95462f8..a14a0ae6d97 100644
--- a/ext/azuredevops/setupAzd/tests/_suite.ts
+++ b/ext/azuredevops/setupAzd/tests/_suite.ts
@@ -5,15 +5,20 @@ import * as ttm from 'azure-pipelines-task-lib/mock-test';
 describe('Setup azd task tests', function () {
 
     before(function() {
-        // Setup before tests
+        // Disable tool download for tests to prevent actual network calls
+        process.env.AGENT_TOOLSDIRECTORY = '/tmp/test-tools';
+        process.env.RUNNER_TOOL_CACHE = '/tmp/test-tools';
     });
 
     after(() => {
         // Cleanup after tests
+        delete process.env.AGENT_TOOLSDIRECTORY;
+        delete process.env.RUNNER_TOOL_CACHE;
     });
 
     it('should succeed with default version (latest)', function(done: Mocha.Done) {
-        this.timeout(5000);
+        // Increased timeout for macOS where tool cache operations can take longer
+        this.timeout(30000);
 
         const tp: string = path.join(__dirname, 'success.js');
         const tr: ttm.MockTestRunner = new ttm.MockTestRunner(tp);
@@ -30,7 +35,8 @@ describe('Setup azd task tests', function () {
     });
 
     it('should succeed with specific version', function(done: Mocha.Done) {
-        this.timeout(5000);
+        // Increased timeout for macOS compatibility
+        this.timeout(30000);
 
         const tp: string = path.join(__dirname, 'successVersion.js');
         const tr: ttm.MockTestRunner = new ttm.MockTestRunner(tp);
@@ -47,7 +53,8 @@ describe('Setup azd task tests', function () {
     });
 
     it('should fail with invalid version', function(done: Mocha.Done) {
-        this.timeout(5000);
+        // Increased timeout for macOS compatibility
+        this.timeout(30000);
 
         const tp: string = path.join(__dirname, 'invalidVersion.js');
         const tr: ttm.MockTestRunner = new ttm.MockTestRunner(tp);