diff --git a/packages/core/src/auth/activation.ts b/packages/core/src/auth/activation.ts
index 5c48124c468..8305610dff7 100644
--- a/packages/core/src/auth/activation.ts
+++ b/packages/core/src/auth/activation.ts
@@ -12,7 +12,7 @@ import { isAmazonQ, isSageMaker } from '../shared/extensionUtilities'
 import { getLogger } from '../shared/logger/logger'
 import { getErrorMsg } from '../shared/errors'
 
-interface SagemakerCookie {
+export interface SagemakerCookie {
     authMode?: 'Sso' | 'Iam'
 }
 
diff --git a/packages/core/src/test/auth/activation.test.ts b/packages/core/src/test/auth/activation.test.ts
new file mode 100644
index 00000000000..f203033acba
--- /dev/null
+++ b/packages/core/src/test/auth/activation.test.ts
@@ -0,0 +1,146 @@
+/*!
+ * Copyright Amazon.com, Inc. or its affiliates. All Rights Reserved.
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import * as vscode from 'vscode'
+import * as sinon from 'sinon'
+import assert from 'assert'
+import { initialize, SagemakerCookie } from '../../auth/activation'
+import { LoginManager } from '../../auth/deprecated/loginManager'
+import * as extensionUtilities from '../../shared/extensionUtilities'
+import * as authUtils from '../../auth/utils'
+import * as errors from '../../shared/errors'
+
+describe('auth/activation', function () {
+    let sandbox: sinon.SinonSandbox
+    let mockLoginManager: LoginManager
+    let executeCommandStub: sinon.SinonStub
+    let isAmazonQStub: sinon.SinonStub
+    let isSageMakerStub: sinon.SinonStub
+    let initializeCredentialsProviderManagerStub: sinon.SinonStub
+    let getErrorMsgStub: sinon.SinonStub
+    let mockLogger: any
+
+    beforeEach(function () {
+        sandbox = sinon.createSandbox()
+
+        // Create mocks
+        mockLoginManager = {
+            login: sandbox.stub(),
+            logout: sandbox.stub(),
+        } as any
+
+        mockLogger = {
+            warn: sandbox.stub(),
+            info: sandbox.stub(),
+            error: sandbox.stub(),
+            debug: sandbox.stub(),
+        }
+
+        // Stub external dependencies
+        executeCommandStub = sandbox.stub(vscode.commands, 'executeCommand')
+        isAmazonQStub = sandbox.stub(extensionUtilities, 'isAmazonQ')
+        isSageMakerStub = sandbox.stub(extensionUtilities, 'isSageMaker')
+        initializeCredentialsProviderManagerStub = sandbox.stub(authUtils, 'initializeCredentialsProviderManager')
+        getErrorMsgStub = sandbox.stub(errors, 'getErrorMsg')
+    })
+
+    afterEach(function () {
+        sandbox.restore()
+    })
+
+    describe('initialize', function () {
+        it('should not execute sagemaker.parseCookies when not in AmazonQ and SageMaker environment', async function () {
+            isAmazonQStub.returns(false)
+            isSageMakerStub.returns(false)
+
+            await initialize(mockLoginManager)
+
+            assert.ok(!executeCommandStub.called)
+            assert.ok(!initializeCredentialsProviderManagerStub.called)
+        })
+
+        it('should not execute sagemaker.parseCookies when only in AmazonQ environment', async function () {
+            isAmazonQStub.returns(true)
+            isSageMakerStub.returns(false)
+
+            await initialize(mockLoginManager)
+
+            assert.ok(!executeCommandStub.called)
+            assert.ok(!initializeCredentialsProviderManagerStub.called)
+        })
+
+        it('should not execute sagemaker.parseCookies when only in SageMaker environment', async function () {
+            isAmazonQStub.returns(false)
+            isSageMakerStub.returns(true)
+
+            await initialize(mockLoginManager)
+
+            assert.ok(!executeCommandStub.called)
+            assert.ok(!initializeCredentialsProviderManagerStub.called)
+        })
+
+        it('should execute sagemaker.parseCookies when in both AmazonQ and SageMaker environment', async function () {
+            isAmazonQStub.returns(true)
+            isSageMakerStub.returns(true)
+            executeCommandStub.withArgs('sagemaker.parseCookies').resolves({ authMode: 'Sso' } as SagemakerCookie)
+
+            await initialize(mockLoginManager)
+
+            assert.ok(executeCommandStub.calledOnceWith('sagemaker.parseCookies'))
+            assert.ok(!initializeCredentialsProviderManagerStub.called)
+        })
+
+        it('should initialize credentials provider manager when authMode is not Sso', async function () {
+            isAmazonQStub.returns(true)
+            isSageMakerStub.returns(true)
+            executeCommandStub.withArgs('sagemaker.parseCookies').resolves({ authMode: 'Iam' } as SagemakerCookie)
+
+            await initialize(mockLoginManager)
+
+            assert.ok(executeCommandStub.calledOnceWith('sagemaker.parseCookies'))
+            assert.ok(initializeCredentialsProviderManagerStub.calledOnce)
+        })
+
+        it('should initialize credentials provider manager when authMode is undefined', async function () {
+            isAmazonQStub.returns(true)
+            isSageMakerStub.returns(true)
+            executeCommandStub.withArgs('sagemaker.parseCookies').resolves({} as SagemakerCookie)
+
+            await initialize(mockLoginManager)
+
+            assert.ok(executeCommandStub.calledOnceWith('sagemaker.parseCookies'))
+            assert.ok(initializeCredentialsProviderManagerStub.calledOnce)
+        })
+
+        it('should warn and not throw when sagemaker.parseCookies command is not found', async function () {
+            isAmazonQStub.returns(true)
+            isSageMakerStub.returns(true)
+            const error = new Error("command 'sagemaker.parseCookies' not found")
+            executeCommandStub.withArgs('sagemaker.parseCookies').rejects(error)
+            getErrorMsgStub.returns("command 'sagemaker.parseCookies' not found")
+
+            await initialize(mockLoginManager)
+
+            assert.ok(executeCommandStub.calledOnceWith('sagemaker.parseCookies'))
+            assert.ok(getErrorMsgStub.calledOnceWith(error))
+            assert.ok(!initializeCredentialsProviderManagerStub.called)
+        })
+
+        it('should throw when sagemaker.parseCookies fails with non-command-not-found error', async function () {
+            isAmazonQStub.returns(true)
+            isSageMakerStub.returns(true)
+            const error = new Error('Some other error')
+            executeCommandStub.withArgs('sagemaker.parseCookies').rejects(error)
+            getErrorMsgStub.returns('Some other error')
+
+            await assert.rejects(initialize(mockLoginManager), /Some other error/)
+
+            assert.ok(executeCommandStub.calledOnceWith('sagemaker.parseCookies'))
+            assert.ok(getErrorMsgStub.calledOnceWith(error))
+            assert.ok(!mockLogger.warn.called)
+            assert.ok(!initializeCredentialsProviderManagerStub.called)
+        })
+    })
+})