diff --git a/components/ide/jetbrains/launcher/main.go b/components/ide/jetbrains/launcher/main.go
index cd6074558badc5..9dcde103cf9b01 100644
--- a/components/ide/jetbrains/launcher/main.go
+++ b/components/ide/jetbrains/launcher/main.go
@@ -42,7 +42,11 @@ import (
 	supervisor "github.com/gitpod-io/gitpod/supervisor/api"
 )
 
-const defaultBackendPort = "63342"
+const (
+	defaultBackendPort = "63342"
+	maxDefaultXmx      = 8 * 1024
+	minDefaultXmx      = 2 * 1024
+)
 
 var (
 	// ServiceName is the name we use for tracing/logging.
@@ -857,6 +861,19 @@ func updateVMOptions(
 	if err == nil && parsedCPUCount > 0 && parsedCPUCount <= 16 {
 		gitpodVMOptions = append(gitpodVMOptions, "-XX:ActiveProcessorCount="+cpuCount)
 	}
+
+	memory := os.Getenv("GITPOD_MEMORY")
+	parsedMemory, err := strconv.Atoi(memory)
+	if err == nil && parsedMemory > 0 {
+		xmx := (float64(parsedMemory) * 0.6)
+		if xmx > maxDefaultXmx { // 8G
+			xmx = maxDefaultXmx
+		}
+		if xmx > minDefaultXmx {
+			gitpodVMOptions = append(gitpodVMOptions, fmt.Sprintf("-Xmx%dm", int(xmx)))
+		}
+	}
+
 	vmoptions := deduplicateVMOption(ideaVMOptionsLines, gitpodVMOptions, filterFunc)
 
 	// user-defined vmoptions (EnvVar)
diff --git a/components/ide/jetbrains/launcher/main_test.go b/components/ide/jetbrains/launcher/main_test.go
index 12c9710898c8ff..dc13909aa05a27 100644
--- a/components/ide/jetbrains/launcher/main_test.go
+++ b/components/ide/jetbrains/launcher/main_test.go
@@ -54,7 +54,12 @@ func TestUpdateVMOptions(t *testing.T) {
 		{"idea64.vmoptions (INTELLIJ_VMOPTIONS env set)", "intellij", map[string]string{"INTELLIJ_VMOPTIONS": "-Xmx4096m"}, "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true", "-Xms128m\n-Xmx4096m\n-Dsun.tools.attach.tmp.only=true\n-XX:+UseContainerSupport\n-Dfreeze.reporter.profiling=false\n-Dgtw.disable.exit.dialog=true\n-Djdk.configure.existing=true"},
 		{"idea64.vmoptions (INTELLIJ_VMOPTIONS env set)", "intellij", map[string]string{"INTELLIJ_VMOPTIONS": "-Xmx4096m -XX:MaxRAMPercentage=75"}, "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true", "-Xms128m\n-Xmx4096m\n-XX:MaxRAMPercentage=75\n-Dsun.tools.attach.tmp.only=true\n-XX:+UseContainerSupport\n-Dfreeze.reporter.profiling=false\n-Dgtw.disable.exit.dialog=true\n-Djdk.configure.existing=true"},
 		{"goland64.vmoptions (GOLAND_VMOPTIONS env set with conflicting options)", "goland", map[string]string{"GOLAND_VMOPTIONS": "-ea -XX:+IgnoreUnrecognizedVMOptions -XX:MaxRAMPercentage=75 -XX:MaxRAMPercentage=50"}, "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true", "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true\n-Dfreeze.reporter.profiling=false\n-Dgtw.disable.exit.dialog=true\n-ea\n-XX:+IgnoreUnrecognizedVMOptions\n-XX:+UseContainerSupport\n-XX:MaxRAMPercentage=50"},
+		{"GITPOD_MEMORY with 1G", "intellij", map[string]string{"GITPOD_MEMORY": "1024"}, "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true", "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true\n-Dfreeze.reporter.profiling=false\n-Dgtw.disable.exit.dialog=true\n-Djdk.configure.existing=true\n-XX:+UseContainerSupport\n"},
+		{"GITPOD_MEMORY with 4G", "intellij", map[string]string{"GITPOD_MEMORY": "4096"}, "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true", "-Xms128m\n-Xmx2457m\n-Dsun.tools.attach.tmp.only=true\n-Dfreeze.reporter.profiling=false\n-Dgtw.disable.exit.dialog=true\n-Djdk.configure.existing=true\n-XX:+UseContainerSupport\n"},
+		{"GITPOD_MEMORY with 256G will use max 8G", "intellij", map[string]string{"GITPOD_MEMORY": "262144"}, "-Xms128m\n-Xmx2g\n-Dsun.tools.attach.tmp.only=true", "-Xms128m\n-Xmx8192m\n-Dsun.tools.attach.tmp.only=true\n-Dfreeze.reporter.profiling=false\n-Dgtw.disable.exit.dialog=true\n-Djdk.configure.existing=true\n-XX:+UseContainerSupport\n"},
 	}
+	os.Unsetenv("GITPOD_CPU_COUNT")
+	os.Unsetenv("GITPOD_MEMORY")
 	for _, test := range tests {
 		// compare vmoptions string content equality (i.e. split into slices and compare ignore order)
 		lessFunc := func(a, b string) bool { return a < b }
diff --git a/components/ws-manager-mk2/controllers/create.go b/components/ws-manager-mk2/controllers/create.go
index 0849d44bc23a8c..28ae672c2bae62 100644
--- a/components/ws-manager-mk2/controllers/create.go
+++ b/components/ws-manager-mk2/controllers/create.go
@@ -612,7 +612,7 @@ func createWorkspaceEnvironment(sctx *startWorkspaceContext) ([]corev1.EnvVar, e
 	if err != nil {
 		return nil, xerrors.Errorf("cannot create environment: %w", err)
 	}
-	memoryInMegabyte := res.Memory().Value() / (1000 * 1000)
+	memoryInMegabyte := res.Memory().Value() / (1024 * 1024)
 	result = append(result, corev1.EnvVar{Name: "GITPOD_MEMORY", Value: strconv.FormatInt(memoryInMegabyte, 10)})
 
 	cpuCount := res.Cpu().Value()
diff --git a/dev/preview/workflow/preview/deploy-gitpod.sh b/dev/preview/workflow/preview/deploy-gitpod.sh
index 64a8c2a753ecac..3c9899a010b40e 100755
--- a/dev/preview/workflow/preview/deploy-gitpod.sh
+++ b/dev/preview/workflow/preview/deploy-gitpod.sh
@@ -208,6 +208,13 @@ yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[1].descr
 yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[1].powerups "2"
 yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[1].credits.perMinute "0.1666666667"
 
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[+].id "g1-large"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[2].category "GENERAL PURPOSE"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[2].displayName "Large"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[2].description "Large workspace class (50GB disk)"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[2].powerups "3"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.webapp.workspaceClasses[2].credits.perMinute "0.5"
+
 # create two workspace classes (g1-standard and g1-small) in ws-manager configmap
 yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-standard"].name "g1-standard"
 yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-standard"].resources.requests.cpu "100m"
@@ -221,6 +228,11 @@ yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-small"].re
 yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-small"].resources.limits.storage "5Gi"
 yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-small"].resources.limits.ephemeral-storage "5Gi"
 
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-large"].name "g1-large"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-large"].resources.requests.cpu "100m"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-large"].resources.requests.memory "16Gi"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-large"].resources.limits.storage "50Gi"
+yq w -i "${INSTALLER_CONFIG_PATH}" experimental.workspace.classes["g1-large"].resources.limits.ephemeral-storage "50Gi"
 #
 # configureObjectStorage
 #