diff --git a/client/ayon_applications/hooks/prelaunch_shell_windows.py b/client/ayon_applications/hooks/prelaunch_shell_windows.py
index 420b0fe275..23d75ce580 100644
--- a/client/ayon_applications/hooks/prelaunch_shell_windows.py
+++ b/client/ayon_applications/hooks/prelaunch_shell_windows.py
@@ -2,12 +2,12 @@
 from ayon_applications import PreLaunchHook, LaunchTypes
 
 
-class LaunchShellWindowsCreationflags(PreLaunchHook):
-    """Avoid running the shell without new console"""
+class LaunchTerminalWindowsCreationflags(PreLaunchHook):
+    """Avoid running the terminal without new console"""
 
     # Should be as last hook because must change launch arguments to string
     order = 1000
-    app_groups = {"shell"}
+    app_groups = {"terminal"}
     platforms = {"windows"}
     launch_types = {LaunchTypes.local}
 
diff --git a/client/ayon_applications/icons/shell.png b/client/ayon_applications/icons/terminal.png
similarity index 100%
rename from client/ayon_applications/icons/shell.png
rename to client/ayon_applications/icons/terminal.png
diff --git a/client/ayon_applications/plugins/launcher_actions/debug_shell.py b/client/ayon_applications/plugins/launcher_actions/debug_terminal.py
similarity index 79%
rename from client/ayon_applications/plugins/launcher_actions/debug_shell.py
rename to client/ayon_applications/plugins/launcher_actions/debug_terminal.py
index 1ab408c0f3..9a6cc78d89 100644
--- a/client/ayon_applications/plugins/launcher_actions/debug_shell.py
+++ b/client/ayon_applications/plugins/launcher_actions/debug_terminal.py
@@ -32,10 +32,10 @@ def get_application_qt_icon(application: Application) -> Optional[QtGui.QIcon]:
     return QtGui.QIcon()
 
 
-class DebugShell(LauncherAction):
-    """Run any host environment in command line."""
-    name = "debugshell"
-    label = "Shell"
+class DebugTerminal(LauncherAction):
+    """Run any host environment in command line terminal."""
+    name = "debugterminal"
+    label = "Terminal"
     icon = "terminal"
     color = "#e8770e"
     order = 10
@@ -49,22 +49,24 @@ def process(self, selection, **kwargs):
         pos = QtGui.QCursor.pos()
         application_manager = ApplicationManager()
 
-        # Choose shell
-        shell_applications = self.get_shell_applications(application_manager)
-        if len(shell_applications) == 0:
+        # Choose terminal
+        terminal_applications = self.get_terminal_applications(
+            application_manager)
+        if len(terminal_applications) == 0:
             raise ValueError(
-                "Missing application variants for shell application. Please "
-                "configure 'ayon+settings://applications/applications/shell'"
+                "Missing application variants for terminal application. "
+                "Please configure "
+                "'ayon+settings://applications/applications/terminal'"
             )
-        elif len(shell_applications) == 1:
+        elif len(terminal_applications) == 1:
             # If only one configured shell application, always use that one
-            shell_app = shell_applications[0]
-            print("Only one shell application variant is configured. "
-                  f"Defaulting to {shell_app.full_label}")
+            terminal_app = terminal_applications[0]
+            print("Only one terminal application variant is configured. "
+                  f"Defaulting to {terminal_app.full_label}")
         else:
-            shell_app = self.choose_app(shell_applications, pos,
-                                        show_variant_name_only=True)
-        if not shell_app:
+            terminal_app = self.choose_app(
+                terminal_applications, pos, show_variant_name_only=True)
+        if not terminal_app:
             return
 
         # Get applications
@@ -93,10 +95,10 @@ def process(self, selection, **kwargs):
         if cwd:
             print(f"Setting Work Directory: {cwd}")
 
-        print(f"Launching shell in environment of {app.full_label}..")
-        self.launch_app_as_shell(
+        print(f"Launching terminal in environment of {app.full_label}..")
+        self.launch_terminal_with_app_context(
             application_manager,
-            shell_app,
+            terminal_app,
             project_name=selection.project_name,
             folder_path=selection.folder_path,
             task_name=selection.task_name,
@@ -146,13 +148,14 @@ def get_project_applications(application_manager: ApplicationManager,
         return applications
 
     @staticmethod
-    def get_shell_applications(application_manager) -> list[Application]:
-        """Return all configured shell applications"""
-        # TODO: Maybe filter out shell applications not configured for your
+    def get_terminal_applications(application_manager) -> list[Application]:
+        """Return all configured terminal applications"""
+        # TODO: Maybe filter out terminal applications not configured for your
         #  current platform
-        return list(application_manager.app_groups["shell"].variants.values())
+        return list(
+            application_manager.app_groups["terminal"].variants.values())
 
-    def launch_app_as_shell(
+    def launch_terminal_with_app_context(
         self,
         application_manager: ApplicationManager,
         application: Application,
diff --git a/server/applications.json b/server/applications.json
index 9042dc5701..d542a124a2 100644
--- a/server/applications.json
+++ b/server/applications.json
@@ -1278,17 +1278,16 @@
                 }
             ]
         },
-        "shell": {
+        "terminal": {
             "enabled": true,
-            "label": "Shell",
-            "icon": "{}/app_icons/shell.png",
+            "label": "Terminal",
+            "icon": "{}/app_icons/terminal.png",
             "host_name": "",
             "environment": "{}",
             "variants": [
                 {
                     "name": "main",
                     "label": "Main",
-                    "use_python_2": false,
                     "executables": {
                         "windows": ["cmd.exe"],
                         "darwin": ["Terminal.app"],
diff --git a/server/constants.py b/server/constants.py
index 4196e07887..24e3af9c2b 100644
--- a/server/constants.py
+++ b/server/constants.py
@@ -19,6 +19,7 @@
     "photoshop": "Photoshop",
     "resolve": "Resolve",
     "substancepainter": "Substance Painter",
+    "terminal": "Terminal",
     "tvpaint": "TVPaint",
     "unreal": "Unreal Editor",
     "wrap": "Wrap",
diff --git a/server/settings.py b/server/settings.py
index 5bd6d8a768..a34f1f36c1 100644
--- a/server/settings.py
+++ b/server/settings.py
@@ -42,6 +42,7 @@
     "zbrush",
     "equalizer",
     "motionbuilder",
+    "terminal"
 }
 
 
@@ -319,7 +320,7 @@ class ApplicationsSettings(BaseSettingsModel):
         default_factory=AppGroup, title="3DEqualizer")
     motionbuilder: AppGroup = SettingsField(
         default_factory=AppGroup, title="Motion Builder")
-    shell: AppGroup = SettingsField(
+    terminal: AppGroup = SettingsField(
         default_factory=AppGroup,
         title="Terminal",
         description="Terminal shell application")