diff --git a/cli/azd/test/functional/cli_test.go b/cli/azd/test/functional/cli_test.go
index 22703809871..a82aae6b89d 100644
--- a/cli/azd/test/functional/cli_test.go
+++ b/cli/azd/test/functional/cli_test.go
@@ -837,94 +837,6 @@ func Test_CLI_InfraCreateAndDeleteResourceTerraform(t *testing.T) {
 	t.Logf("Done\n")
 }
 
-func Test_CLI_InfraCreateAndDeleteResourceTerraformRemote(t *testing.T) {
-	t.Skip("azure/azure-dev#4564")
-
-	ctx, cancel := newTestContext(t)
-	defer cancel()
-
-	dir := tempDirWithDiagnostics(t)
-	t.Logf("DIR: %s", dir)
-
-	envName := randomEnvName()
-	location := "eastus2"
-	backendResourceGroupName := fmt.Sprintf("rs-%s", envName)
-	backendStorageAccountName := strings.Replace(envName, "-", "", -1)
-	backendContainerName := "tfstate"
-
-	t.Logf("AZURE_ENV_NAME: %s", envName)
-
-	cli := azdcli.NewCLI(t)
-	cli.WorkingDirectory = dir
-	cli.Env = append(os.Environ(), fmt.Sprintf("AZURE_LOCATION=%s", location))
-
-	err := copySample(dir, "resourcegroupterraformremote")
-	require.NoError(t, err, "failed expanding sample")
-
-	//Create remote state resources
-	commandRunner := exec.NewCommandRunner(nil)
-	runArgs := newRunArgs("az", "group", "create", "--name", backendResourceGroupName, "--location", location)
-
-	_, err = commandRunner.Run(ctx, runArgs)
-	require.NoError(t, err)
-
-	defer func() {
-		commandRunner := exec.NewCommandRunner(nil)
-		runArgs := newRunArgs("az", "group", "delete", "--name", backendResourceGroupName, "--yes")
-		_, err = commandRunner.Run(ctx, runArgs)
-		require.NoError(t, err)
-	}()
-
-	//Create storage account
-	runArgs = newRunArgs("az", "storage", "account", "create", "--resource-group", backendResourceGroupName,
-		"--name", backendStorageAccountName, "--sku", "Standard_LRS", "--encryption-services", "blob")
-	_, err = commandRunner.Run(ctx, runArgs)
-	require.NoError(t, err)
-
-	//Get Account Key
-	runArgs = newRunArgs("az", "storage", "account", "keys", "list", "--resource-group",
-		backendResourceGroupName, "--account-name", backendStorageAccountName, "--query", "[0].value",
-		"-o", "tsv")
-	cmdResult, err := commandRunner.Run(ctx, runArgs)
-	require.NoError(t, err)
-	storageAccountKey := strings.ReplaceAll(strings.ReplaceAll(cmdResult.Stdout, "\n", ""), "\r", "")
-
-	// Create storage container
-	runArgs = newRunArgs("az", "storage", "container", "create", "--name", backendContainerName,
-		"--account-name", backendStorageAccountName, "--account-key", storageAccountKey)
-	runArgs.SensitiveData = append(runArgs.SensitiveData, storageAccountKey)
-	result, err := commandRunner.Run(ctx, runArgs)
-	_ = result
-	require.NoError(t, err)
-
-	//Run azd init
-	_, err = cli.RunCommandWithStdIn(ctx, stdinForInit(envName), "init")
-	require.NoError(t, err)
-
-	_, err = cli.RunCommand(ctx, "env", "set", "RS_STORAGE_ACCOUNT", backendStorageAccountName, "--cwd", dir)
-	require.NoError(t, err)
-
-	_, err = cli.RunCommand(ctx, "env", "set", "RS_CONTAINER_NAME", backendContainerName, "--cwd", dir)
-	require.NoError(t, err)
-
-	_, err = cli.RunCommand(ctx, "env", "set", "RS_RESOURCE_GROUP", backendResourceGroupName, "--cwd", dir)
-	require.NoError(t, err)
-
-	// turn alpha feature on
-	_, err = cli.RunCommand(ctx, "config", "set", "alpha.terraform", "on")
-	require.NoError(t, err)
-
-	t.Logf("Starting infra create\n")
-	_, err = cli.RunCommandWithStdIn(ctx, stdinForProvision(), "provision", "--cwd", dir)
-	require.NoError(t, err)
-
-	t.Logf("Starting infra delete\n")
-	_, err = cli.RunCommand(ctx, "down", "--cwd", dir, "--force", "--purge")
-	require.NoError(t, err)
-
-	t.Logf("Done\n")
-}
-
 func newRunArgs(cmd string, args ...string) exec.RunArgs {
 	return exec.NewRunArgs(cmd, args...)
 }