I've been trying to figure out the answer to this for a while, for my own purposes. I decided today that I was going to figure it out and I believe I have it working (installing terraform, the LSP and the AWS provider) using

# Terraform, LSP and AWS Provider
ENV TERRAFORM_VERSION=0.12.24
ENV TERRAFORM_LSP_VERSION=0.0.10
ENV TERRAFORM_AWS_PROVIDER_VERSION=2.59.0

RUN wget -c https://releases.hashicorp.com/terraform/${TERRAFORM_VERSION}/terraform_${TERRAFORM_VERSION}_linux_amd64.zip \
    && unzip terraform_${TERRAFORM_VERSION}_linux_amd64.zip \
    && mv terraform /usr/local/bin \
    && wget -c https://releases.hashicorp.com/terraform-provider-aws/${TERRAFORM_AWS_PROVIDER_VERSION}/terraform-provider-aws_${TERRAFORM_AWS_PROVIDER_VERSION}_linux_amd64.zip \
    && unzip terraform-provider-aws_${TERRAFORM_AWS_PROVIDER_VERSION}_linux_amd64.zip \
    && mv terraform-provider-aws_v${TERRAFORM_AWS_PROVIDER_VERSION}* /usr/local/bin \
    && echo "provider \"aws\" {}" >> /usr/local/bin/providers.tf \
    && wget -c https://github.com/juliosueiras/terraform-lsp/releases/download/v${TERRAFORM_LSP_VERSION}/terraform-lsp_${TERRAFORM_LSP_VERSION}_linux_amd64.tar.gz -O - | tar -zx \
    && mv terraform-lsp /usr/local/bin \
    && rm terraform*.zip

because I'm installing this to /usr/local/bin and I'm creating a containerUser which wouldn't have access to install these components, I needed to add the following to the settings section of my devcontainer.json

        "terraform.indexing": {
            "enabled": false
        },
        "terraform.languageServer": {
            "enabled": true,
            "installCommonProviders": false,
            "pathToBinary": "/usr/local/bin"
        },

Obviously you need to make adjustments if you want other providers, or to install it elsewhere, or different versions of terraform, the LSP or the AWS provider, but they all should be simple changes.

The latest releases can be found at the following links:

• Terraform
• Terraform LSP
• AWS Provider
• Other Providers