diff --git a/.changeset/cool-pants-boil.md b/.changeset/cool-pants-boil.md
new file mode 100644
index 0000000000..792fb57195
--- /dev/null
+++ b/.changeset/cool-pants-boil.md
@@ -0,0 +1,5 @@
+---
+'@backstage/repo-tools': patch
+---
+
+Improve knip reports by using a single workspace-based config
diff --git a/package.json b/package.json
index 41b8529c70..0595e00b68 100644
--- a/package.json
+++ b/package.json
@@ -126,7 +126,6 @@
     "eslint-plugin-testing-library": "^6.0.0",
     "fs-extra": "^11.2.0",
     "husky": "^9.0.0",
-    "knip": "^5.0.0",
     "lint-staged": "^15.0.0",
     "minimist": "^1.2.5",
     "node-gyp": "^10.0.0",
diff --git a/packages/repo-tools/package.json b/packages/repo-tools/package.json
index f5c6a0c060..4ccad33712 100644
--- a/packages/repo-tools/package.json
+++ b/packages/repo-tools/package.json
@@ -74,6 +74,7 @@
     "just-diff": "^6.0.2",
     "knex": "^3.0.0",
     "knex-pglite": "^0.11.0",
+    "knip": "^5.42.0",
     "lodash": "^4.17.21",
     "minimatch": "^9.0.0",
     "p-limit": "^3.0.2",
diff --git a/packages/repo-tools/src/commands/knip-reports/knip-extractor.ts b/packages/repo-tools/src/commands/knip-reports/knip-extractor.ts
index 50c429f986..645d084017 100644
--- a/packages/repo-tools/src/commands/knip-reports/knip-extractor.ts
+++ b/packages/repo-tools/src/commands/knip-reports/knip-extractor.ts
@@ -18,6 +18,7 @@ import pLimit from 'p-limit';
 import os from 'os';
 import { relative as relativePath, resolve as resolvePath } from 'path';
 import fs from 'fs-extra';
+import type { KnipConfig } from 'knip';
 import { createBinRunner } from '../util';
 
 // Ignore this due to Knip error: Error: ENAMETOOLONG: name too long, scandir
@@ -29,7 +30,7 @@ interface KnipExtractionOptions {
 }
 
 interface KnipConfigOptions {
-  packageDir: string;
+  knipConfigPath: string;
 }
 
 interface KnipPackageOptions {
@@ -55,15 +56,20 @@ function logKnipReportInstructions() {
   console.log('');
 }
 
-async function generateKnipConfig({ packageDir }: KnipConfigOptions) {
-  const knipConfig = {
-    entry: [
-      'dev/index.{ts,tsx}',
-      'src/index.{ts,tsx}',
-      'src/alpha.{ts,tsx}',
-      'src/routes.ts',
-      'src/run.ts',
-    ],
+async function generateKnipConfig({ knipConfigPath }: KnipConfigOptions) {
+  const knipConfig: KnipConfig = {
+    workspaces: {
+      '.': {},
+      '{packages,plugins}/*': {
+        entry: [
+          'dev/index.{ts,tsx}',
+          'src/index.{ts,tsx}',
+          'src/alpha.{ts,tsx}',
+          'src/routes.ts',
+          'src/run.ts',
+        ],
+      },
+    },
     jest: {
       entry: ['src/setupTests.ts', '**/*.test.{ts,tsx}'],
     },
@@ -81,15 +87,12 @@ async function generateKnipConfig({ packageDir }: KnipConfigOptions) {
       '@backstage/theme', // this uses `declare module` in .d.ts so is implicitly used whenever extensions are needed
     ],
   };
-  await fs.writeFile(
-    `${packageDir}/knip.json`,
-    JSON.stringify(knipConfig, null, 2),
-  );
+  await fs.writeFile(knipConfigPath, JSON.stringify(knipConfig, null, 2));
 }
 
-function cleanKnipConfig({ packageDir }: KnipConfigOptions) {
-  if (fs.existsSync(`${packageDir}/knip.json`)) {
-    fs.rmSync(`${packageDir}/knip.json`);
+function cleanKnipConfig({ knipConfigPath }: KnipConfigOptions) {
+  if (fs.existsSync(knipConfigPath)) {
+    fs.rmSync(knipConfigPath);
   }
 }
 
@@ -105,13 +108,11 @@ async function handlePackage({
   }
   const fullDir = cliPaths.resolveTargetRoot(packageDir);
   const reportPath = resolvePath(fullDir, 'knip-report.md');
-  const run = createBinRunner(fullDir, '');
+  const run = createBinRunner(cliPaths.targetRoot, '');
 
-  await generateKnipConfig({ packageDir: fullDir });
-
-  const report = await run(
+  let report = await run(
     `${knipDir}/knip.js`,
-    `--directory ${fullDir}`, // Run in the package directory
+    `-W ${packageDir}`, // Run the desired workspace
     '--config knip.json',
     '--no-exit-code', // Removing this will end the process in case there are findings by knip
     '--no-progress', // Remove unnecessary debugging from output
@@ -120,7 +121,17 @@ async function handlePackage({
     '--reporter markdown',
   );
 
-  cleanKnipConfig({ packageDir: fullDir });
+  // Adjust report paths to be relative to workspace
+  report = report.replaceAll(`| ${packageDir}/`, '| ');
+  // Adjust table separators
+  report = report.replaceAll(
+    new RegExp(`(\\| :-+ \\| :)-{${packageDir.length + 1}}`, 'g'),
+    (_, p1) => p1,
+  );
+  report = report.replaceAll(
+    new RegExp(` \\| Location {1,${packageDir.length + 2}}`, 'g'),
+    ' | Location ',
+  );
 
   const existingReport = await fs.readFile(reportPath, 'utf8').catch(error => {
     if (error.code === 'ENOENT') {
@@ -160,8 +171,10 @@ export async function runKnipReports({
   isLocalBuild,
 }: KnipExtractionOptions) {
   const knipDir = cliPaths.resolveTargetRoot('./node_modules/knip/bin/');
+  const knipConfigPath = cliPaths.resolveTargetRoot('./knip.json');
   const limiter = pLimit(os.cpus().length);
 
+  await generateKnipConfig({ knipConfigPath });
   try {
     await Promise.all(
       packageDirs.map(packageDir =>
@@ -170,15 +183,9 @@ export async function runKnipReports({
         ),
       ),
     );
+    await cleanKnipConfig({ knipConfigPath });
   } catch (e) {
-    console.log(
-      `Error occurred during knip reporting: ${e}, cleaning knip configs`,
-    );
-    packageDirs.map(packageDir => {
-      const fullDir = cliPaths.resolveTargetRoot(packageDir);
-      cleanKnipConfig({ packageDir: fullDir });
-    });
-
+    console.log(`Error occurred during knip reporting: ${e}`);
     throw e;
   }
 }
diff --git a/packages/repo-tools/src/commands/util.ts b/packages/repo-tools/src/commands/util.ts
index e28aae6267..ff4cdad1b8 100644
--- a/packages/repo-tools/src/commands/util.ts
+++ b/packages/repo-tools/src/commands/util.ts
@@ -35,11 +35,12 @@ export function createBinRunner(cwd: string, path: string) {
             {
               cwd,
               shell: true,
-              timeout: 60000,
+              timeout: 3 * 60 * 1000,
               maxBuffer: 1024 * 1024,
             },
             (err, stdout, stderr) => {
               if (err) {
+                console.log('err', err);
                 reject(new Error(`${err.message}\n${stderr}`));
               } else if (stderr) {
                 reject(new Error(`Command printed error output: ${stderr}`));
diff --git a/yarn.lock b/yarn.lock
index cf388516b3..3d19a0021b 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -8329,6 +8329,7 @@ __metadata:
     just-diff: ^6.0.2
     knex: ^3.0.0
     knex-pglite: ^0.11.0
+    knip: ^5.42.0
     lodash: ^4.17.21
     minimatch: ^9.0.0
     p-limit: ^3.0.2
@@ -34104,7 +34105,7 @@ __metadata:
   languageName: node
   linkType: hard
 
-"knip@npm:^5.0.0":
+"knip@npm:^5.42.0":
   version: 5.42.2
   resolution: "knip@npm:5.42.2"
   dependencies:
@@ -39801,11 +39802,11 @@ __metadata:
   linkType: hard
 
 "pretty-ms@npm:^9.0.0":
-  version: 9.0.0
-  resolution: "pretty-ms@npm:9.0.0"
+  version: 9.2.0
+  resolution: "pretty-ms@npm:9.2.0"
   dependencies:
     parse-ms: ^4.0.0
-  checksum: 072b17547e09cb232e8e4c7be0281e256b6d8acd18dfb2fdd715d50330d1689fdaa877f53cf90c62ed419ef842f0f5fb94a2cd8ed1aa6d7608ad48834219435d
+  checksum: d3a5a5b1c8a3417f64a877dba5ee2bacee404b59bc12083466e5e6dce2745e4bd716e1f9860624c7dceb1b4a532e808e4f2a7a03903a132344b3818951e2d125
   languageName: node
   linkType: hard
 
@@ -42217,7 +42218,6 @@ __metadata:
     eslint-plugin-testing-library: ^6.0.0
     fs-extra: ^11.2.0
     husky: ^9.0.0
-    knip: ^5.0.0
     lint-staged: ^15.0.0
     minimist: ^1.2.5
     node-gyp: ^10.0.0