diff --git a/packages/app-next/knip-report.md b/packages/app-next/knip-report.md
index b905be6cd1..78d11bdebd 100644
--- a/packages/app-next/knip-report.md
+++ b/packages/app-next/knip-report.md
@@ -1,6 +1,6 @@
 # Knip report
 
-## Unused dependencies (64)
+## Unused dependencies (63)
 
 | Name                                             | Location     | Severity |
 | :----------------------------------------------- | :----------- | :------- |
@@ -61,7 +61,6 @@
 | @backstage/plugin-todo                           | package.json | error    |
 | @backstage/plugin-adr                            | package.json | error    |
 | @backstage/plugin-org                            | package.json | error    |
-| @backstage/theme                                 | package.json | error    |
 | @material-ui/lab                                 | package.json | error    |
 | zen-observable                                   | package.json | error    |
 | @octokit/rest                                    | package.json | error    |
diff --git a/packages/app/knip-report.md b/packages/app/knip-report.md
index 8c41d751c7..118f6f14e0 100644
--- a/packages/app/knip-report.md
+++ b/packages/app/knip-report.md
@@ -1,6 +1,6 @@
 # Knip report
 
-## Unused dependencies (15)
+## Unused dependencies (14)
 
 | Name                              | Location     | Severity |
 | :-------------------------------- | :----------- | :------- |
@@ -11,7 +11,6 @@
 | @backstage/plugin-airbrake        | package.json | error    |
 | vite-plugin-node-polyfills        | package.json | error    |
 | @vitejs/plugin-react              | package.json | error    |
-| @backstage/theme                  | package.json | error    |
 | @material-ui/lab                  | package.json | error    |
 | vite-plugin-html                  | package.json | error    |
 | zen-observable                    | package.json | error    |
diff --git a/packages/cli/knip-report.md b/packages/cli/knip-report.md
index aaf4581ad6..d1989ea4ae 100644
--- a/packages/cli/knip-report.md
+++ b/packages/cli/knip-report.md
@@ -33,7 +33,7 @@
 | glob                             | package.json | error    |
 | util                             | package.json | error    |
 
-## Unused devDependencies (13)
+## Unused devDependencies (12)
 
 | Name                                    | Location     | Severity |
 | :-------------------------------------- | :----------- | :------- |
@@ -44,7 +44,6 @@
 | @backstage/core-app-api                 | package.json | error    |
 | @backstage/dev-utils                    | package.json | error    |
 | @types/http-proxy                       | package.json | error    |
-| @backstage/theme                        | package.json | error    |
 | @types/svgo                             | package.json | error    |
 | @types/ejs                              | package.json | error    |
 | nodemon                                 | package.json | error    |
diff --git a/packages/dev-utils/knip-report.md b/packages/dev-utils/knip-report.md
index 01b5c107ce..8d850953c7 100644
--- a/packages/dev-utils/knip-report.md
+++ b/packages/dev-utils/knip-report.md
@@ -1,11 +1,5 @@
 # Knip report
 
-## Unused dependencies (1)
-
-| Name             | Location     | Severity |
-| :--------------- | :----------- | :------- |
-| @backstage/theme | package.json | error    |
-
 ## Unused devDependencies (1)
 
 | Name                 | Location     | Severity |
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 c170ea1409..426895700b 100644
--- a/packages/repo-tools/src/commands/knip-reports/knip-extractor.ts
+++ b/packages/repo-tools/src/commands/knip-reports/knip-extractor.ts
@@ -78,6 +78,7 @@ async function generateKnipConfig({ packageDir }: KnipConfigOptions) {
     ],
     ignoreDependencies: [
       '@backstage/cli', // everything depends on this for its package.json commands
+      '@backstage/theme', // this uses `declare module` in .d.ts so is implicitly used whenever extensions are needed
     ],
   };
   await fs.writeFile(
diff --git a/plugins/azure-sites/knip-report.md b/plugins/azure-sites/knip-report.md
index d9066a52b6..ba9c1dddc5 100644
--- a/plugins/azure-sites/knip-report.md
+++ b/plugins/azure-sites/knip-report.md
@@ -1,11 +1,5 @@
 # Knip report
 
-## Unused dependencies (1)
-
-| Name             | Location     | Severity |
-| :--------------- | :----------- | :------- |
-| @backstage/theme | package.json | error    |
-
 ## Unused devDependencies (2)
 
 | Name                   | Location     | Severity |
diff --git a/plugins/notifications/knip-report.md b/plugins/notifications/knip-report.md
index 5fff058d21..a3ac626d40 100644
--- a/plugins/notifications/knip-report.md
+++ b/plugins/notifications/knip-report.md
@@ -1,10 +1,9 @@
 # Knip report
 
-## Unused dependencies (2)
+## Unused dependencies (1)
 
 | Name             | Location     | Severity |
 | :--------------- | :----------- | :------- |
-| @backstage/theme | package.json | error    |
 | @material-ui/lab | package.json | error    |
 
 ## Unused devDependencies (3)
diff --git a/plugins/signals/knip-report.md b/plugins/signals/knip-report.md
index 9e260c45bd..31b0ba28ea 100644
--- a/plugins/signals/knip-report.md
+++ b/plugins/signals/knip-report.md
@@ -1,11 +1,10 @@
 # Knip report
 
-## Unused dependencies (4)
+## Unused dependencies (3)
 
 | Name               | Location     | Severity |
 | :----------------- | :----------- | :------- |
 | @material-ui/icons | package.json | error    |
-| @backstage/theme   | package.json | error    |
 | @material-ui/lab   | package.json | error    |
 | react-use          | package.json | error    |