The following options have been removed from the Server InitializationOptions interface:

• typescript#tsdk
• typescript#tsdkUrl
• ignoreTriggerCharacters

createSimpleProjectProvider has been renamed to createSimpleProjectProviderFactory and needs to be invoked with no arguments.

createTypeScriptProjectProvider has been renamed to createTypeScriptProjectProviderFactory and needs to be invoked with a TS module as an argument.

The core code of @volar/language-server no longer loads TSDK with server.initialize(), so you now need to manually load TSDK. Here is an example from Vue Language Tools:

 import { loadTsdkByPath } from '@volar/language-server/node';

 connection.onInitialize(params => {
 	const tsdk = loadTsdkByPath(params.initializationOptions.typescript.tsdk, params.locale);
 	return server.initialize(
 		params,
 		params.initializationOptions?.hybridMode
 			? createSimpleProjectProviderFactory()
 			: createTypeScriptProjectProviderFactory(tsdk.typescript, tsdk.diagnosticMessages),
 		{ /* ... */ },
 	);
 });

There are also some internal code adjustments that people shouldn't need to be concerned about.