diff --git a/docs/config/index.md b/docs/config/index.md
index f367eb01e77c..0363fafdc3f9 100644
--- a/docs/config/index.md
+++ b/docs/config/index.md
@@ -1171,6 +1171,23 @@ The reporter has three different types:
   }
   ```
 
+Since Vitest 1.2.0, you can also pass custom coverage reporters. See [Guide - Custom Coverage Reporter](/guide/coverage#custom-coverage-reporter) for more information.
+
+<!-- eslint-skip -->
+```ts
+  {
+    reporter: [
+      // Specify reporter using name of the NPM package
+      '@vitest/custom-coverage-reporter',
+      ['@vitest/custom-coverage-reporter', { someOption: true }],
+
+      // Specify reporter using local path
+      '/absolute/path/to/custom-reporter.cjs',
+      ['/absolute/path/to/custom-reporter.cjs', { someOption: true }],
+    ]
+  }
+```
+
 Since Vitest 0.31.0, you can check your coverage report in Vitest UI: check [Vitest UI Coverage](/guide/coverage#vitest-ui) for more details.
 
 #### coverage.reportOnFailure <Badge type="info">0.31.2+</Badge>
@@ -2045,7 +2062,7 @@ Path to a [workspace](/guide/workspace) config file relative to [root](#root).
 
 - **Type:** `boolean`
 - **Default:** `true`
-- **CLI:** `--no-isolate`, `--isolate=false` 
+- **CLI:** `--no-isolate`, `--isolate=false`
 
 Run tests in an isolated environment. This option has no effect on `vmThreads` pool.
 
diff --git a/docs/guide/coverage.md b/docs/guide/coverage.md
index 9662dcc5022b..72447aba6e5e 100644
--- a/docs/guide/coverage.md
+++ b/docs/guide/coverage.md
@@ -70,6 +70,55 @@ export default defineConfig({
 })
 ```
 
+## Custom Coverage Reporter
+
+You can use custom coverage reporters by passing either the name of the package or absolute path in `test.coverage.reporter`:
+
+```ts
+// vitest.config.ts
+import { defineConfig } from 'vitest/config'
+
+export default defineConfig({
+  test: {
+    coverage: {
+      reporter: [
+        // Specify reporter using name of the NPM package
+        ['@vitest/custom-coverage-reporter', { someOption: true }],
+
+        // Specify reporter using local path
+        '/absolute/path/to/custom-reporter.cjs',
+      ],
+    },
+  },
+})
+```
+
+Custom reporters are loaded by Istanbul and must match its reporter interface. See [built-in reporters' implementation](https://github.com/istanbuljs/istanbuljs/tree/master/packages/istanbul-reports/lib) for reference.
+
+```js
+// custom-reporter.cjs
+const { ReportBase } = require('istanbul-lib-report')
+
+module.exports = class CustomReporter extends ReportBase {
+  constructor(opts) {
+    super()
+
+    // Options passed from configuration are available here
+    this.file = opts.file
+  }
+
+  onStart(root, context) {
+    this.contentWriter = context.writer.writeFile(this.file)
+    this.contentWriter.println('Start of custom coverage report')
+  }
+
+  onEnd() {
+    this.contentWriter.println('End of custom coverage report')
+    this.contentWriter.close()
+  }
+}
+```
+
 ## Custom Coverage Provider
 
 It's also possible to provide your custom coverage provider by passing `'custom'` in `test.coverage.provider`:
diff --git a/packages/coverage-istanbul/src/provider.ts b/packages/coverage-istanbul/src/provider.ts
index 1eb6a70597c2..c25a147f7e73 100644
--- a/packages/coverage-istanbul/src/provider.ts
+++ b/packages/coverage-istanbul/src/provider.ts
@@ -206,7 +206,8 @@ export class IstanbulCoverageProvider extends BaseCoverageProvider implements Co
       this.ctx.logger.log(c.blue(' % ') + c.dim('Coverage report from ') + c.yellow(this.name))
 
     for (const reporter of this.options.reporter) {
-      reports.create(reporter[0], {
+      // Type assertion required for custom reporters
+      reports.create(reporter[0] as Parameters<typeof reports.create>[0], {
         skipFull: this.options.skipFull,
         projectRoot: this.ctx.config.root,
         ...reporter[1],
diff --git a/packages/coverage-v8/src/provider.ts b/packages/coverage-v8/src/provider.ts
index d3f95a874886..19b80986fcf0 100644
--- a/packages/coverage-v8/src/provider.ts
+++ b/packages/coverage-v8/src/provider.ts
@@ -198,7 +198,8 @@ export class V8CoverageProvider extends BaseCoverageProvider implements Coverage
       this.ctx.logger.log(c.blue(' % ') + c.dim('Coverage report from ') + c.yellow(this.name))
 
     for (const reporter of this.options.reporter) {
-      reports.create(reporter[0], {
+      // Type assertion required for custom reporters
+      reports.create(reporter[0] as Parameters<typeof reports.create>[0], {
         skipFull: this.options.skipFull,
         projectRoot: this.ctx.config.root,
         ...reporter[1],
diff --git a/packages/ui/node/index.ts b/packages/ui/node/index.ts
index 60841d02b8f3..e15a2146c0ff 100644
--- a/packages/ui/node/index.ts
+++ b/packages/ui/node/index.ts
@@ -57,7 +57,7 @@ function resolveCoverageFolder(ctx: Vitest) {
     ? htmlReporter[1].subdir
     : undefined
 
-  if (!subdir)
+  if (!subdir || typeof subdir !== 'string')
     return [root, `/${basename(root)}/`]
 
   return [resolve(root, subdir), `/${basename(root)}/${subdir}/`]
diff --git a/packages/vitest/src/types/coverage.ts b/packages/vitest/src/types/coverage.ts
index 73006b68287f..e7a9e1a42c8e 100644
--- a/packages/vitest/src/types/coverage.ts
+++ b/packages/vitest/src/types/coverage.ts
@@ -52,14 +52,14 @@ export interface CoverageProviderModule {
   stopCoverage?(): unknown | Promise<unknown>
 }
 
-export type CoverageReporter = keyof ReportOptions
+export type CoverageReporter = keyof ReportOptions | (string & {})
 
 type CoverageReporterWithOptions<ReporterName extends CoverageReporter = CoverageReporter> =
-   ReporterName extends CoverageReporter
+   ReporterName extends keyof ReportOptions
      ? ReportOptions[ReporterName] extends never
        ? [ReporterName, {}] // E.g. the "none" reporter
        : [ReporterName, Partial<ReportOptions[ReporterName]>]
-     : never
+     : [ReporterName, Record<string, unknown>]
 
 type Provider = 'v8' | 'istanbul' | 'custom' | undefined
 
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index cefdd64f1b74..b1191d9c5cc8 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -1590,6 +1590,9 @@ importers:
       '@types/istanbul-lib-coverage':
         specifier: ^2.0.6
         version: 2.0.6
+      '@types/istanbul-lib-report':
+        specifier: ^3.0.3
+        version: 3.0.3
       '@vitejs/plugin-vue':
         specifier: latest
         version: 4.5.0(vite@5.0.2)(vue@3.3.8)
@@ -1611,6 +1614,9 @@ importers:
       istanbul-lib-coverage:
         specifier: ^3.2.0
         version: 3.2.0
+      istanbul-lib-report:
+        specifier: ^3.0.1
+        version: 3.0.1
       magicast:
         specifier: ^0.3.2
         version: 0.3.2
diff --git a/test/coverage-test/coverage-report-tests/generic.report.test.ts b/test/coverage-test/coverage-report-tests/generic.report.test.ts
index b8c016dbb8a8..d7e5821b6d3d 100644
--- a/test/coverage-test/coverage-report-tests/generic.report.test.ts
+++ b/test/coverage-test/coverage-report-tests/generic.report.test.ts
@@ -31,6 +31,20 @@ test('lcov report', async () => {
   expect(lcovReportFiles).toContain('index.html')
 })
 
+test('custom report', async () => {
+  const coveragePath = resolve('./coverage')
+  const files = fs.readdirSync(coveragePath)
+
+  expect(files).toContain('custom-reporter-output.md')
+
+  const content = fs.readFileSync(resolve(coveragePath, 'custom-reporter-output.md'), 'utf-8')
+  expect(content).toMatchInlineSnapshot(`
+    "Start of custom coverage report
+    End of custom coverage report
+    "
+  `)
+})
+
 test('all includes untested files', () => {
   const coveragePath = resolve('./coverage/src')
   const files = fs.readdirSync(coveragePath)
diff --git a/test/coverage-test/custom-reporter.cjs b/test/coverage-test/custom-reporter.cjs
new file mode 100644
index 000000000000..c8c46c00a9e8
--- /dev/null
+++ b/test/coverage-test/custom-reporter.cjs
@@ -0,0 +1,25 @@
+/* Istanbul uses `require`: https://github.com/istanbuljs/istanbuljs/blob/5584b50305a6a17d3573aea25c84e254d4a08b65/packages/istanbul-reports/index.js#L19 */
+
+'use strict'
+const { ReportBase } = require('istanbul-lib-report')
+
+module.exports = class CustomReporter extends ReportBase {
+  constructor(opts) {
+    super()
+
+    if (!opts.file)
+      throw new Error('File is required as custom reporter parameter')
+
+    this.file = opts.file
+  }
+
+  onStart(root, context) {
+    this.contentWriter = context.writer.writeFile(this.file)
+    this.contentWriter.println('Start of custom coverage report')
+  }
+
+  onEnd() {
+    this.contentWriter.println('End of custom coverage report')
+    this.contentWriter.close()
+  }
+}
diff --git a/test/coverage-test/package.json b/test/coverage-test/package.json
index fbdddf72c679..48f5f21b4b95 100644
--- a/test/coverage-test/package.json
+++ b/test/coverage-test/package.json
@@ -14,6 +14,7 @@
   "devDependencies": {
     "@ampproject/remapping": "^2.2.1",
     "@types/istanbul-lib-coverage": "^2.0.6",
+    "@types/istanbul-lib-report": "^3.0.3",
     "@vitejs/plugin-vue": "latest",
     "@vitest/browser": "workspace:*",
     "@vitest/coverage-istanbul": "workspace:*",
@@ -21,6 +22,7 @@
     "@vue/test-utils": "latest",
     "happy-dom": "latest",
     "istanbul-lib-coverage": "^3.2.0",
+    "istanbul-lib-report": "^3.0.1",
     "magicast": "^0.3.2",
     "vite": "latest",
     "vitest": "workspace:*",
diff --git a/test/coverage-test/test/configuration-options.test-d.ts b/test/coverage-test/test/configuration-options.test-d.ts
index d4dad6bb4771..f5f60cdcf045 100644
--- a/test/coverage-test/test/configuration-options.test-d.ts
+++ b/test/coverage-test/test/configuration-options.test-d.ts
@@ -149,9 +149,7 @@ test('reporters, single', () => {
   assertType<Coverage>({ reporter: 'text-lcov' })
   assertType<Coverage>({ reporter: 'text-summary' })
   assertType<Coverage>({ reporter: 'text' })
-
-  // @ts-expect-error -- String reporters must be known built-in's
-  assertType<Coverage>({ reporter: 'unknown-reporter' })
+  assertType<Coverage>({ reporter: 'custom-reporter' })
 })
 
 test('reporters, multiple', () => {
@@ -173,11 +171,8 @@ test('reporters, multiple', () => {
     ],
   })
 
-  // @ts-expect-error -- List of string reporters must be known built-in's
-  assertType<Coverage>({ reporter: ['unknown-reporter'] })
-
-  // @ts-expect-error -- ... and all reporters must be known
-  assertType<Coverage>({ reporter: ['html', 'json', 'unknown-reporter'] })
+  assertType<Coverage>({ reporter: ['custom-reporter'] })
+  assertType<Coverage>({ reporter: ['html', 'json', 'custom-reporter'] })
 })
 
 test('reporters, with options', () => {
@@ -196,6 +191,7 @@ test('reporters, with options', () => {
       ['text-lcov', { projectRoot: 'string' }],
       ['text-summary', { file: 'string' }],
       ['text', { skipEmpty: true, skipFull: true, maxCols: 1 }],
+      ['custom-reporter', { 'someOption': true, 'some-other-custom-option': { width: 123 } }],
     ],
   })
 
@@ -209,12 +205,6 @@ test('reporters, with options', () => {
 
   assertType<Coverage>({
     reporter: [
-      // @ts-expect-error -- teamcity report option on html reporter
-      ['html', { blockName: 'string' }],
-
-      // @ts-expect-error -- html-spa report option on json reporter
-      ['json', { metricsToShow: ['branches'] }],
-
       // @ts-expect-error -- second value should be object even though TS intellisense prompts types of reporters
       ['lcov', 'html-spa'],
     ],
@@ -225,9 +215,13 @@ test('reporters, mixed variations', () => {
   assertType<Coverage>({
     reporter: [
       'clover',
+      'custom-reporter-1',
       ['cobertura'],
+      ['custom-reporter-2'],
       ['html-spa', {}],
+      ['custom-reporter-3', {}],
       ['html', { verbose: true, subdir: 'string' }],
+      ['custom-reporter-4', { some: 'option', width: 123 }],
     ],
   })
 })
diff --git a/test/coverage-test/vitest.config.ts b/test/coverage-test/vitest.config.ts
index a95ca0ed051d..a6aae64bead2 100644
--- a/test/coverage-test/vitest.config.ts
+++ b/test/coverage-test/vitest.config.ts
@@ -79,6 +79,7 @@ export default defineConfig({
         ['html'],
         ['lcov', {}],
         ['json', { file: 'custom-json-report-name.json' }],
+        [resolve('./custom-reporter.cjs'), { file: 'custom-reporter-output.md' }],
       ],
 
       // These will be updated by tests and reseted back by generic.report.test.ts