Cannot find module 'next' or its corresponding type declarations

Getting Cannot find module '' or its corresponding type declarations. when importing in Next.js project.

This happens on every single import. Preview

Yarn version : 3.1.0-rc.2
Next version: 11.1.2

tsconfig.json:

{
  "compilerOptions": {
    "target": "es6",
    "lib": [
      "dom",
      "dom.iterable",
      "esnext"
    ],
    "allowJs": true,
    "skipLibCheck": true,
    "strict": true,
    "forceConsistentCasingInFileNames": true,
    "noEmit": true,
    "esModuleInterop": true,
    "module": "esnext",
    "moduleResolution": "node",
    "experimentalDecorators": true,
    "resolveJsonModule": true,
    "isolatedModules": true,
    "importHelpers": true,
    "jsx": "preserve",
    // "baseUrl": "src"
  },
  "include": [
    "next-env.d.ts",
    "**/*.ts",
    "**/*.tsx"
  ],
  "exclude": [
    "node_modules"
  ],
}

If you're using yarn 3 and VSCode, then you need to follow these steps to set up your editor:

• Run yarn dlx @yarnpkg/sdks vscode
• Open any TypeScript file
• Press ctrl+shift+p
• Choose "Select TypeScript Version"
• Pick "Use Workspace Version"

Read here for other editors