diff --git a/flytekit/types/file/file.py b/flytekit/types/file/file.py
index 23f4137344..bb8feb3d9c 100644
--- a/flytekit/types/file/file.py
+++ b/flytekit/types/file/file.py
@@ -8,6 +8,7 @@
 
 from dataclasses_json import config, dataclass_json
 from marshmallow import fields
+from typing_extensions import Annotated, get_args, get_origin
 
 from flytekit.core.context_manager import FlyteContext, FlyteContextManager
 from flytekit.core.type_engine import TypeEngine, TypeTransformer, TypeTransformerFailedError
@@ -335,6 +336,10 @@ def to_literal(
         if python_val is None:
             raise TypeTransformerFailedError("None value cannot be converted to a file.")
 
+        # Correctly handle `Annotated[FlyteFile, ...]` by extracting the origin type
+        if get_origin(python_type) is Annotated:
+            python_type = get_args(python_type)[0]
+
         if not (python_type is os.PathLike or issubclass(python_type, FlyteFile)):
             raise ValueError(f"Incorrect type {python_type}, must be either a FlyteFile or os.PathLike")
 
diff --git a/tests/flytekit/unit/core/test_flyte_file.py b/tests/flytekit/unit/core/test_flyte_file.py
index 1c1593ad4c..b7f0a1aeee 100644
--- a/tests/flytekit/unit/core/test_flyte_file.py
+++ b/tests/flytekit/unit/core/test_flyte_file.py
@@ -5,12 +5,14 @@
 from unittest.mock import MagicMock
 
 import pytest
+from typing_extensions import Annotated
 
 import flytekit.configuration
 from flytekit.configuration import Config, Image, ImageConfig
 from flytekit.core.context_manager import ExecutionState, FlyteContextManager
 from flytekit.core.data_persistence import FileAccessProvider, flyte_tmp_dir
 from flytekit.core.dynamic_workflow_task import dynamic
+from flytekit.core.hash import HashMethod
 from flytekit.core.launch_plan import LaunchPlan
 from flytekit.core.task import task
 from flytekit.core.type_engine import TypeEngine
@@ -433,6 +435,21 @@ def wf(path: str) -> os.PathLike:
     assert flyte_tmp_dir in wf(path="s3://somewhere").path
 
 
+def test_flyte_file_annotated_hashmethod(local_dummy_file):
+    def calc_hash(ff: FlyteFile) -> str:
+        return str(ff.path)
+
+    @task
+    def t1(path: str) -> Annotated[FlyteFile, HashMethod(calc_hash)]:
+        return FlyteFile(path)
+
+    @workflow
+    def wf(path: str) -> None:
+        t1(path=path)
+
+    wf(path=local_dummy_file)
+
+
 @pytest.mark.sandbox_test
 def test_file_open_things():
     @task