A novel junction terminal extension structure is proposed for vertical diamond Schottky barrier diodes (SBDs) by using an n-Ga2O3/p-diamond heterojunction. The depletion region of the heterojunction suppresses part of the forward current conduction path, which slightly increases the on-resistance. On the other hand, the reverse breakdown voltage is enhanced obviously because of attenuated electric field crowding. By optimizing the doping concentration, length, and depth of n-Ga2O3, the trade-off between on-resistance and breakdown voltage with a high Baliga figure of merit (FOM) value is realized through Silvaco technology computer-aided design simulation. In addition, the effect of the work functions of the Schottky electrodes is evaluated. The results are beneficial to realizing a high-performance vertical diamond SBD.