Iterm2 as alternative to terminal in RStudio | Access Denied Permission Issues

I am trying to set Iterm2 as the alternative terminal in RStudio. Once I do that and restart RStudio. When I click on terminal, I get below errors:
ERROR system error 13 (Permission denied) [exe: /Applications/]; OCCURRED AT rstudio::core::Error rstudio::core::system::ChildProcess::run() src/cpp/core/system/PosixChildProcess.cpp:833; LOGGED FROM: rstudio::core::Error rstudio::core::system::ChildProcess::run() src/cpp/core/system/PosixChildProcess.cpp:835
Has anyone tried Iterm2 as their alternative terminal in RStudio on their MacOS? I am using a M1 Mac.

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