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I believe you are seeing an incompatibility with the Postgres psql support for sha256 based passwords. Can you try using the rsql command-line tool to connect?
https://docs.aws.amazon.com/redshift/latest/mgmt/rsql-query-tool.html
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- AWS OFFICIALUpdated 3 years ago

Got similar error when trying to connect from glue connection to redshift with user having sha256 password in redshift? any idea why
This answer seems woefully incomplete without a) link to github releases page where rsql can be downloaded (not just for RHEL like the link provided) - maybe also the list of supported auth methods? seems like jdbc drivers do work...