People living with diabetes had an increased risk of complication and death during the COVID-19 pandemic, new data shows.

More than 40 per cent of COVID-related hospitalisations in 2020-21 had one or more diagnosed comorbid conditions, such as type 2 diabetes or cardiovascular disease.

This was a significant increase from 25 per cent the year prior, according to a new report from the Australian Institute of Health and Welfare.

Additionally, type 2 diabetes and cardiovascular disease were the most common comorbid conditions associated with COVID-19 hospitalisations between 2020-21.

During 2020, diabetes was the underlying cause of about 5100 deaths and contributed to an estimated 17,500 fatalities (about 10.8 per cent of all deaths).

Diabetes is a chronic condition marked by high levels of glucose in the blood and there are different types including type 1, type 2 and gestational.

About 63,900 people are diagnosed each year, an average of 175 diagnoses per day.

Type 2 diabetes comprises more than 90 per cent of cases in Australia, for which there were more than 48,000 people diagnosed in 2020 and 1.2 million people living with the condition.

The report also found in recent years the impact of diabetes has been higher among Aboriginal and Torres Strait Islander people, those living in remote or lower socio-economic areas.

The diabetes prevalence rate was 2.9 times as high among Indigenous Australians as non-Indigenous based on age-standardised, self-reported data from the 2018-19 National Aboriginal and Torres Strait Islander Health Survey.

The impact of diabetes is higher with increasing remoteness and socio-economic disadvantage.

Deaths related to diabetes were 1.9 times higher in remote and very remote areas compared with major cities, and 2.4 times as high in the lowest compared with the highest socio-economic areas.

"The prevalence of diabetes varies depending on where people live," AIHW spokesman Richard Juckes said.

"After adjusting for age, Australians living in remote and very remote areas were 1.3 times more likely to be living with diabetes and 1.8 times more likely to die with diabetes compared to those living in major cities."

Australians living with type 1 diabetes were granted access to subsidised blood sugar monitoring products from July 1.