Patients are also at a greater risk of other potentially fatal conditions like angina, stroke and needing amputations, the report shows.
The excess risk is higher among people with Type 1 diabetes.
Type 1 diabetes, which develops when the body cannot produce any insulin, is an autoimmune condition that accounts for 10pc of all cases of diabetes.
The authors of the report, which was published in Britain, said that the death rate among people with the condition is 135pc higher than the general population.
People with Type 2 diabetes, which accounts for 90pc of all cases and occurs when the body does not produce enough insulin for it to function properly, have a 36pc excess risk, the authors add.
Diabetes campaigners said that many sufferers are not achieving the recommended cholesterol levels and one in 10 are not receiving an annual cholesterol check.
One heart expert, Professor Peter Weissberg, said: "These figures show that the biggest problem with diabetes is its devastating effect on the heart and circulation.
"It's essential that, firstly, everyone with diabetes is identified and, secondly, they receive appropriate treatment and advice to help them avoid cardiovascular complications.
"Still more important is the need to prevent diabetes from occurring in the first place by tackling the increasing levels of obesity in our society, particularly in our children," Prof Weissberg added.
Dr Bob Young, lead clinician of the audit and clinical lead for Britain's National Diabetes Information Service, said: "These results highlight the huge impact of diabetes on disability and premature death.
"Much can be done to reduce these risks if all healthcare sectors work together with people who have diabetes.
"Some districts have appreciably lower diabetes related complications than others. Improving treatment for diabetes should be a top priority for all clinical services."