Healthcare-related expenditure for diabetes is increasing at an alarming rate all over the world, resulting in a huge burden on patients. The purpose of this cross-sectional study was to estimate the healthcare cost incurred by patients with type 2 diabetes mellitus (T2DM). The study included 531 registered patients with diabetes of more than 1 year. All the treatment-related records of the last 12 months were collected from the patients’ guide books. Data were analyzed to determine the average cost (exchange rate: US$1 = Bangladeshi Taka 80) incurred by the diabetic patients in treating the disease and were calculated based on the total amount spent by them to that of total number of patients. The mean ± SD age of the patients (male 46.5 % and female 53.5 %) was 53.0 ± 10 years with duration of diabetes 9 ± 6.7 years. The average annual cost of care was US$314 (direct cost US$283 and indirect cost US$31). Drugs accounted for the largest share (68 %) of the direct cost, followed by laboratory investigations (12.5 %) and consultation fees (11.7 %). Results of bivariate analysis showed that the annual direct cost of care significantly increased with age, monthly household income, duration of diabetes, and the number of co-morbidities/complications. However, results of multivariable analysis showed that, except age, all other remained significant (p < 0.001) explanatory variable of direct cost. The annual cost of diabetes care per person in the outpatient department of a tertiary care facility was US$314. Based on this finding, it is estimated that the total annual burden of some 5.1 million diabetic patients will be US$1.5 billion, which is a large burden for a developing country like Bangladesh. Primary prevention should be in focus to combat the economic burden of diabetes.