There is a knowledge gap of health utility values for Type 2 Diabetes Mellitus (T2DM) complications in Malaysia. This study aimed to estimate EQ-5D-5L utility values and evaluate health-related quality of life (HRQoL) for Malaysian T2DM associated with complications and clinical characteristics. A cross-sectional study was conducted on T2DM patients at a tertiary hospital outpatient using the Malay and English version of the EQ-5D-5L questionnaire. Health utility values were derived using the Malaysian EQ-5D-5L value set. Ordinary least squares (OLS) multivariable regression model was used to estimate the health utility decrements associated with T2DM-related complications and clinical characteristics. A total of 513 T2DM patients were recruited. Overall, pain was the most affected of all five EQ-5D-5L dimensions. Patients with foot ulcer, amputation, severe heart failure and frequent hypoglycemia reported more problems collectively in all EQ-5D-5L dimensions. Older age, lower education level, longer duration of T2DM, urine protein creatine index (UPCI) > 0.02g/mmol, and injection therapy were significantly associated with lower EQ-5D-5L utility values (p < 0.004, Bonferroni adjusted). The lowest unadjusted utility values were reported for severe heart failure 0.65 (interquartile range, IQR 0.50), frequent hypoglycemia 0.74 (0.22) and being amputated 0.78 (0.47). In the multivariable regression model after controlling for sociodemographic and clinical characteristics, the largest utility value decrement was observed for amputation (-0.158, SE 0.087, p = 0.05), frequent hypoglycemia (-0.101, SE 0.030, p = 0.001), myocardial infarction (-0.050, SE 0.022, p = 0.022) and obesity (-0.034, SE 0.016, p = 0.029). Larger utility value decrements were found for severe stages of complications. These findings suggest the value of defining severity of complications in utility elicitation studies. The utility decrement quantified for different T2DM complication severity will be useful for economic evaluations within diabetic-related fields.