The escalating burden of diabetes is increasing the risk of contracting tuberculosis (TB) and has a pervasive impact on TB treatment outcomes. Therefore, we conducted this systematic review and meta-analysis to examine the burden of diabetes among TB patients and assess its impact on TB treatment in South Asia (Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, India, Pakistan, and Sri Lanka). PubMed, Excerpta Medica Database (EMBASE), and CINAHL databases were systematically searched for observational (cross-sectional, case-control and cohort) studies that reported prevalence of diabetes in TB patients and published between 1 January 1980 and 30 July 2020. A random-effect model for computing the pooled prevalence of diabetes and a fixed-effect model for assessing its impact on TB treatment were used. The review was registered with PROSPERO number CRD42020167896. Of the 3463 identified studies, a total of 74 studies (47 studies from India, 10 from Pakistan, four from Nepal and two from both Bangladesh and Sri-Lanka) were included in this systematic review: 65 studies for the prevalence of diabetes among TB patients and nine studies for the impact of diabetes on TB treatment outcomes. The pooled prevalence of diabetes in TB patients was 21% (95% CI 18.0, 23.0; I2 98.3%), varying from 11% in Bangladesh to 24% in Sri-Lanka. The prevalence was higher in studies having a sample size less than 300 (23%, 95% CI 18.0, 27.0), studies conducted in adults (21%, 95% CI 18.0, 23.0) and countries with high TB burden (21%, 95% CI 19.0, 24.0). Publication bias was detected based on the graphic asymmetry of the funnel plot and Egger’s test (p < 0.001). Compared with non-diabetic TB patients, patients with TB and diabetes were associated with higher odds of mortality (Odds Ratio (OR) 1.7; 95% CI 1.2, 2.51; I2 19.4%) and treatment failure (OR 1.7; 95% CI 1.1, 2.4; I2 49.6%), but not associated with Multi-drug resistant TB (OR 1.0; 95% CI 0.6, 1.7; I2 40.7%). This study found a high burden of diabetes among TB patients in South Asia. Patients with TB-diabetes were at higher risk of treatment failure and mortality compared to TB alone. Screening for diabetes among TB patients along with planning and implementation of preventive and curative strategies for both TB and diabetes are urgently needed.