Diabetes mellitus is a well-established risk factor for severe COVID-19; however, few studies have examined this association during the Omicron-dominant period. We conducted a population-based study using surveillance data from the Okayama City Public Health Center in Japan to compare the risk of severe COVID-19 and pneumonia among patients with diabetes mellitus between the pre-Omicron (March 2020–December 2021) and Omicron-dominant (January–September 2022) periods. Among 98,905 COVID-19 patients aged 10 years or older, we calculated adjusted odds ratios (aORs) controlling for age, sex, smoking status, comorbidities, obesity, and the number of COVID-19 vaccine doses received. In the pre-Omicron period, diabetes mellitus was significantly associated with severe COVID-19 (aOR: 1.36; 95% CI: 1.03-1.78), and this association persisted in the Omicron-dominant period (aOR: 1.54; 95% CI: 1.10-2.17). Similar findings were observed for pneumonia. The association was more pronounced among patients aged 40-69 years than among those aged 70 years or older. These findings suggest that diabetes mellitus remains an important risk factor for severe COVID-19 even during the Omicron-dominant period, highlighting the need for continued clinical vigilance and early intervention in patients with diabetes mellitus.