Aim To investigate the interplay of incident chronic kidney disease (CKD) and/or heart failure (HF) and their associations with prognosis in a large, population‐based cohort with type 2 diabetes (T2DM). Methods Patients aged ≥18 years with new‐onset T2DM, without renal disease or HF at baseline, were identified from the territory‐wide Clinical Data Analysis Reporting System between 2000 and 2015. Patients were followed up until December 31, 2020 for incident CKD and/or HF and all‐cause mortality. Results Among 102 488 patients (median age 66 years, 45.7% women, median follow‐up 7.5 years), new‐onset CKD occurred in 14 798 patients (14.4%), in whom 21.7% had HF. In contrast, among 9258 patients (9.0%) with new‐onset HF, 34.6% had CKD. The median time from baseline to incident CKD or HF (4.4 vs. 4.1 years) did not differ. However, the median (interquartile range) time until incident HF after CKD diagnosis was 1.7 (0.5‐3.6) years and was 1.2 (0.2‐3.4) years for incident CKD after HF diagnosis (P < 0.001). The crude incidence of CKD was higher than that of HF: 17.6 (95% confidence interval CI 17.3‐17.9) vs. 10.6 (95% CI 10.4‐10.9)/1000 person‐years, respectively, but incident HF was associated with a higher adjusted‐mortality than incident CKD. The presence of either condition (vs. CKD/HF‐free status) was associated with a three‐fold hazard of death, whereas concomitant HF and CKD conferred a six to seven‐fold adjusted hazard of mortality. Conclusion Cardiorenal complications are common and are associated with high mortality risk among patients with new‐onset T2DM. Close surveillance of these dual complications is crucial to reduce the burden of disease.