The group will work closely with Diabetes UK Cymru and the pioneering Diabetes Peer Support Programme, a charity supporting people living with the condition.
It will also provide a forum for organisations, policy makers and people with diabetes in Wales.
The launch meeting of the group on diabetes will be held in the Welsh Assembly’s Ty Hywel Building on Wednesday March 17.
More than 146,000 people have been diagnosed with the condition across Wales and a further 50,000 are estimated to have the condition and not yet know it.
Nine out of ten people with the condition have Type Two diabetes, which is often associated with being overweight.
Diabetes costs the NHS in Wales nearly £500m a year and, if poorly controlled, can lead to heart disease, stroke, kidney disease, blindness and amputation.
Dai Williams, national director of Diabetes UK Cymru, said: “We are delighted to be working with Jeff Cuthbert AM and the Diabetes Peer Support Programme to set up the new Cross Party Group on Diabetes.
“Diabetes is a serious life-long condition which is increasing rapidly across Wales and nearly one in 20 people already have the condition.
“We look forward to working with the Cross Party Group on Diabetes to inform AMs, who represent thousands of people with diabetes across Wales, what services currently exist for people with the condition and how they can be supported.”
Mr Cuthbert, who has Type Two diabetes, said: “It gives me great pleasure to assist in the foundation of the Cross Party Group, which has support from all of the parties and the participation of Diabetes UK Cymru and the Diabetes Peer Support Programme.
“I am happy to be working together to help raise the importance of minimising the risk of developing Type Two diabetes while also encouraging those with the condition to live healthy and fulfilling lives.”