The work was produced by the Ulster University Economic Policy Centre for the Department of Finance.
It cautions that the costs of division are difficult to disentangle from other factors.
It also warns that it should not be concluded the costs represent potential achievable savings.
It says that in some cases there may be potential savings, but some costs are "unavoidable or would require significant investment to ameliorate."
As an example, as a legacy of the Troubles, Northern Ireland pays out more in police pensions than other comparable parts of the UK.
That is a cost which could not easily be reduced.
The last major report on the economic impact of division in Northern Ireland was produced in 2007 and put the cost at £1.5bn.
The new report uses a different methodology which focuses on recurring costs.
It says the most significant cost area is linked to policing and justice with a range of between £312m and £550m.
Other areas where significant extra costs are incurred are in mental health treatment and community relations.
However, the potential additional costs of division in housing and education are assessed as being modest.
Additional costs in housing are put at just £2.5m, while in education it is in the range of £16.5m - £95m.
Northern Ireland public services incur additional annual costs of up to £833m in which division may be a factor, according to a new report.