The ongoing Coronavirus Disease (COVID-19) pandemic has so far affected more than 500 million people. Lingering fatigue and cognitive difficulties are key concerns because they impede productivity and quality of life. However, the prevalence and duration of neurocognitive sequelae and association with functional outcomes after COVID-19 are unclear. This longitudinal study explored the frequency, severity and pattern of cognitive impairment and functional implications 1 year after hospitalisation with COVID-19 and its trajectory from 3 months after hospitalisation. Patients who had been hospitalised with COVID-19 from our previously published 3-months study at the Copenhagen University Hospital were re-invited for a 1-year follow-up assessment of cognitive function, functioning and depression symptoms. Twenty-five of the 29 previously assessed patients (86%) were re-assessed after 1 year (11±2 months). Clinically significant cognitive impairments were identified in 48-56 % of patients depending on the cut-off, with verbal learning and executive function being most severely affected. This was comparable to the frequency of impairments observed after 3 months. Objectively measured cognitive impairments scaled with subjective cognitive difficulties, reduced work capacity and poorer quality of life. Further, cognitive impairments after 3 months were associated with the severity of subsequent depressive symptoms after 1 year. In conclusion, the stable cognitive impairments in approximately half of patients hospitalized with COVID-19 and negative implications for work functioning, quality of life and mood symptoms underline the importance of screening for and addressing cognitive sequelae after severe COVID-19.