It estimated that £1.2 billion "invested" in sport – including actual spending and volunteers' time – in 2016-17 created £3.4 billion in "social value", BBC reported.
Sheffield Hallam University found that for every £1 invested in sport, £2.88 is effectively generated in different ways, including lower healthcare costs.
The role of sport in preventing heart disease and dementia was part of this.
Economists around the world use a "social return on investment" formula to quantify things like well-being that cannot normally be given a financial value.
The Wales version of this formula is being used by public bodies like Sport Wales to put a value on their work.
It estimates the social value of factors including improved health, enhanced subjective well-being, reduced crime, and improved education.
Subjective well-being – which puts value on improved life satisfaction because of sport participation – accounted for 60.6 percent of the overall figure in Wales.
Researchers quantified its value by estimating the equivalent money needed to increase someone well-being by the same amount.
The report also calculated improved health because of participation in sport saved £295.2 million.
About £102.1 million of this was down to the reduced prevalence of dementia, and £97.6 million was because of the reduced risk of coronary heart disease and stroke.
This is worked out by estimating the number of potential cases averted by sport participation multiplied by the average annual cost per person diagnosed with the condition.
But the report pointed out that a "notable omission" was the cost of sports injuries, for which the data was not readily available.
The research also suggested sport generated £1.1 billion for the Welsh economy.
Sport Wales' head of insight and policy, Owen Hathway, said the report made a "strong case for continued investment into sporting initiatives".
The body undertook the research to demonstrate the contribution of sport to the goals for Wales under the Well-being of Future Generations Act Wales.
Mr. Hathway said the findings showed "how sport can, and does, support health outcomes, employability, social cohesion, the volunteer sector, crime prevention and beyond".