Children with congenital heart disease (CHD) remain at risk for neurodevelopmental impairment despite improved perioperative care. Our prospective cohort study aimed to determine the relationship between perioperative brain volumes and neurodevelopmental outcome in neonates with severe CHD. Pre- and postoperative cerebral MRI was acquired in term born neonates with CHD undergoing neonatal cardiopulmonary bypass surgery. Brain volumes were measured using an atlas prior-based automated method. One-year neurodevelopmental outcome was assessed with the Bayley-III. CHD infants (n = 77) had lower pre- and postoperative total and regional brain volumes compared to controls (n = 44, all p < 0.01). CHD infants had poorer cognitive and motor outcome (p ≤ 0.0001) and a trend towards lower language composite score compared to controls (p = 0.06). Larger total and selected regional postoperative brain volumes were found to be associated with better cognitive and language outcomes (all p < 0.04) at one year. This association was independent of length of intensive care unit stay for total, cortical, temporal, frontal and cerebellar volumes. Therefore, reduced cerebral volume in CHD neonates undergoing bypass surgery may serve as a biomarker for impaired outcome.