Trump, who signed on January 25 an executive order to begin the wall, has claimed it would cost $12 billion.
The DHS hopes to secure Congressional funding for the wall in April or May, and begin construction in September.
In the meanwhile, a White House spokeswoman has said that it would be "premature" to comment on a report that has not officially been presented to the President.
The DHS report estimates it will take four years to put a fence along the whole border.
Reuters criminal justice correspondent Julia Ainsely said the agency plans to start breaking ground in El Paso, San Diego and the Rio Grande Valley. This first phase is expected to be the least expensive to construct and is expected to cost around $360 million.
The third and final phase would be covering the remaining unspecified 1,080 miles (1,728 km), virtually sealing off the entire US-Mexico border.
Reuters quoted a source within DHS saying that the Trump administration would likely need to seize hundreds of miles of the privately-owned borderland from USA citizens under eminent domain in order to embark on the final phase.
Some 650 miles of fencing already in place has come at an expense of $7bn and Mr Trump's plans require extending the barrier into increasingly remote and mountainous regions, which raises the building costs significantly.
That estimate lines up pretty well with independent estimates for the cost of building a border wall.
DHS officials assume in the report that Congress will approve funding for the wall in April or May, and Mexico would eventually reimburse the us, even though its leaders have been adamant about not financing the project.
The senator, who has been an outspoken critic of the president, stressed that she's specifically concerned about the impact his executive action could have on homeland security workers and operations.