A method has been developed for determining residual stress based on displacement fields near drilled holes analyzed using 3D digital image correlation. Finite element modeling was used to determine corrections for analytical equations describing displacement fields near the blind holes, which made it possible to determine the residual stress distribution over a wide range of hole depth-to-hole diameter ratios and various areas of displacement field measurements using inverse method iterative calculations. The proposed method eliminates many drawbacks of traditional procedure based on strain gauges as hole eccentricity sensitivity and requirement of the relatively large span between holes. The method and testing setup, build-up of generally available components, were used to determine the residual stress distribution for 316 LVM samples processed by two methods from the large deformation group: hydrostatic extrusion (HE) and high-pressure torsion (HPT), by drilling 1.75 and 0.58-mm-diameter blind holes, respectively. In the case of the measurements performed on the surface of a HE-processed 16 mm bar cut along its diameter, a gradual change was revealed-from a compressive to a tensile residual stress distribution (from ~ − 300 MPa in the center to 400 MPa in 4 mm distance from the edge) in the longitudinal direction, with near-zero values in the radial direction. Moreover, the method was also adapted to perform measurements on the outside surface of the bar, which gave results consistent with those taken along the radius profile (~ 600 MPa longitudinal stress). Measurements on the top surface of a cylinder 10 mm in diameter and 1 mm high processed by HPT showed a high compressive residual stress in the center and a dominant shear component for the holes drilled at different distances from the center.