The size reduction of a laser cavity is highly desirable during the process of designing a laser system, as it allows reducing the weight and size of the laser system as a whole, as well as increasing the robustness of the system’s operation under severe environmental conditions. This cavity length reduction should be achieved without sacrificing the output laser beam quality, especially in the far field region. One approach to reducing the laser cavity length is based on the selective generation of single higher order transverse radiation modes. We show that a single transverse mode generation is essential for producing high radiance, high beam quality far field distributions with short length laser cavities. In the past, the selection of a single high order transverse mode was performed by employing amplitude masks or localized, non-uniform pumping of the gain medium. Both approaches resulted in significant cavity losses, and an associated increase in the laser oscillation threshold, as well as a reduction in laser efficiency. In this work, we provide details of a “lossless” intra-cavity mode formation technique employing circular-shaped diffractive phase structures. The radial size of the diffractive structures can be optimized for the selection of specific transverse higher order laser cavity modes. We also define a lossless external-cavity transformation of the selected output transverse higher order laser cavity modes with diffractive phase plates that results in the formation of far field distributions containing high intensity on-axis peaks. Spatial characteristics of the transformed output laser cavity modes were analyzed, including encircled beam powers, as well as encircled power M2 functions. Results of this work can be applied to reducing cavity lengths of various laser systems.