Sugary drinks will be removed from the menu at all NSW hospitals and health facilities under a range of measures to combat obesity.
The NSW government will become the first state in Australia to apply a blanket ban on its hospital cafes, staff kiosks, vending machines and catering services from selling sugar-sweetened beverages with no nutritional value, such as Coke and Pepsi.
The restriction is part of NSW Health's new "Healthy Choices in Health Facilities" policy framework, which also limits the amount of junk food that can be sold to 25 per cent of a cafeteria or vending machine's offerings and requires most food to have a health star rating of 3.5 or above.
"We are working toward a 5 per cent reduction in overweight and obesity rates in adults by 2020 and there's no better way to start than right here on our own doorstep," said NSW Chief Health Officer Dr Kerry Chant in a statement.
"By establishing this model we hope it shows how a workable strategy can be successfully implemented across any organisation to assist healthier choices in any staffing environment."
The ban on sugary drink sales goes further than a proposed standard circulated to stakeholders in February and nullifies criticism from the dairy industry that its products were required to meet a higher threshold than soft drink manufacturers.
Under the draft version, sugary drinks were permitted when there was no healthier alternative.
The final version bans sugary drinks such as soft drinks, some flavoured waters, fruit drinks, cordials, iced teas, energy drinks and sports drinks, with an exception of milk drinks on account of their other nutritional benefits.
Soft drinks purchased externally will still be permitted at health facilities.
The Australian Beverages Council chief executive officer Geoff Parker said the peak body was "disappointed" with the decision.
"From the last Australian Health Survey, the department would know that soft drinks contribute less than 2 per cent of the average person's daily kilojoule intake," Mr Parker said.
"It would also know that in adults alone, over one-third of their kilojoules come from discretionary or treat foods, with soft drinks ranked eighth in that list of kilojoule contribution."
But NSW Health executive director Population Health Jo Mitchell said even that amount of extra kilojoules could lead to a weight gain of 1.5 kilograms a year.
"It's not a magic bullet - we know that - but we think that NSW should be leading by example, and providing healthier options in our hospital cafes is one of many things that can happen to address the issue of overweight and obesity," Dr Mitchell said.
Public health lawyer Alexandra Jones from The George Institute for Global Health said the announcement demonstrated that the health system could be set up to prevent conditions such as obesity, type 2 diabetes and tooth decay, not just treat them.
"Leadership by the health sector is a critical step. We saw this happen with smoking - where the health sector leads, workplaces and other public places follow," Ms Jones said.
Dairy Australia nutrition policy manager Melissa Cameron said the industry no longer had a problem with the guidelines now that soft drinks sales were banned.
"We think that core dairy has been well recognised in the guidelines," Ms Cameron said.
The Alfred Hospital in Melbourne reduced sugary drink sales by 36,500 a year by removing them from display at its main service cafe and placing them under the counter in 2010, while overall drinks sales have remained steady.
Three local health districts in NSW had already begun to restrict the sale of sugary drinks at their healthcare facilities before the policy framework.
In Victoria's south-west, 13 health districts have discontinued the sale of sugary drinks at their hospitals and facilities.
New Zealand has had a government-enforced ban on the sale of sugar-sweetened drinks at healthcare sites since 2015 and Britain's National Health Service is considering a similar move.