It says parents should set far more strict rules about healthy eating, and says sweets should not be given 'as a reward' or a regular gift.
The guidance also instructs families to consider 'TV-free days' or limits on screen time to make children more active.
The new guidance says parents should be advised about 'maintaining healthier physical activity and dietary habits most days (including at weekends) and during holidays (for example, the school summer holiday)'.
Tam Fry, from the National Obesity Forum, welcomed the strict advice.
He said: "Finally NICE is getting the message Sometimes you have to be cruel to be kind."
"Children, and maybe their parents too, will rebel against the advice that sweets should never be offered as treats on any day of the year - but both will welcome the advice long-term."
But Philip Davies MP said: "It's the worst kind of nannying and also counter-productive. You have got to wonder what planet these people are on.
"We are not all idiots, every parent knowns that chocolates and sweets are not health foods. What they should be saying is that children should be eating treats in moderation and as part of a balanced diet."
Professor Gillian Leng, NICE deputy chief executive and director of health and social care, said: "This guidance sets out the many things individuals can do to maintain a healthy weight that are known to be effective: walking more, limiting TV and other screen time, eating more healthily, avoiding sugary drinks and drinking less alcohol."