Babies under four months are to be immunised against the infectious bug rotavirus from September next year.
The new programme announced by the Department of Health, hopes to halve the number of vomiting and diarrhoea cases caused by rotavirus with could be 70% fewer hospital stays as a result.
The bug currently causes around 140,000 diarrhoea cases a year in under fives. It also leads to hospital stays for nearly one in ten – around 14,000 - of those who get it in the UK.
Around 840,000 infants in the UK under four months will be offered the vaccine, which will be given orally as two separate doses of liquid drops to all children starting when they are two months old.
The programme is expected to cost around £25m a year but is estinated to save the NHS around £20m per year through fewer stays in hospital, fewer GP and A&E visits and fewer calls to NHS Direct.
"It is upsetting to see our children ill in hospital," said chief medical officer Dame Sally Davies.
"Rotavirus is the most common cause of diarrhoea in young children and this vaccine will protect our children and reduce hospital admissions for serious rotavirus infection."
In the US, studies have shown that rotavirus-related hospital admissions for young children have been cut by more than two thirds since rotavirus vaccination was introduced.
"Anything we can do to prevent this illness should be seen as a positive development and we welcome the announcement of the vaccination programme for young babies," said Dr Clare Gerada, chair of the Royal College of GPs.
"Parents should be reassured that it can be easily incorporated into the routine childhood immunisation programme."