With soaring rates of childhood obesity, the School Food Trust's report advises the Government that schools should stop selling confectionary, crisps and fizzy drinks.
Instead, it suggests providing healthier alternatives such as fruit, yoghurts, water and fruit juices.
Zoe Harrison, Care Advisor at Diabtes UK, said: “We estimate that there up to 1,000 kids in the UK with Type 2 diabetes and all these cases are directly linked to increasing waistlines."
"Surrounding schoolchildren with vending machines full of unhealthy snacks is sending out the wrong message. Children need a choice of healthier snacks, as we are at risk of mirroring trends in the US where Type 2 diabetes is reaching epidemic levels.
"The Government needs to deliver on its public health promises now, otherwise the future looks bleak."