The NHS would save £6.7 billion a year if everyone followed a completely plant-based diet, a study by the Vegan Society suggests.
Researchers say cutting out meat and dairy could lead to 2.1 million fewer cases of diseases such as cancer, cardiovascular disease and diabetes.
And the reduced ill health would improve people's quality of life, amounting to a gain of 170,000 quality-adjusted life years for the entire population.
The financial savings would be enough to fund seven hospitals or cover the annual salaries of 64,990 consultants or 184,920 nurses, it added.
The findings are published in a report from the Office of Health Economics, commissioned by the Vegan Society.
Researchers say cutting out meat and dairy could lead to 2.1 million fewer cases of diseases such as cancer, cardiovascular disease and diabetes
The campaign group said the results should prompt the government to promote vegan diets through public health campaigns.
But critics last night (SUN) accused the activists of 'forcing their preferences on others' in a 'fundamental attack on freedom of choice'.
And they highlighted recent studies showing that vegan diets are not necessarily healthier and can be highly processed.
Report author Dr Chris Sampson, from the Office of Health Economics, a research and consultancy firm, said: 'There is now compelling evidence that plant-based diets can benefit people's health.
'Our analysis is an important step towards understanding how dietary choices affect population health and NHS spending in general.
'For every million people who switch to a vegan diet, the expected reduction in disease could save the NHS as much as £121 million.'
Claire Ogley, head of campaigns, policy and research at the Vegan Society, said: 'It is encouraging to see increasing evidence that plant-based diets can not only benefit individual health, but also benefit the NHS more widely .
'As the report illustrates, wider adoption of plant-based diets could free up billions of pounds of funding to reinvest in England's hospitals and services.
The NHS website says that to have a 'healthy, balanced diet' people should try to 'eat some beans, legumes, fish, eggs, meat and other proteins'
'Policymakers should consider supporting and encouraging plant-based diets as part of public health campaigns to deliver these health benefits in Britain.'
The Vegan Society said the acceptance of vegan diets has increased dramatically in recent years, with those making the switch citing a variety of reasons including perceived health benefits, reduced environmental impact and improved animal welfare.
It said the transition to a vegan diet is an opportunity to consume more health-promoting plant foods such as whole grains, nuts, legumes, fruits and vegetables, while cutting out the saturated fat and cholesterol found in meat, milk and eggs.
However, the NHS website says that to have a 'healthy, balanced diet' people should try to 'eat some beans, legumes, fish, eggs, meat and other proteins'.
A survey of 1,868 meals last week found that vegan fast foods tend to be lower in protein and sodium and higher in carbohydrates and sugar than their meaty counterparts.
According to the Vegan Society, the use of vegan diets has increased dramatically in recent years
Mo Metcalf Fisher, director of external affairs at the Countryside Alliance, said: 'Once again, plant-based diet advocates are trying to impose their preferences on others in what can only be described as a fundamental attack on freedom of choice.
'Recent studies show that plant-based alternatives are certainly not always healthier and easy to process.
'Meat and dairy offer a range of health benefits as part of a balanced diet – a diet enjoyed by the majority of the UK population.
'The NHS is right to continue to offer patients a range of healthy options, rather than bowing to pressure groups who want to take away the right to personal choice.'