The UK Government wants to make it an offence to sell 'nicotine inhaling products' to anyone under the age of 18, except where it is used as licensed medicine.
Health minister Jane Ellison said: 'Second-hand smoke is a real threat to children's health and we want them to grow up free from the risks of smoking.
'The only effective way to protect children is to prevent them breathing secondhand smoke and our plans to stop smoking in cars carrying children will help us to do this.'
The World Health Organisation found that second-hand smoke is a 'real and substantial threat to child health', the DoH said.
Health problems have included increased susceptibility to pneumonia and bronchitis, worsening of asthma, decreased lung function, and sudden infant death syndrome, it added.
The British Lung Foundation estimates that 430,000 children are exposed to second-hand smoke in their family car every week.
Dr Penny Woods, the charity's chief executive, said she was 'delighted' by the Government's proposals.
She said: 'We are now closer than ever to helping protect the hundreds of thousands of children exposed to dangerous concentrations of second-hand smoke in cars every week.'
Campaign group Action on Smoking and Health welcomed plans to outlaw smoking in cars with children but called for a blanket ban covering adults in vehicles as well.
The group's chief executive Deborah Arnott said: 'We are delighted that the Government is to press ahead with regulations to prohibit smoking in cars containing children.
'As with the smoke-free public places law, this is a popular measure that will largely be self-enforcing. However, secondhand smoke is just as harmful to adults as children and it makes it more difficult to enforce if it only applies to some cars, not all. Seatbelt laws don't just apply to children, why should smoke-free car laws?'
But smokers' group Forest said plans to ban smoking in cars carrying children were 'unnecessary, excessive and impractical'.
The group's director Simon Clark said: 'The Government is taking a sledgehammer to crack a nut. The overwhelming majority of smokers know smoking in a car with children is inconsiderate and they don't do it.
'How is it going to be enforced? The police have better things to do than stop drivers they see smoking in case there's a child in the back.
'It's yet another example of government interfering in people's lives for no good reason.
'The next step will be a ban on smoking in all private vehicles followed by measures to prevent smoking in the home.'
