Chancellor George Osborne says a levy will be introduced in two years' time, with higher rates for the most sugary drinks.A sugar tax on soft drinks will be levied on fizzy drinks companies will raise £520m for primary school sports, Mr Osborne said.
However juices are to be exempt from the tax which be applied directly on manufacturers.
The new tax, which campaigners including Jamie Oliver have been pushing hard for in recent years, will come into effect in two years' time, giving manufacturers time to reduce sugar in their products.
There will be two bands – one for total sugar content above five grams per 100 millilitres and a second, higher band for the most sugary drinks with more than 8 grams per 100 millilitres.
Pure fruit juices and milk-based drinks will be excluded, and the smallest producers will have an exemption from the scheme.
Mr Oliver welcomed the news: "A profound move that will ripple around the world ....business can not come between our Kids health !! Our kids health comes first."
But Ian Wright, director general of the Food and Drink Federation, said: "We are extremely disappointed by today's announcement of a new tax on some of the UK's most successful and innovative companies. For nearly a year we have waited for an holistic strategy to tackle obesity. What we've got today instead is a piece of political theatre.
"The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs."
Many sugary natural juices contain more sugar, gram for gram, than fizzy drinks such as Coca Cola or Iron Bru. Coca Cola contains 10.6g per 100ml, Iron Bru contains 10.3g, and both will come under the sugar tax.
Juices and smoothies, which are often lunchbox favourites and can contain up to 14g of sugar per 100ml, will not.
Experts have previously said that a tax that differentiates between naturally occurring sugar and refined sugar could skew the market towards fruit juices without tackling the obesity crisis.
Action On Sugar (AOS) found more than a quarter of the juices, smoothies and fruit drinks they looked at had the same amount of sugar or more than Coca-Cola's 10.6g for every 100ml.
The survey of 200 drinks looked specifically at juices that were aimed at children or marketed as lunchbox-friendly.
