Restaurants, pubs and cafes will be have to face public scrutiny, unless they make desserts smaller or less sweet, the government has said.
The government, as part of an obesity strategy started under David Cameron is already urging supermarkets to reduce sugar content in their products by 20%, but the latest initiative acknowledges that eating out has become more common and subsequently more damaging to the nation's waistline.
Health Secretary Jeremy Hunt told chains such as Pizza Express, Starbucks and McDonald's that they need to reduce the sugar content of puddings, cakes and croissants, and cut calories from fatty, savory foods like burgers and pizza.
Consumers will be able to check the companies' efforts to be healthier on a government-run website, although exactly how they will be compared has not been decided.
A sugar tax on soft drinks, announced in March by then-Chancellor George Osborne, is also expected to come into force in April 2018.
At the private meeting, Hunt told food companies that "doing nothing was not an option" and warned "You want to be on the right side of this debate."
Hunt said "Going out to eat is no longer a treat. It's a regular habit for many families and is contributing significantly to the extra calories and sugar that we all consume on a daily basis."
The changing habits of consumers cannot be ignored. The health secretary said that people are consuming more than a fifth of their sugar intake outside the home and a quarter of families took children to fast food outlets each week. Figures showed a third of children are overweight by the time they leave primary school.
Chief executive of Public Health England Duncan Selbie told the meeting the new measures were needed to improve nutrition across the board.
He said "We need a level playing field - if the food and drink bought in cafes, coffee shops and restaurants does not also get reformulated and portions rethought then it will remain often significantly higher in sugar and bigger in portion than those being sold in supermarkets and convenience shops. This will not help the overall industry to help us all make healthier choices."
Companies have been given three options, reduce the amount of sugar, make portions smaller or persuade customers to eat healthier alternatives.
Food industry leaders say they are already offering healthier options to customers, but admitted there could be concerns over taking sugar out of certain products.
A spokesman for the Food and Drink Federation said Hunt had stressed the importance of government and industry working together to tackle this important public health issue.