The National Institute for Clinical Excellence (Nice) says obese people with type 2 diabetes should be considered for gastric band surgery to help suppress their appetite.
Nice says 800,000 more people could be eligible for the procedure.
Although the upfront costs of the operation is around £5,500, a study suggests they could save the NHS money in the long term by reducing the rate of obesity-related conditions.
But some critics say more should be done to stop people becoming overweight in the first place.
ITV News Correspondent Lewis Vaughan Jones reports.