The council said it would help existing foster carers who smoke to quit
Smokers in a north-east London borough will not be able to foster children from January 2010 - unless there are "exceptional circumstances".
The ban was passed on Tuesday evening by Redbridge councillors who voted unanimously in favour of the policy.
Redbridge Council wants to protect children from "the damaging effects of passive and second-hand smoke".
But the Fostering Network said it was concerned the policy could prevent good people from becoming foster parents.
Cabinet member for children, Tory councillor, Michael Stark, said: "We know this is a difficult issue because some people will feel it is an intrusion on personal freedoms, but we also know that smoking increases the risk of serious illness in childhood."
A spokesman for the national charity Fostering Network said: "We certainly view this as a good move in terms of creating a smoke-free environment for a child, but we don't agree that a blanket ban on any smokers becoming foster carers is the right thing."
The council said the new policy was the result of scientific evidence which showed second-hand smoke to be a cause of lung cancer and childhood respiratory disease.
It said young children were particularly susceptible to the effects of second-hand smoke because their lungs and airways are small and their immune systems immature.
The risk of cot death, asthma, middle ear disease, pneumonia and bronchitis is also said to be higher if children live in a home where people smoke.
All new applicants to the foster care programme will be told at an early stage that they will not be able to foster if they smoke, unless there are "exceptional circumstances", the council said.
Existing foster carers who smoke will be given help to give up.
A spokesperson for the smokers' rights group Forest: "This is another attempt to stigmatise smokers and separate them from the rest of society.
"This discriminates against plenty of people who would have made excellent foster carers, and so it is damaging not only for them but also for the children that they would have fostered."
The plans met with mixed reactions from foster carers before the vote but the majority of fostered children consulted previously were in favour of the policy.