Older people with unhealthy diets have smaller brains, according to a new Australian study that researchers say is yet more proof that junk food has a terrible impact on health.

The study contains alarming findings about the effects of an unhealthy diet on a part of the brain called the hippocampus, which has been described as the filing cabinet or the bookcase of the brain.

Researchers studied about 250 people aged in their 60s in and around Canberra and took MRI scans to measure the size of the hippocampus.

"The hippocampus is absolutely central to learning and memory," said Associate Professor Felice Jacka, from Deakin University.

"Basically your hippocampus gets smaller as you age, and the difference we found between people with good diets and people with poor diets in terms of their left hippocampal volume, it counted for about 60 per cent of that aged-related decline. So it's a not insubstantial amount."

Professor Jacka said the study's findings were more proof that a bad diet causes not only physical but also mental problems.

"The quality of people's diets is related to their risk for depression in particular," she said.

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"What we haven't known until now is how that might actually work.

"And we've seen before in many of the animal experiments that if you manipulate diet you can change hippocampal function, but this is the first time we've seen it in humans.

"In a way food is like petrol for our body and if you put into your car petrol that is dirty or watered down you're really not going to get the best outcome from your car.

"And in the same way, the food that we put in our mouths needs to be of the best quality."

The researchers took into account many other factors, such as blood pressure, depression, socioeconomic status, education and gender.

"All of these sorts of factors we know are related to both diet and to hippocampal volume and so we took those into account when we looked at this relationship," Professor Jacka said.

She is calling for tougher restrictions on marketing and taxes on unhealthy foods.

The study has been published in the journal BMC Medicine.