Fast food retailer KFC has begun removing all toys from its children's meals, in a move welcomed by anti-obesity lobby groups.

The fast food retailer will begin eliminating the toys from today and expects stocks to run out by the end of September.

A spokesman says the company made the decision because "it is the right thing to do".

The Obesity Policy Coalition's Jane Martin says other fast food chains should follow suit.

"I think it's a real win for parents," she said.

"Parents are so familiar with the pester power that these kinds of toys create.

"We'd really urge other fast food outlets, particularly McDonald's and Hungry Jack's, to follow this example and stop using toys and premiums to market junk food to kids."

Ms Martin says with one-in-four children overweight or obese, more steps need to be taken to reduce a child's exposure to toy-based marketing techniques.

"They're corporate Pied Pipers really, drawing our children in and then creating the pester power issue for parents to have to deal with," she said.