In 2011, intranasally administered live attenuated influenza vaccine (LAIV) was approved in the EU for prophylaxis of seasonal influenza in 2-17-year-old children. Our objective was to estimate the potential epidemiological impact and cost-effectiveness of an LAIV-based extension of the influenza vaccination programme to healthy children in Germany. An age-structured dynamic model of influenza transmission was developed and combined with a decision-tree to evaluate different vaccination strategies in the German health care system. Model inputs were based on published literature or were derived by expert consulting using the Delphi technique. Unit costs were drawn from German sources. Under base-case assumptions, annual routine vaccination of children aged 2-17 years with LAIV assuming an uptake of 50% would prevent, across all ages, 16 million cases of symptomatic influenza, over 600,000 cases of acute otitis media, nearly 130,000 cases of community-acquired pneumonia, nearly 1.7 million prescriptions of antibiotics and over 165,000 hospitalisations over 10 years. The discounted incremental cost-effectiveness ratio was <euro> 1,228 per quality-adjusted life year gained from a broad third-party payer perspective (including reimbursed direct costs and specific transfer payments), when compared with the current strategy of vaccinating primarily risk groups with the conventional trivalent inactivated vaccine. Inclusion of patient co-payments and indirect costs in terms of productivity losses resulted in discounted 10-year cost savings of <euro> 3.4 billion. In conclusion, adopting universal influenza immunisation of healthy children and adolescents would lead to a substantial reduction in influenza-associated disease at a reasonable cost to the German statutory health insurance system. On the basis of the epidemiological and health economic simulation results, a recommendation of introducing annual routine influenza vaccination of children 2-17 years of age might be taken into consideration.