It said the approach was needed to combat the "silent epidemic" of inactivity posing a risk to the health of people in England.
Schools and workplaces should also be encouraged to get more pupils and staff cycling and walking.
A recent report in the Lancet said inactivity was now causing as many deaths as smoking.
Latest figures suggest six in 10 men and seven in 10 women are not doing the recommended levels of physical activity.
The figures are little better for children.
In particular, levels of cycling and walking are falling - with England lagging well behind other European countries, such as the Netherlands and Denmark. Only 11 minutes a day on average is spent cycling or walking.
Prof Mike Kelly, from NICE, said: "As a nation, we are not physically active enough and this can contribute to a wide range of health problems."
Dr John Middleton, vice-president of the Faculty of Public Health, said cycling and walking needed to be made an "easy option".
"It's not necessarily about spending more money on transport, but investing existing money in our health by rethinking the way in which budgets are being spent."
"We want to see more people walking and cycling," he added.
The move of the responsibility for tackling obesity from the NHS to local Health and Wellness Boards in 2013 is a real opportunity to do things differently rather than trying to do more-for-less, which clearly has not been cost effective.
Tackling inactivity will require joined-up thinking at the level of local planing, schools, community groups, GPs, charities like Sport England and the many companies committed to health and wellness initiatives, because what we have done up to now has not worked. Time to think differently - one step at a time.