The watchdog said it would not uphold complaints against the Change4Life print ad, despite objection to its content from the computer games industry.
Bearing the line "Risk an early death, just do nothing" the ad shows a young boy holding a PlayStation controller and staring at a TV.
The ASA justified its decision not to act on the basis that the ad "did not claim that playing computer or console games alone would lead to illness or premature death".
Earlier this month, computer games news website MCV submitted an official complaint to the ASA on the grounds that the ad was "unrepresentative of the positive effect video games have on the UK's youth". The watchdog said that 25 members of the public had made similar complaints about the campaign.
But the ASA responded: "The [ASA] council considered that most readers would understand that the ad was discouraging a sedentary lifestyle and used the example of playing a console game as an illustration of the type of behaviour which might lead to long-term health problems if no exercise is taken alongside more sedentary activities."
The ad was created by charities Cancer Research, the British Heart Foundation and Diabetes UK in support of the Department of Health's anti-obesity campaign.
The ASA decision could anger the gaming industry, which feels gaming is treated as an easy target by moral crusaders, while other sedentary pastimes, such as watching television -- a mainstay of the advertising industry -- get overlooked.
MCV said the ad implied that "by preventing their child from playing games, they will help ensure their future health. Not only is this strictly not true, but runs the risk of hurting small businesses."
MCV's complaint followed a meeting between the Entertainment and Leisure Software Publishers Association (Elspa) with the DoH over the ad's content. Elspa told the department that the ad contradicted the responsible position taken by the gaming industry.
In a separate development, Sony is considering legal action over the use of its controller in the ad.
Change4Life is a government initiative aimed at preventing people from becoming overweight by encouraging them to eat better and exercise more.