The new framework for practice by the Royal College of Paediatrics and Child Health (RCPCH) also said prematurely born babies do not always have to be treated, despite increased survival rates and improved technology since the previous framework was published 10 years ago.
The updated guidelines provided three sets of circumstances when limiting treatment could be "in the child's best interests."
This includes withdrawing treatment if it is unlikely to prolong life significantly or will not help improve the quality of life.
"For some, continuing life-sustaining treatment is simply prolonging suffering in the face of the inevitable. For these babies, no treatment is going to cure them and their quality of life is non-existent," the RCPCH's former vice president Dr. Simon Newell was quoted as saying on the college's official website.
Older terminally ill children can consent to withdrawal of treatment, if supported by their parents and the clinical team, according to the new guidelines.
The new RCPCH guidance was written by medics, lawyers and ethicists to provide an ethical and legal framework for doctors making decisions on end-of-life care.