Excess dietary sodium is a leading cause of death and disability globally. Because packaged foods are a major source of sodium in many countries, including Australia, mandatory limits for sodium might improve population health. We aimed to estimate the long-term health and economic effect of mandating such thresholds in Australia. We used a multiple cohort, proportional, multistate, life table model to simulate the effect of mandating either the WHO global sodium benchmarks or the currently non-mandatory Australian Healthy Food Partnership (HFP) sodium targets. We compared maintaining the current sodium intake status quo with intervention scenarios, using nationally representative data on dietary intake, sodium in packaged foods, and food sales volume. Blood pressure and disease burden data were obtained from the Global Burden of Diseases, Injuries, and Risk Factors Study. The effect of sodium reduction on blood pressure and disease risk was modelled on the basis of meta-analyses of randomised trials and cohort studies. Intervention and health-care costs were used to calculate the incremental cost per health-adjusted life-year (HALY) gained. Costs and HALYs were discounted annually at 3%. Compared with the status quo intervention, mandating the WHO benchmarks could be cost saving over the first 10 years (AUD$223 [95% uncertainty interval 82-433] million saved), with 2743 (1677-3976) cardiovascular disease deaths and 43 971 (26 892-63 748) incident cardiovascular disease events averted, and 11 174 (6800-16 205) HALYs gained. Over the population's lifetime, the intervention was cost effective (100·0% probability). Mandating the HFP sodium targets was also estimated to be cost effective (100·0% probability), but with 29% of the health benefits compared with the WHO benchmarks. Our modelling study supports mandating sodium thresholds for packaged foods as a cost-effective strategy to prevent death and disease in Australia. Although making Australia's voluntary reformulation targets mandatory might save thousands of lives, mandating the WHO global benchmarks could yield substantially greater health gains. None.