According to the study, kids who sat around for most of the day were less likely to have normal levels of co-ordination, even in simple tasks such as hopping and jumping.
Importantly, brief bursts of strenuous exercise did not make up for the damage apparently done by spending the rest of the day sitting, the 'Daily Mail' reported.
The Portuguese researchers said that while it is important to encourage children to take part in sport, limits should also be set on the amount of time spent sedentary.
Researchers tracked the movements of more than 200 children aged nine and 10 using a pedometer-like gadget to measure activity levels over five days.
The children were also weighed and measured and put through a battery of tests specifically designed to test balance, speed, agility and co-ordination.
These included walking backwards on a low beam, jumping from side to side, hopping over a stack of blocks and stepping from one box onto another box without falling off.
More From This Section
However, the impact on co-ordination was greatest for the boys.
Girls who spent more than three-quarters of their time inactive four to five times less likely to normal co-ordination than those who sat less.
However, the couch potato boys were five to nine times less likely to have normal co-ordination,
The study published in the Journal of Human Biology,took into account the children's height, weight and the amount of strenuous exercise done.
While the link between lack of exercise and obesity has been extensively researched, the study is one of the first to look at the effects on something on as basic as co-ordination.
Researcher Dr Luis Lopes, of the University of Minho, said that good co-ordination has been linked to a healthy weight and heart, strong muscles and endurance but takes "practice, encouragement, feedback and instruction".
"Childhood is a critical time for the development of motor co-ordination skills which are essential for health and well-being," Lopes said.