Promoting physical activity (PA) and reducing sedentary behaviour (SB) may exert beneficial effects on the older adult population, improving behavioural, functional, health and psychosocial outcomes in addition to reducing health, social care and personal costs. This paper describes the planned economic evaluation of SITLESS, a multicountry three-armed pragmatic randomised controlled trial (RCT) which aims to assess the short-term and long-term effectiveness and cost-effectiveness of a complex intervention on SB and PA in community-dwelling older adults, based on exercise referral schemes enhanced by a group intervention providing self-management strategies to encourage lifestyle change. A within-trial economic evaluation and long-term model from both a National Health Service/personal social services perspective and a broader societal perspective will be undertaken alongside the SITLESS multinational RCT. Healthcare costs (hospitalisations, accident and emergency visits, appointment with health professionals) and social care costs (eg, community care) will be included in the economic evaluation. For the cost-utility analysis, quality-adjusted life-years will be measured using the EQ-5D-5L and capability well-being measured using the ICEpop CAPability measure for Older people (ICECAP-O) questionnaire. Other effectiveness outcomes (health related, behavioural, functional) will be incorporated into a cost-effectiveness analysis and cost-consequence analysis. The multinational nature of this RCT implies a hierarchical structure of the data and unobserved heterogeneity between clusters that needs to be adequately modelled with appropriate statistical and econometric techniques. In addition, a long-term population health economic model will be developed and will synthesise and extrapolate within-trial data with additional data extracted from the literature linking PA and SB outcomes with longer term health states. Methods guidance for population health economic evaluation will be adopted including the use of a long-time horizon, 1.5% discount rate for costs and benefits, cost consequence analysis framework and a multisector perspective. The study design was approved by the ethics and research committee of each intervention site: the Ethics and Research Committee of Ramon Llull University (reference number: 1314001P) (Fundació Blanquerna, Spain), the Regional Committees on Health Research Ethics for Southern Denmark (reference number: S-20150186) (University of Southern Denmark, Denmark), Office for Research Ethics Committees in Northern Ireland (ORECNI reference number: 16/NI/0185) (Queen's University of Belfast) and the Ethical Review Board of Ulm University (reference number: 354/15) (Ulm, Germany). Participation is voluntary and all participants will be asked to sign informed consent before the start of the study. This project has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement number 634 270. This article reflects only the authors' view and the Commission is not responsible for any use that may be made of the information it contains. The findings of the study will be disseminated to different target groups (academia, policymakers, end users) through different means following the national ethical guidelines and the dissemination regulation of the Horizon 2020 funding agency. Use of the EuroQol was registered with the EuroQol Group in 2016. Use of the ICECAP-O was registered with the University of Birmingham in March 2017.