The poster, which is on Burley Street, in Leeds, shows a boy on his stomach, reading a book while holding a smouldering cigar.
The billboard has been put up just days after the World Health Organisation (WHO) released a report listing processed meats, such as sausages and bacon, as cancer-causing substances.
The report said eating as little as 50 grams of processed meat a day - around one sausage or two slices of bacon - raises the risk of developing bowel cancer by 18 per cent.
Elisa Allen, PETA associate director, said: "We all know how important it is to set a good example for our kids, and that means choosing habits - such as eating vegan meals - that will steer them towards a healthier life"
"The billboard will remind us all that, just as we should put down the cigarettes, we should put down the bacon butties and pick up fibre-rich, heart-healthy plant-based foods instead."