Background: Central automated unit dose dispensing (cADD) with barcode-assisted medication administration (BCMA) has been shown to reduce medication administration errors (MAEs). Little is known about the cost-effectiveness of this intervention. Objective: To estimate the cost-effectiveness of cADD with BCMA compared to usual care. Methods: An economic evaluation was conducted alongside a prospective before-and-after effectiveness study in a Dutch university hospital. The primary effect measure was the difference between the rate of MAEs before and after implementation of cADD with BCMA, obtained by disguised observation in six clinical wards and subsequent extrapolation to the entire hospital. The cost-analysis was conducted from a hospital perspective with a 12-month incremental costing approach. The total costs covered the pharmaceutical service, nurse medication handling, wastage, and materials related to cADD. The primary outcome was the cost-effectiveness ratio expressed as costs per avoided MAE, obtained by dividing the annual incremental costs by the number of avoided MAEs. The secondary outcome was the cost-effectiveness ratio expressed as costs per avoided potentially harmful MAE (i.e. MAEs with the potential to cause harm). Results: The intervention was associated with an absolute MAE reduction of 4.5% and a reduction of 2.7% for potentially harmful MAEs. Based on 2,260,870 administered medications in the entire hospital annually, a total of 102,210 MAEs and 59,830 potentially harmful MAEs were estimated to be avoided. The intervention was associated with an increased incremental cost of €1,808,600 annually. The cost-effectiveness ratio was €17.69 per avoided MAE and €30.23 per avoided potentially harmful MAE. Conclusions: The implementation of cADD with BCMA was associated with a reduced rate of medication errors, including harmful ones, at higher overall costs. The costs per avoided error are relatively low, and therefore, this intervention could be an important strategy to improve patient safety in hospitals.