We have defined a new Hβ absorption index definition, Hβo, which has been optimized as an age indicator for old and intermediate age stellar populations. Rather than using stellar spectra, we employed for this purpose a library of stellar population spectral energy distributions of different ages and metallicities at moderately high resolution. Hβo provides us with improved abilities for lifting the age-metallicity degeneracy affecting the standard Hβ Lick index definition. The new index, which has also been optimized against photon noise and velocity dispersion, is fully characterized with wavelength shift, spectrum shape, dust extinction and [α/Fe] abundance ratio effects. Hβo requires spectra of similar qualities as those commonly used for measuring the standard Hβ Lick index definition. Aiming at illustrating the use and capabilities of Hβo as an age indicator we apply it to Milky Way globular clusters and to a well selected sample of early-type galaxies covering a wide range in mass. The results shown here are particularly useful for applying this index and understand the involved uncertainties.