The supermarket giant is understood to be looking for large sites in town centres to house its non-food ranges, including its clothing and jewellery offer. The stores will also sell electricals and health and beauty products alongside its groceries.
According to trade magazine Property Week, Tesco has sent out a requirement document with details about the new concept. The document is understood to describe the new multi-level town centre stores as representing a "whole new concept" for the supermarket. The first new concept store will open in an existing store in High Wycombe.
However Tesco has denied it was creating new in-town department stores and said it was "not a new format", pointing out that the 60,000 sq ft stores were similar in size to Tesco Extra outlets.
Tesco has around 150 Extra stores.