The FTSE 100 supermarket giant has proposed the disposal of the Asian businesses for US$10.3bn (£7.8bn) to Thai conglomerate CP Group.
Tesco will use £2.5bn of the cash to make a pension contribution, which it expects to eliminate the current funding deficit and slash future pension deficit contributions.
With chief executive Dave Lewis planning to leave the group later this year, Tesco said in December it was mulling the sale of the 2,000-store Tesco Lotus grocery chain.
It had been thought that the price would be around US$9bn (£6.8bn) has been suggested in reports, eclipsing the sale of Tesco’s South Korea business for US$6bn in 2015.
The board of directors unanimously agreed to the deal, saying it was "in the best interests of all stakeholders", but full completion is conditional on shareholder approval and regulatory approvals in Thailand and Malaysia.
Completion is expected before the end of the year, although getting through Thailand’s newly powerful antitrust watchdog will not necessarily be easy, according to reports.
Tesco shares fell 4% along with the rest of the FTSE in early trading, though after less than an hour was back in positive territory at 241.5p.
"You might have thought that the spread of the coronavirus in Asia might have undermined the planned sale of the lucrative Tesco supermarket business in Thailand, but not a bit of it," Nick Bubb, an independent retail analyst, said.
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