Tesco has invited six firms to bid for its South Korean business Homeplus, which has been valued at $6bn (£4bn), media reports say.
Private equity firms KKR & Co, Carlyle Group and CVC Capital Partners are among the firms Tesco has approached, according to Reuters.
The sale is seen as a way of funding Tesco's turnaround plan after last year's accounting scandal.
It is also seen as the best way to cut debt and reverse losses at home.
The sale could be Asia's biggest private equity deal, according to Reuters. It would also be the region's second-largest consumer retail deal ever.
Homeplus refused to comment to its possible sale. Neither were any of the private equity firms believed to have been approached by Tesco willing to comment.
Homeplus is Tesco's largest business outside the UK, with annual revenue of 7.05 trillion won (£4.1bn) in 2014.
It has more than 400 stores, 500 franchise stores and more than six million customers a week.
But the business operates in a mature and competitive market and has been under some pressure, recording at least two straight years of declines in same-store sales.
The sale comes 10 months after Tesco overstated its half-year profits by £263m, while at the same time issuing a profit warning that sent shares plunging to an 11 year low.
That led to an inquiry into accounting practices at the retail giant, which found discovered more accounting irregularities and led to the suspension of several senior executives.