The retailer said it would buy two tranches of shares in Homeplus from Samsung, bringing Tesco's shareholding in the Korean stores to 99 per cent.
The first purchase will be in July 2007 and the second in July 2011. The retailer has agreed to pay between£40 million and£60 million for the first tranche, although the total consideration depends on the performance of Homeplus over the next eight years.
Tesco finance and strategy director Andrew Higginson said: 'We are delighted to be extending our successful joint venture with Samsung. Together we have built up a world-class business and are very excited about the future growth opportunities in Korea.'