The Tesco supermarket and retail chain said the tablet will be available around the holiday season and will come pre-loaded with books, movies, and music, Slash Gear reported Monday.
The move is seen as a way for Tesco to compete with Apple and Amazon, who have siphoned away much of Tesco's DVD and book sales in recent years.
The tablet, rumored to be running Android, will also feature pre-loaded digital grocery and banking apps from Tesco.
Blinkbox, Tesco's online movie and music streaming service, will also be included.
Tesco has not released pricing but experts say it is likely to go up directly against Amazon's low-end Kindle Fire tablet, which carries a retail price of $199.