The supermarket currently sells it own-brand clothing through its Tesco Direct site, however this is only for a limited number of lines. The new site will only sell own-brand lines such as F&F and Cherokee.
Tesco commercial, director Richard Brasher, has said the new site will be significantly different in look and feel to what it currently uses online.
Brasher said: "Our clothing ranges have been popular in the shops where we sell them - so we've been looking at how we can bring the fashion ranges to more customers."
Competitive prices and size of range has held sites such as Asos in good stead amid the downturn.
In the nine weeks preceding January 16, Asos reported a 118% increase in sales compared to the same period the year before.
Previously known as As Seen on Screen, Asos has used celebrity links to clothing as a key selling tactic with its 1.2m users.
The Tesco site is expected to be ready in time for the launch of the retailer's autumn collection.
By its own standards Tesco has struggled to deal with the downturn and is looking for ways to boost its non-food offering.
This month it reported a like-for-like sales increase of 2.5% for the seven weeks preceding January 10, its lowest increase since the early 90s.