Having withdrawn from South Korea in 2015, Britain's biggest retailer began a review of its remaining Asian businesses last year in a further retreat from its global ambitions.
The sale of its Thai and Malaysian businesses for an enterprise value of $10.6 billion comes more than five years into a recovery plan launched by Chief Executive Dave Lewis after an accounting scandal and dramatic trading downturn.
Lewis declared Tesco's turnaround complete last October and will step down in October this year, when he will be succeeded by Ken Murphy, formerly of Walgreens Boots Alliance.
Bernstein analyst Bruno Monteyne on Monday said that Tesco had secured "a very strong valuation" for the Thai and Malaysian assets and investors could look forward to a special dividend representing 21% of the group's current market capitalisation.
The price for the businesses, including debt, implies an enterprise value mutiple of 12.5 time core earnings.
After completion of the disposal to the Thai group controlled by Dhanin Chearavanont, Tesco intends to return cash to shareholders via a special dividend with an associated share consolidation. It will also inject 2.5 billion pounds ($3.28 billion) into its pension fund.
Reuters reported on Sunday that CP Group was the frontrunner to buy the assets.
Tesco shares were down 1.3% at 1249 GMT, outperforming the blue-chip FTSE 100 index, which fell 6.9% on coronavirus fears.
"The coronavirus outbreak won't stop people from eating: on the contrary, food-at-home will get a boost at the cost of food-out-of-home," said Monteyne.
The deal is conditional on the approval of Tesco's shareholders and regulatory approvals in Thailand and Malaysia, which is expected during the second half of 2020.
However, CP Group will face a newly empowered Thai antitrust regulator, which could block the transaction if it finds that the deal would create a monopoly or market dominance, lawyers and analysts said.
CP Group is buying Tesco's assets through its CP Foods and CP ALL businesses.
"We believe the reason management has broken down the investment into small pieces is that it does not have to pass a shareholder vote and to minimise capital-raising risk as much as possible," Citi analysts said in a report.
CP Group runs its 12,000 7-Eleven convenience stores through CP All and about 80 cash-and-carry stores under Siam Makro. It will gain control of the 1,965 stores Tesco operates in Thailand - much of which the British retailer bought from CP Group during the 1997-8 Asian financial crisis - including 200 Tesco Lotus hypermarkets and 1,600 Tesco Lotus Express convenience stores, plus 74 outlets in Malaysia.
Chearavanont, senior chairman of CP Group, has repeatedly said he wanted to buy back the company.
Tesco completed its exit from China last month with the 275 million pound sale of its joint venture stake to state-run partner China Resources Holdings (CRH).
Completion of the deal for the Thai and Malaysian assets would increase speculation over the future of Tesco's central European division, consisting of stores in the Czech Republic, Hungary, Poland and Slovakia, which would be the group's only remaining overseas supermarket operation apart from Ireland.
Tesco was advised by Greenhill, Goldman Sachs and Barclays, while JPMorgan and UBS were joint international advisers and financiers for CP Group. Siam Commercial Bank and advisory firm Quant Group also worked with CP Group on the deal.
By James Davey and Chayut Setboonsarng