The Grocer has reported that the Carousel range will include toys such as stacking cups, train sets and electronic toys. Already available on Tesco Direct, the offering will hit Tesco store shelves this week.
Tesco has said that the Carousel range is intended to compete directly with leading brands.
The retailer also recently launched its own line of doll - Emmi - which it plans to expand next summer.
In an unusual move for the toy industry, the new toys will be packaged with no wire ties or screws. Instead the cardboard holds the products in place.
A spokesperson for the retailer said: "Shoppers want attractively packaged toys they can give as gifts that are easy for children to open."