It will allow users to make unlimited free calls over the Net to people sitting at a computer anywhere in the world. Calls to landlines in the UK and 20 other countries including America, Canada and Australia will cost 2p a minute. Calls to UK mobiles will be charged at 10p a minute.
Tesco is the biggest consumer name to launch a version of VoIP. BT and Dixons already offer a VoIP package, but globally the best known provider is Sype.
Tesco's pack includes software on a CD and a handset. Users install the software, register their details and choose a phone number which is not restricted to the normal local area code.
They then plug their handset into their computer, which must have a broadband connection, and are ready to make calls which are routed on the internet in the same way as emails. The service can be used abroad or on the move via a laptop.
Packs cost £19.97 and include £5.00 worth of free calls.
Andy Dewhurst, chief executive of Tesco Telecoms, said: "Our research shows that while many people are aware of internet phone services, most have been put off by complicated technology and confusing tariffs and installation. Our service will make this technology accessible to millions of households."