“Shareholders were misled by information inaccurately provided to the market with knowledge by management,” alleges Jeremy Marshall from Bentham Europe, the firm funding the claim, reports The BBC.
Mr Marshall said the legal action would be filed by the end of October.
Tesco declined to comment on the case.
Mr Marshall, chief investment officer at Bentham Europe, said currently the claim involved 60 large investors, but that he expected this number to increase once the legal action was filed.
Claimants included pension funds from the UK, Europe and the US as well as general asset managers, he said.
The claim comes a month after the Serious Fraud Office (SFO) charged three former Tesco executives with fraud and false accounting as part of a continuing criminal investigation.
The SFO started its inquiry in October 2014, a week after Tesco announced that its profits had been overstated by £263m.
Later, that figure was revised upwards to £326m when Tesco included previous accounts.
Auditors found that the inflated profit figure was the result of Tesco booking payments from suppliers before the company had been due the money.
The affair damaged the company’s share price, which has fallen around 20 per cent since 2014.
Last November, Tesco agreed to pay $12m (£8m) to settle legal action by US shareholders which claimed that Tesco’s accounting irregularities inflated the supermarket’s share price.
News of the claim comes ahead of Tesco’s half-year results on Wednesday, which analysts have predicted will show a third consecutive quarter of sales growth.
Under the guidance of chief executive Dave Lewis, who took the helm in September 2014 immediately after the accounting issue emerged, the group has sold off many of its sidelines, including Dobbies Garden Centres, restaurant group Giraffe, and coffee chain Harris & Hoole so that it can focus on the main supermarket business.