The non-food website, which sold video games, was a "small, loss-making part of the business" and had "no route to profitability".
Tesco direct has a part of the website devoted to video games.
"Tesco Direct has faced a number of significant challenges, including high costs for fulfilment and online marketing, which have prevented it from delivering a sustainable offer as a standalone non-food business," reads a note to press.
The Tesco Direct site and its distribution centre closes on 9th July. 500 workers are now at risk of redundancy.
Tesco UK boss Charles Wilson said the supermarket giant wants to focus on one website (Tesco.com) where customers could buy groceries and non-food items in one place. Video games are currently unavailable from Tesco.com. Presumably they will be added once Tesco Direct goes down.
"We want to offer our customers the ability to buy groceries and non-food products in one place and that's why we are focusing our investment into one online platform," Wilson said.
"This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future."
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