Critics, including animal welfare groups and chefs, have said the price cut will heap pressure on the poultry industry and make it harder to improve the welfare of factory-farmed chickens.
Tesco claims that it is helping people on a tight budget by cutting the price of standard birds from £3.30 to £1.99.
The move comes less than a month after the Channel 4 documentary strand investigating chicken production, presented by celebrity chefs Jamie Oliver and Hugh Fearnley Whittingstall.
Fearnley Whittingstall said he was very surprised at Tesco's actions, because everybody was selling out of free-range chicken. He claimed it contradicted what Tesco chief executive Sir Terry Leahy had said last year.
Fearnley Whittingstall said: "To launch a £1.99 chicken is in direct contradiction to a statement Sir Terry Leahy made last summer when he said he didn't want to get into a food price war on chicken."
In his programme 'Jamie's Fowl Dinners', Oliver said that most people expected to be able to buy a chicken for just £2.50, when it should be sold for at least £4.
Animal welfare group Compassion in World Farming, said Tesco's decision was "depressing", following weeks of publicity about the welfare of broiler chickens.
Dr Lesley Lambert, director of research at Compassion in World Farming, said: "Why doesn't Tesco drop their prices on their higher welfare products and make this available to people on all budgets?"
Tesco said that it had doubled its order for higher welfare birds.
A spokesperson for the supermarket said: "We have been working hard for a while to increase the amount of higher-welfare chicken we sell and the recent debate in the media has helped raise awareness of the choices available.
"But our investment in premium chicken should not be seen as a move away from providing more affordable options. No one should feel guilty for buying a chicken just because it is good value."