The bags, which will be available from July in six different designs, will be sold to raise funds for Marie Curie, which is Tesco's chosen charity of the year.
Tesco also wants to increase awareness of reusable bags and reduce consumer dependency on single plastic bags.
The bags will retail at £3.50, with 50p from every sale donated to Marie Curie Cancer Care.
A minimum of £250,000 will be raised, which in turn will fund 12,500 hours of nursing care at home.
The fabric of the bags is made entirely out of recycled plastic bottles, which from an ecological point of view means waste will be diverted from landfill and will avoid the extraction and processing of raw materials.
Cath Kidston's company, which is named after the designer, has links with the charity, having sent a team to scale Snowdon in November 2007, which raised over £2,000 for Marie Curie.
Emma Higham, textile designer at Cath Kidston, said: "We decided to do this in aid of Marie Curie Cancer Care and they are undoubtedly one of our company's favourite charities."
Neither Tesco nor Cath Kidston are profiting from the sale of the bags.