The airline is locked in a legal tussle with local councils in the West Midlands, which object to its operation at Coventry. But it now wants to expand its low-cost services to the North of England's catchment area.
Chris Mottershead, TUI UK's managing director, said: 'We're committed to offering a wide range of holidays and flights from local airports.'
Thomsonfly will base four aircraft at Robin Hood Airport for summer 2005.
Destinations are likely to be a mixture of European cities and summer-sun resorts, but are yet to be confirmed. The airline said tickets would be on sale before Christmas, with some flights under £20.
TUI has been slammed by analysts for its late entry into the low-cost airline sector, where brands such as Ryanair and easyJet have flourished.
Although rival MyTravel launched MyTravelLite in 2002, Thomsonfly only took to the air last month and is now set for rapid expansion.
It has targeted the North as existing low-cost brands are concentrated around Stansted, Luton and the Midlands.
As well as Thomsonfly seats, TUI will use Robin Hood Airport to offer traditional charter holidays.