Reports claimed that Sir Terry was leaving the role to take up a position as a health tsar for the government.
The reports added that Sir Terry had quit the CEO role in October and that Tesco was expected to announce his departure over the Christmas period.
However, Sir Terry said that the story was “complete nonsense”.
He told the BBC: “I have plenty to do here at Tesco, it’s a wonderful business.”
Sir Terry has been CEO of Tesco since March 1997. He joined Tesco in 1979 and played a key role in establishing its loyalty card scheme Tesco Clubcard.
He has since helped steer Tesco to becoming the UK’s top supermarket chain, recording profits of £2bn this year.