The initiative was trialled in six Scottish stores last December, using a hotline for students to arrange the exchange. Once their holiday is over, they return to the store in their university area.
The scheme, which covers Christmas, summer and Easter, is being opened to student employees in 70 stores in the south, and will be introduced nationwide by the end of the year,.
Tesco now employs a record of 25,300 students, amounting to 11% of its total workforce. It says spiralling debts and tuition fees are forcing more students than ever before to work part-time.
Miranda Clarke, head of resourcing at Tesco, said: "The Swap Shop scheme worked well in Scotland and it seems to be taking off elsewhere. The flexible working arrangements we offer staff help us to retain student workers."