The deal is potentially worth €500-600 million, Reuters reports.
Travelopia comprises more than 50 brands focused on specialist luxury, adventure and education holidays.
Tui confirmed the development, while Citi declined to comment, Reuters reports.
The business will reportedly be marketed to private equity groups as well as some other specialist travel groups.
The unit has annual revenue of €1.5 billion and earnings before interest, tax and amortization of €48 million.
Travelopia contains brands such as Hayes & Jarvis, Exodus and Quark.
However, Tui will keep hold of the Crystal Ski and Thomson Lakes & Mountains brands.