Around 900 roles will be impacted, with 70% of these employees set to be transferred to a new homeworking sales and service team.
Tui said it was not currently naming the stores that are proposed to close during the 45-day consultation period but confirmed that none of the shops that are currently open are at risk of closure.
The company added that it also aimed to relocate retail agents to vacancies across the remaining 350 high street stores, while UK jobs would be "protected" by closing third-party overseas customer service centres.
The company said the move to cut its retail network was being made due to “changes in customer behaviour” which have been accelerated by the Covid-19 pandemic.
Andrew Flintham, managing director, Tui UK and Ireland, said it was “imperative that we make these difficult cost decisions, look after our colleagues during such unprecedented uncertainty and also offer a modern customer service".
“Customer behaviours have already changed in recent years, with 70% of all Tui UK bookings taking place online," he added.
“We believe Covid-19 has only accelerated this change in purchasing habits, with people looking to buy online or wishing to speak with travel experts from the comfort of their own home.
“We have world class travel advisors at Tui, so we hope many of them will become homeworkers and continue to offer the personalised service we know our customers value.”
Tui said that the 166 stores to be closed had been selected through factors such as "local market data, consumer trends and predictions on the future of travel".
The TSSA union blamed the government’s “failure to act” for Tui’s proposed shop closures.
General secretary Manuel Cortes added: “We have been warning for weeks that high street travel shops could become a thing of the past unless the government took urgent action to help our industry navigate this crisis.
“Today’s announcement by Tui means ministers must sit up, smell the coffee and act without further delay.
“We need a bespoke package of measures to save our travel industry. I call on Tui and other employers to engage with our union so we can jointly lobby government for this to happen.”
