The firm said on Tuesday Potts will work on projects for group CEO Philip Clarke before retiring at the end of June next year.
Masters, currently head of Tesco's business in continental Europe, has been appointed CEO Asia.
Gordon Fryett will succeed Masters as CEO Europe, retaining his group property role.
Tesco is scheduled to update on third quarter trading on Thursday.
The firm could report a drop in underlying British sales for the fourth quarter in a row, overshadowing a more solid performance in overseas markets.
(Reporting by James Davey; editing by Adveith Nair)