The 51-year-old actor is planning to set up a base in the upmarket Notting Hill or St John's Wood areas of the city so he has a permanent place where his seven-year-old daughter Suri - who lives with her mother, Katie Holmes, in New York - can stay with him when he is working in Europe.
A source told the US edition of OK! magazine: "Tom has been planning to set up base in Europe for about four years and he is finally ready to make it happen. He is utterly charmed by London and wants to get a place in Notting Hill or St John's Wood.
"Tom is happy because he thinks putting down roots in London will allow him to take Suri for longer stretches of time.
"He is just trying to do something nice for Suri. She has been grounded in the United States for a long time and Tom wants to make sure she gets to experience life fully and know other cultures. He doesn't want her to grow up to be a narrow minded person who's afraid to use her passport."
Tom is not the only Hollywood star looking to move to London. Brad Pitt and his fiancee, actress Angelina Jolie, could make the move along with their six children - Maddox, 11, Pax, eight, Zahara, seven, Shiloh, six, and four-year-old twins Knox and Vivienne - in 2014 to shoot the sequel to 'World War Z'.
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