A senior member of the London Assembly Caroline Pidgeon, of the Liberal Democrats, branded the proposal, which is hoped will raise £875m for new trains on the Piccadilly line by 2023, “quite mad”.
But TfL said that it was standard practice in the transport industry and that a similar deal was already used on London Overground.
The plans will not mean the number of Tube trains are reduced on any of the London Underground lines.
TfL told the London Assembly Budget and Performance Committee on Wednesday that it was “a very normal sale and leaseback of rolling stock” to allow it to buy the next series of trains for the Piccadilly line.
The contract for the new rolling stock on the line will be awarded in the first half of 2018, TfL said.
Ms Pidgeon, who sits on the committee responded: “You’re going to be selling and leasing back rolling stock you’ve already got, that you wholly own, in order to give you the cash to buy new rolling stock? It sounds quite mad.”
She later said in a statement that the policy showed “the huge constraints TfL has to operate under”.
It is believed TfL’s finances are being squeezed by government cuts, Sadiq Khan’s fares frees and a fall in revenue from advertising and Penalty Charge fines.
Fewer passengers travelling on buses because of delays has also had an impact.
Simon Kilonback, interim finance officer at TfL, told the committee: “We have decided to press ahead with the procurement of the Piccadilly line rolling stock and will be looking to award that contract in the first half of 2018.
“We have therefore made a decision about taking some of our existing rolling stock and doing a sale and leaseback of that to finance the Piccadilly line rolling stock.”
He added: “It’s a very normal sale and leaseback of rolling stock to allow us to buy the next series of trains.”
A TfL spokesman said: “As is perfectly standard and common practice across the rail industry, we are looking at whether we could sell and lease back some of TfL’s rolling stock, as we have previously done on London Overground.
"This would allow us to purchase new trains on London Underground’s Piccadilly line, where there is a clear need for a modern fleet.”