An anchor for KTVU-TV read the names on the air Friday and then apologized after a break. The report was accompanied by a graphic with the phony names listed alongside a photo of the burned-out plane that had crashed at San Francisco International Airport on July 6, killing three and injuring dozens.
Video of the report has spread widely across the Internet since it was broadcast.
The National Transportation Safety Board has also apologized, saying a summer intern erroneously confirmed the names of the flight crew.
Asiana has decided to sue KTVU-TV to "strongly respond to its racially discriminatory report" that disparaged Asians, Asiana spokeswoman Lee Hyomin said. She said the airline will likely file suit in U.S. courts.
She said the report seriously damaged Asiana's reputation. Asiana decided not to sue the NTSB because it said it was the TV station report, not the U.S. federal agency that damaged the airline's reputation. Lee did not elaborate.
KTVU-TV did not immediately reply to emails sent by The Associated Press seeking comment.
Neither the station nor the NTSB commented on where the names originated.
The four pilots, who underwent questioning by a U.S. and South Korean joint investigation team while in the U.S., returned to South Korea on Saturday. South Korean officials plan to conduct separate interviews with them, South Korea's Ministry of Land, Infrastructure and Transport said.
KTVU apologized on its website saying, "We made several mistakes when we received this information. First, we never read the names out loud, phonetically sounding them out. Then, during our phone call to the NTSB where the person confirmed the spellings of the names, we never asked that person to give us their position with the agency. We heard this person verify the information without questioning who they were and then rushed the names on our noon newscast."
The Associated Press contributed to this report.