The renovation in the Church of the Holy Sepulchre aims to reinforce and conserve the structure.
Rivalry between the three denominations that run the church has delayed work.
But clerics from the Greek Orthodox, Roman Catholic and Armenian churches have put aside their differences, recognising the need to begin repairs.
The work will focus on the Edicule, the ancient chamber housing Jesus's tomb which Christians say stands above the spot where Jesus's body was anointed, wrapped in cloth and buried.
The last restoration work to take place there was in 1810 after a fire.
The Greek Orthodox, Roman Catholic and Armenian authorities are responsible for running different parts of the church but share responsibility for the shrine.
Relations between them can be tense - in 2008, an argument between Greek Orthodox and Armenian monks escalated into a brawl - but they have decided to act jointly after Israel's antiquities authority last year said the church was unsafe and Israeli police briefly closed it.
"We equally decided the required renovation was necessary to be done, so we agreed upon it," said Samuel Aghoyan, the top Armenian church official there.
The scientific co-ordinator for the repairs, Antonia Moropoulou, said the tomb was stable but warped and needed attention after many years of exposure to water, humidity and candle smoke.
The structure also needed to be protected from the risk of earthquake damage, she said.
Work is expected to take between eight and 12 months and during that time pilgrims will be able to continue visiting the site, church officials said.
Each denomination is contributing funds for the $3.3m (£2.3m) project. In addition, King Abdullah of Jordan has made a personal donation.
Jordan controlled Jerusalem's Old City, where the church is located, until the 1967 Arab-Israeli war and continues to play a role in safeguarding Muslim and Christian holy sites there.