South Yorkshure Passenger Transport Executive said the first phase of replacement work is due to get underway in late June/early July.
Around 22kms of track needs replacing by 2014 having been in service for nearly 20 years.
David Young, executive Deputy Interim Director General and Director of Customer Experience, said: “When the tram system was installed in 1994, it was widely expected at the time that the rail would have a 30-year lifespan.
“However, over the past two years, it has become clear that this replacement work needs to be carried out sooner rather than later to ensure the people of Sheffield, and the wider region, have a robust and reliable tram network in the future.”
Once the replacement work is complete, it is thought that the new rails – made from harder wearing steel – will have a life-expectancy of 25-30 years.
Other tram networks in the UK also require track renewal projects to be undertaken periodically due to the nature of what is known as the embedded rail.
Embedded rail is used on most UK tram systems and tends to have a limited life expectancy.
Manchester’s Metrolink system and the Croydon tram network have previously completed rail replacement works.