Making palace 'fit for purpose'
The last major overhaul of the palace was carried out shortly after the war to repair damage from German bombing and the new plan is aimed at extending the life of the building by another 50 years.
The project is planned to start in April and royal officials said they expected MPs would approve it by the end of March at the latest, following a recommendation from the government for it to go ahead.
"It is only right we ensure Buckingham Palace is fit for purpose," said David Gauke, chief secretary to the Treasury, calling the proposed work "urgent".
To give an idea of the scale of the project, royal officials said the palacehad 775 rooms, 760 windows and 30,000 square metres (322,900 square feet) of floorboards that would have to be taken up -- equivalent to three and a half football pitches.
The palace traces its origins back to the 17th century and has been vastly expanded since then.
It now receives around half a million paying visitors during public visits held in the summer.
The queen spends around a third of the year in the palace, hosting garden parties and ceremonies.
The queen is "fully aware" of the project and "completely supportive", a royal official said.
Much of the building work would be out of the public eye and temporary accommodation for 125 people would be built in the garden to house staff and builders.
Royal traditions such as Changing of the Guard and the Trooping of the Colour parade to celebrate the queen's birthday would continue as usual.
Windsor Castle, another royal residence outside London, was hit by a devastating fire in 1992 in what the queen called her "annus horribilis".