A four-member expert team had already started work on the dictionary, Academy sources said.
Tulu is a language without script, mostly written in Kannada, spoken by around 20 lakh native speakers in Dakshina Kannada and Udupi districts in Karnataka and Kasaragod in Kerala.
The new initiative is the second mega project in the language after the publication of the six-volume Tulu lexicon (Tulu-Kannada-English dictionary) two decades back, the sources said.
The new mega work in the language, Tulu Jnati Padakosha (Tulu etymological dictionary), would be completed within three years. The first Tulu lexicon was published by the Udupi-based Rashtrakavi Govinda Pai Research Centre in 1988.
Tulu Sahitya Academy president M Janaki Brahmavar said Nitte University would bear the cost of the project for the first year and the Academy would sponsor the project for the next two years.