The village was hit by floods in December and January.
Workers will build 700m of earth bunds, ditches and culverts to divert floodwater into the Afon Ogwen river.
Traffic in Tal-y-Bont will be diverted during parts of the project, funded by the Welsh Government, but a temporary road will be built for public transport.
Hefin Lloyd-Davies, of Jones Bros civil engineering, carrying out the work, said: "There is a bottle neck in the area where two water courses meet and this has caused some of the problems in the surrounding areas and roads which become flooded during heavy rainfall."
Work has begun on a scheme to prevent flooding in Tal-y-Bont, near Bangor, and a stretch of the A55.