Work on the structure at the National Memorial Arboretum, which records the names of all Service personnel who have been killed on duty or as a result of terrorism, will begin on November 12.
The monument will be closed for a year while the work is carried out as bosses said it would cause too much disruption to keep it open.
Containing the names of over 16,000 men and women, and added to every year, the monument has attracted more than two million visitors since it was dedicated in October 2007.
The improvements will also include essential maintenance to stonework, with some worn and damaged panels being replaced.
All works will be complete by Armistice Day 2016.
A new area has been created featuring information about the Armed Forces Memorial and photography of every name on its walls.
It has also created a new focal point for the laying of wreaths and other tributes.
Funding came from a Government grant using LIBOR fines paid by banks for manipulating interest rates.
Sarah Montgomery, managing director of the National Memorial Arboretum, which is part of The Royal British Legion, said: "The LIBOR fines grant and support from The Royal British Legion will enable us to improve the monument and address issues with drainage and damp, ensuring it continues to provide appropriate recognition and thanks for those who have given their lives in the service of the country.
"We recognise the disruption these works will cause and having to close the monument for any period of time is not a decision we wanted to take. There are however over 300 other memorials within the 150 acres of wooded parkland, with the majority of recent conflicts represented in some way. We hope that our visitors will take the opportunity to explore other parts of the Arboretum.
"We are also creating an area with panels featuring images of the names on the monument, and a focal point for the laying of tributes, in order that families can continue to pay their respects."
The Armistice Day service in 2015 will take place as usual at the Armed Forces Memorial. The dedication of new names on the memorial, of those killed in 2015, and a rededication of the upgraded memorial, will take place in early November 2016, once the works are fully complete.
Updates about the works will be available on the arboretum's website, Facebook, Twitter and by calling 01283 245100.
Families with specific concerns about access are encouraged to email the Armed Forces Memorial administrator, Claire Pickess.