Thirteen people were shot dead and at least 15 others injured when members of the Parachute Regiment opened fire on a civil rights march on 30 January 1972.
A 14th man later died of his injuries
The families are retracing the steps of the original march 50 years from when the notorious Paras opened fire on unarmed civilians.
It is one of a number of events being held in Derry on Sunday.
It brought worldwide attention to the escalating crisis in Northern Ireland, which came to be known as the Troubles.
The Bloody Sunday Trust, a group established in 1997 to support the bereaved families, has chosen One World, One Struggle as its theme for its the 50th anniversary commemorative programme.
On Wednesday, Prime Minister Boris Johnson paid tribute to victims’ families during Prime Minister’s Questions.
Mr Johnson described Bloody Sunday as “one of the darkest days in our history” and said in the run up to the anniversary “we must learn from the past, reconcile and build a shared and prosperous future”.
Ahead of the 50th anniversary, ex-prime minister David Cameron said his 2010 apology for Bloody Sunday made it clear there was no doubt what happened was wrong.
When the Saville Inquiry was released, Mr Cameron apologised for the “unjustified and unjustifiable” deaths.
The Walk of Remembrance started in Creggan area of the city and members of the public have been asked by the Bloody Sunday Trust to show their support by lining the route in accordance with current Covid-19 restrictions.
As the families walk set off for the Bogside, children carrying white roses walked in front of them.
Crowds of people have gathered as the families headed to the Bogside.
The mood of those on the streets for the 50th anniversay is somber but dignified and respectful.
Police have warned motorists to expect delays in the city throughout Sunday as events take place to mark five decades on from the 14 murders.
They said some diversions may be necessary and advised drivers to allow extra time for journeys in and around Derry.
The crowd is making its way to the Bloody Sunday Monument in Rossville Street for the annual memorial service.
An Taoiseach Micheál Martin will lay a wreath at the memorial and is expected to privately meet the families of those killed.
Jean Hegarty, whose 17-year-old brother Kevin McElhinney was shot and killed on Bloody Sunday, said it was hard to believe 50 years had passed.
Kevin, who worked at a local supermarket, was killed as he attempted to flee the firing on Rossville Street.
“It never gets easier to talk about, even after all this time, for some of us [the Bloody Sunday families] it still sadly feels like it happened just yesterday,” Ms Hegarty told BBC News NI.
She believes the planned events will be extremely emotional.
“I think the walk of remembrance will be extremely poignant, given that we will be walking to the Guildhall – a place our family members and the other people on the march never got to reach,” she said.
Other key events throughout the day will see Irish President Michael D Higgins deliver a recorded message to the Bloody Sunday families during a special event at the Millennium Forum.
The Irish president is expected to commend the people of Derry who have “led the way, in finding agreement and accommodation between communities and traditions”.
“The 30th of January 1972 will live on in our collective memory, as will your efforts of vindication of the truth,” he is expected to say.
“The events of that day 50 years ago reverberated across this island and around the world.”
The event will be hosted by actor Adrian Dunbar, and will feature performances from Bronagh Gallagher, Phil Coulter and The Undertones.
It will take place in front of a limited number of people but will also be live streamed to an online audience.
The Millennium Forum will then fall silent at the precise moment when, on January 30, 1972, members of the Parachute Regiment opened fire in the Bogside.
Another event will see the premiere of The White Handkerchief, a dramatization of events on Bloody Sunday performed by the Derry Playhouse.
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