John O’Dowd said a legal issue with Derry City and Strabane District Council had prevented work beginning earlier, but had been resolved for now.
It is expected an agreement will be in place when council ground is affected by the work.
The scheme will take six weeks to complete.
On Monday, some residents of the Ballycolman estate told the BBC they felt “let down and forgotten about” after flooding in late July.
Six people were rescued by emergency services and the Northern Ireland Fire & Rescue Service (NIFRS) said crews received more than 100 calls and responded to 49 incidents.
Speaking on a visit to the Ballycolman estate on Tuesday, Mr O’Dowd told residents “there is a huge piece of work” to be done around flooding in the area.
“We’re taking on mother nature, and mother nature is a formidable adversary,” the minister said.
“I am pleased to confirm that appropriate legal agreements are now in place and work is getting under way on the interim scheme which will considerably reduce the risk of in-house flooding to properties at Ballycolman.”
Mr O’Dowd had met with residents affected by flooding in the Ballycolman estate back in July.
The minister announced a short-term flood alleviation scheme to help residents in the Ballycolman estate on 4 August.
But residents have said since then there has been a lack of communication with the Department for Infrastructure (DfI) over the scheduled work and that progress has been slow.
Six weeks after the flood repair work is still ongoing at Maria Duffy’s Ballycolman home.
She said confirmation that scheme is to start is positive news.
“The hope is there now. When you see the workmen there. We are in better mood today, the form is better today because we see the work ongoing now,” she told BBC Radio Foyle.
Emma Relf also lives in the area.
She said many residents are still trying to come to terms with the mental and emotional trauma of the floods.
“It is a trauma that will last for some time. But stuff is being done, we are moving forward and all we can do is be thankful and hopeful,” she said.
As well as confirming work would begin on the temporary scheme, Mr O’Dowd said he also recognised “the need to introduce viable longer term solutions as swiftly as possible to reduce the impacts of further flooding”.
He added: “That is why my department is taking forward, where possible, a number of flood alleviation proposals in various locations across the north, including Drumahoe, Eglinton and Derry city”.
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