Steadfast Defender 2024 will run to late May and involve units from all 31 NATO member countries plus candidate-member Sweden, US General Christopher Cavoli, NATO's Supreme Allied Commander Europe, told journalists.
The exercise, composed of a series of smaller individual drills, will span from North America to NATO's eastern flank, close to the Russian border.
It will involve 50 naval vessels, 80 aircraft and over 1,100 combat vehicles.
The exercise -- the biggest since the 1988 Reforger drill during the Cold War -- comes as NATO overhauls its defences in the face of Russia's war on Ukraine.
The US-led alliance has dispatched thousands of troops to its eastern flank and drawn up its most extensive plans since the collapse of the Soviet Union to protect itself from a Russian attack.
Admiral Rob Bauer, the chair of NATO's military committee, said the scale of the exercise was a demonstration of the alliance's new readiness.
"That is a record number of troops that we can bring to bear and have an exercise within that size, across the alliance, across the ocean, from the US to Europe," he said.
Bauer also warned that civilian societies in NATO's member countries needed to better prepare for a potential future war with Russia.
"We have to realise it's not a given that we are in peace and that's why we have the plans, that's why we are preparing for a conflict," he said.
"We're not seeking any conflict, but if they attack us we have to be ready."
The senior NATO commander said that Russia's land forces had been severely degraded by the war in Ukraine, but its navy and air force remained "considerable" forces.
Moscow's efforts to reconstitute its forces are being hampered by the impact of Western sanctions, he said, but the Kremlin is still managing to ramp up artillery and missile production.
On the ground in Ukraine, Bauer said that while there was still intense fighting going on, the front line was "not moving a lot one way or the other".
"While Russia's most recent attacks are devastating, they are not militarily effective," he said, calling for Ukraine's backers to not be "overly pessimistic" about Kyiv's prospects this year.
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