The new charter aims to replace the constitution passed under Islamist President Mohamed Morsi months before he was ousted by the army.
The military wants a strong “Yes” vote to endorse Mohamed Morsi’s removal.
Mohamed Morsi’s Muslim Brotherhood, now designated a terrorist group, is boycotting the vote and there are fears of violence.
Shortly before voting began, an explosion took place near a court building in Cairo’s Imbaba district, although no casualties were reported.
A huge security operation is being mounted for the two days of voting. The interior ministry says 200,000 police officers, 150 central security units and 200 combat groups are being deployed around polling stations on both days.
Army chief Gen. Abdel Fattah al-Sisi visited one polling station in north Cairo, telling guards there: “Work hard. We need the referendum to be completely secured.”
However, spotting any posters from the “No” campaign is a lot harder and people have been arrested for putting them up.
The referendum is seen by many as more than a ballot on a new constitution – it is widely viewed as a verdict on the removal of Mohamed Morsi.
Television pictures showed long lines of voters at some Cairo polling stations.
Interim PM Hazem Beblawi has called the referendum the “most critical moment” for Egypt.
After voting on Tuesday, he said: “Our country needs every vote from Egyptians.”
The new constitution was drafted by a 50-member committee that included only two representatives of Islamist parties.
The authorities maintain that the new draft delivers more rights and freedoms, and is a crucial step on the road to stability.
Under the new constitution:
Critics say the new constitution favors the army at the expense of the people, and fails to deliver on the revolution of 2011 which overthrew Hosni Mubarak.
The new constitution retains a provision allowing civilians to be tried in military courts, and it gives the military control over the appointment of the defense minister for the next eight years.
It also stipulates that the military’s budget will be beyond civilian oversight
A “yes” vote could also pave the way for fresh presidential and parliamentary elections.
It now seems certain that Gen. Abdel Fattah al-Sisi, who backed Mohamed Morsi’s removal following mass protests, will run for president.
The constitution is expected to attract a resounding “Yes” vote, but the turnout is key, analysts say.
The last charter, passed just over a year ago, was approved by 63.8%, but only 32.9% of the population voted.
Mohamed Morsi was Egypt’s first democratically elected president but was deposed by the military last July.
He is being held in jail in Alexandria, facing several criminal charges relating to his time in office – which he says are politically motivated.
Many of the Muslim Brotherhood’s senior leaders and the movement’s supporters are also behind bars.
More than 1,000 people have died in violence since Mohamed Morsi’s overthrow.
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