The 2,200-megawatt plant is to be built with Chinese technical assistance on the Arabian Sea coast at Paradise Beach, 40 kilometres (25 miles) west of Karachi.
Pakistan already has three operational nuclear plants generating a total of around 740 MW of power and has begun work on a fourth, in addition to the one launched on Tuesday.
The government hopes nuclear will ultimately provide a relatively low-cost solution to the power cuts — known euphemistically as "loadshedding" — that blight life in Pakistan.
Mismanagement, corruption and an over-reliance on expensive imported fuels have left the energy sector in dire straits, with hours-long blackouts a daily reality in the summer months.
"This is one of the first steps of our goal of racing towards a loadshedding-free Pakistan," Sharif told the audience at the site of the plant.
The World Nuclear Association has estimated the cost of the new project at nearly $10 billion.
Pakistan Atomic Energy Commission engineers will work on the project with help from the China Atomic Energy Authority.
As Pakistan is not party to the nuclear non-proliferation treaty it is excluded from the international trade in nuclear materials and technology, and can rely only on its neighbour China for help.
Sharif pledged to increase nuclear power generation capacity to 40,000 MW in the long term as part of his energy plan.
A few kilometres further west of the new nuclear power project, an energy park is being built at Gaddani beach in Baluchistan province, with plans for 6,600 MW coal-fired power projects.
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