The supermarket chain announced a 1p interim dividend, the first payout since a 1.16p interim in December 2014. The shares initially opened higher before falling back to trade 3.2% lower at 184p.
Tesco scrapped dividend payments a month later, as chief executive Dave Lewis implemented a turnaround plan for the business following the profits overstatement scandal.
The UK's biggest retailer said it would aim to double the payout for its final dividend and cover payments with two times earnings.
It marks a tentative step into restarting dividends, with the total payout for this financial year set to fall well short of the 14.76p paid in 2014.
'Today's announcement that we are resuming our dividend reflects our confidence that we can build on our strong performance to date and in doing so, create long-term sustainable value for all our stakeholders,' said chief executive Dave Lewis.
'While we anticipated this return to the dividend list, we still consider this a strong indication from the company that it is indeed on track for a full recovery,' he said.
'We have for a long time liked the prospects of Tesco's new strategy under chief executive Dave Lewis which he says this morning is "firmly on track" to deliver. These results give confidence in underlying potential for earnings, cashflow and, yes, dividends.'
Laith Khalaf, senior analyst at Hargreaves Lansdown, said while the dividend was only small, it was 'symbolic in nature'.
'There are not many things more telling about the health of a company than its ability to pay a dividend, and Tesco's return to the register after a three-year hiatus speaks volumes about the progress the company has made,' he said.
Russ Mould, investment director at AJ Bell, said the level of Tesco's planned dividends for the year would help to underpin consensus forecasts of payouts rising to 5.8p next year.
'Management's long-term ambition to offer a dividend that is covered two times by earnings per share looks perfectly sensible, even if the prospective 1.7% yield on offer for this year may not be enough to excite income seekers just yet.'
Shore Capital analyst Clive Black said the dividend was 'a sign that the group has left the medical ward and so confidence in future prospects'.
Black said he expected to upgrade his 2018 forecasts for the company following the results, but retained his 'hold' rating.
'The news flow from the proposed Booker merger and forthcoming peak period trading will determine near-term news flow and sentiment, providing a better platform too for us to perhaps come off the fence one way or another with a more affirmative stock recommendation.'
The FTSE 100 closed flat at 7,467, with British Gas owner Centrica (CNA) the biggest faller, down 5.5% at 180.5p after prime minister Theresa May announced plans to cap energy prices. Rival SSE (SSE) fell 2.6% to £13.75.
On the FTSE 250, Royal Mail (RMG) was among the fallers, down 2.6% at 374.2p after workers voted to strike over the company's move to replace its defined benefit pension scheme.
Jefferies analyst David Kerstens said the move increased pressure on the group 'to come up with a relatively more expensive pay and pension proposal, with potential large downside risk to estimates and valuation'.
Among 'small-cap' stocks, International Personal Finance (IPF) tumbled 13.6% to 182.4p after the lender announced a £30 million one-off accounting charge due to Polish tax changes.