The large update has to be broken down to small batches, like 10,000, at a time. This allows normal operation for the server. It is also easy to restart in case of interruption. WAITFOR DELAY can be included to slow down the batch processing.

-- T-SQL using the TOP function (SQL Server 2005 and on ) to limit UPDATE size

USE Northwind

WHILE (1 = 1)

BEGIN

    BEGIN TRANSACTION

    UPDATE TOP (1000) [Order Details]

    SET    Discount = 0.1

    WHERE  Discount != 0.1 -- predicate for filtering;

    IF @@ROWCOUNT = 0 -- terminating condition;

      BEGIN

        COMMIT TRANSACTION

        BREAK

      END

    COMMIT TRANSACTION

-- WAITFOR DELAY '00:00:01';

END

-- T-SQL using the ROWCOUNT setting to control update size

USE Northwind

SET ROWCOUNT  1000

WHILE (1 = 1)

  BEGIN

    BEGIN TRANSACTION

    UPDATE [Order Details]

    SET    Discount = 0.11

    WHERE  Discount != 0.11

    IF @@ROWCOUNT = 0

      BEGIN

        COMMIT TRANSACTION

        BREAK

      END

    COMMIT TRANSACTION

  END

SET ROWCOUNT  0

Related link:

High Volume Update Performance