Given the ill-conditioned nature of Dix inversion, the resultant Dix interval-velocity field is often unrealistic, noisy, and highly dependent on the quality of the provided root-mean-square velocities. While the classic least-squares regularization techniques, e.g., various forms of Tikhonov regularization, lead to somewhat suboptimal stability, we formulated the Dix inversion as a new constrained optimization problem. This enables one to incorporate prior knowledge as soft and/or hard bounds for the optimization, effectively treating it as a denoising problem. The solution to the problem is achieved by a bound-constrained total variation (TV) regularization. TV regularization has the advantage of being able to recover the discontinuities in the model, but it often comes with a large memory and compute requirements. Therefore, we have developed a simple and memory-efficient algorithm using iterative refinement strategy. The quality of the new algorithm is also cross-examined against different strategies, which are currently used in practice. Overall, we observe that the proposed method outperforms classic Dix inversion methods on the synthetic and real data examples.