Yes, the system will do the full copy upon first time execution of the task. Afterwards the replication will be carried out in incremental manner.
The replication feature basically works on snapshot bases, every time a replicatoin task is executed, a snapshot is taken on the source zfs and then sent to the destination zfs. The zfs replication mechanism automatically checks and compares the snapshot versions between the source and destination to make sure the snapshots are identical and via comparison between the snpashots, decides which incremental data needs to be sent.