The Anno Domini system was created by the monk Dionysius Exiguus, in 525. Prior to that everyone simply used one of the many common calendar systems in use around that time.

Dionysius in fact, when he came up with his system was recording the future dates of Easter, so that the faithful could celebrate on the proper day. He was using a system that counted from Diocletian. Dionysius didn't like the idea of recognizing a pagan emperor who had persecuted Christians, and so came up with the AD system to replace the Diocletian Era he was using.

So it was several hundred (roughly 500) years after the life of Jesus.

It should also be pointed out that we don't actually know when Jesus was born. If we take the gospels as correct, there is disagreement. Matthew places Jesus' birth during the reign of Herod the Great. He died in 4 BCE. Luke places Jesus' birth at the census of Quirinius, in 6 CE (AD). If either of these are correct, he couldn't have been born in 1 CE (AD).