Jeddah, the second largest city in the Kingdom, will host a night race around a street circuit in what will be the country's first appearance on the F1 calendar.
The circuit will be located on the banks of the Red Sea, in the Jeddah Corniche, a popular area for visitors.
“Saudi Arabia is a country that is rapidly becoming a hub for sports and entertainment with many major events taking place there in recent years and we are very pleased that Formula 1 will be racing there from next season.
“The region is hugely important to us and with 70 percent of the population of Saudi being under 30 we are excited about the potential to reach new fans and bring our existing fans around the world exciting racing from an incredible and historic location.
“We will be publishing our full provisional 2021 calendar in the coming weeks and this will be submitted to the World Motor Sport Council for approval.”
His Royal Highness Prince Abdulaziz Bin Turki AlFaisal Al Saud, the Minister of Sport added: “Saudi Arabia is accelerating forward and the speed, energy, excitement of Formula 1 perfectly reflects the transformational journey the country is on.
“As we've witnessed in recent years our people want to be at the very heart of the biggest moments in live sport and entertainment. And they don't come any bigger than Formula 1.
“No matter where in the world it's held, Formula 1 is an event that brings people together to celebrate an occasion that goes far beyond sport.
“We look forward to sharing this unique experience and sharing Jeddah with the world.
“For many Saudis this will be a dream come true.”
Saudi Arabia has twice hosted Formula E in Riyadh, a city 1000 kilometres east of Jeddah, in 2018 and 2019 respectively.
While the exact date for the Formula 1 Saudi Arabian Grand Prix has not been announced, the event was confirmed to take place in November.
Originally expected this week, F1's full calendar is now expected to be made public in the lead-up to the Turkish Grand Prix next weekend.