The super-conservative country is planning to open a huge resort along its northwestern coast where women can wear whatever they like.
Project funded by international and local investors to include sports, cultural and recreational facilities near Riyadh.
The Red Sea resort will be a place where strict laws on women’s dress and gender segregation could be relaxed.
Tourists also won’t need a visa to travel to the “semi-autonomous” destination, where activities like parachuting, trekking and rock climbing will be on offer.
The government said the area which will stretch for 125 miles along the coastline – will be governed by laws on par with international standards.
It is hoped that the resort will transform the country into a tourism hotspot, much like Dubai has done, and dramatically increase the number of visitors to the Middle Eastern country.
Currently, few British holidaymakers head to Saudi Arabia, choosing the more relaxed Dubai where you are allowed to wear bikinis on the beach.
Saudi Arabia has announced plans to build a 334sq km "entertainment city" south of the capital Riyadh that will feature sports, cultural and recreational facilities, including a safari and a Six Flags theme park.
The kingdom's Public Investment Fund will be the main investor in the project, for which work will commence in 2018 and which will open in 2022, according to a statement by Mohammed bin Salman Al Saud, deputy crown prince, carried by state news agency SPA.
Other local and international investors will also provide capital, the statement said, without elaborating on the size of the investment.
This city will become, by God's will, a prominent cultural landmark and an important centre for meeting the future generation's recreational, cultural and social needs in the kingdom, Mohammed said in a statement.
Saudi Arabia's ruling Al Saud family considers itself the protector of Islam's holiest sites, Mecca and Medina.
US-based Six Flags announced in June last year that it had begun talks with the Saudi government to build theme parks as part of Saudi Arabia's Vision 2030 efforts to expand its entertainment sector and diversify the economy.
Jim Reid-Anderson, Six Flags chief executive, said later that the company aimed to build three parks in Saudi Arabia, each costing between $300m and $500m.
The Vision 2030 reform programme contains plans to shed Saudi Arabia's austere reputation, reduce its dependence on oil and create jobs for young Saudis.