The downtown will be completed in 2030 and is expected to generate 180 billion Saudi Riyals ($48.6 billion) to non-oil GDP, Xinhua news agency reported, citing a Saudi Press Agency report.
The king meanwhile issued a decree on Tuesday ordering a cabinet reshuffle, appointing Saudi Prince Khalid bin Salman as the Defence Minister, Xinhua news agency reported.
The kingdom, the Arab world's biggest economy, launched an artificial intelligence strategy last month to attract investors as part of Crown Prince Mohammed bin Salman's ambitious "Vision 2030" plan to wean the kingdom off oil.
The timing of the deals, long considered taboo without the blessing of the Palestinians, was seen as an attempt to provide Trump with a foreign policy win ahead of the vote.