The Hilton Riyadh King Fahd Road will have 210 rooms, a restaurant and pool.
Event space will include seven meeting rooms, two boardrooms and a ballroom.
The new-build property will be next to the Kingdom Tower, near the Diplomatic Quarter and King Khaled International Airport.
It will join the Hilton Riyadh King Saud University, Hilton Riyadh King Saud University Residence and the Hilton Riyadh Hotel & Residence, set to open by 2013.
Hilton Worldwide currently has six hotels operating and 14 hotels in development in Saudi Arabia.