The Saudi Commission for Tourism and National Heritage (SCTH) made the announcement at an event in Ad-Diriyah, an ancient city that is now a leading tourist destination.
"The electronic tourist visa will be issued within a record time of seven minutes and the beneficiaries of the visa include tourists from 49 countries," said Tourism chief Ahmed Al-Khateeb in a statement, according to the Saudi Gazette.
"Opening Saudi Arabia to international tourists is a historic moment for our country. Visitors will be surprised... by the treasures we have to share - five Unesco World Heritage Sites, a vibrant local culture and breathtaking natural beauty," he said.
Al-Khateeb said the Kingdom will also ease its strict dress code for foreign women, allowing them to go without the abaya robe that is still mandatory public wear for Saudi women.
Foreign women, however, will be required to wear "modest clothing," he added, without elaborating.
Tourists from 38 countries in Europe, 7 in Asia, as well as the US, Canada, Australia and New Zealand, will be eligible to apply for the new visas.
These visas will cost 300 Saudi riyal ($80), with an additional cost of 140 Saudi riyal for travel insurance, reports said.
Tourists will be allowed to stay in the Kingdom for a maximum of 90 days during the year during which they can enter the Kingdom multiple times. The validity of one year will be counted from the date of issuance of the visa, the Saudi Gazette reported.
Applications for the tourist visas will commence on September 28. The visa announcement was teased via a website and on social media by way of a video campaign, hashtagged "Where in the world?" which featured several shots of Saudi landmarks and natural wonders, prompting viewers to guess where they might be.
According to SCTH, the website has garnered over 94 million views since going live. The commission announced on Thursday that it established a 15 billion Saudi riyal fund to support tourism projects across the Kingdom, reports say.
The report said that a single entry visa will now cost $533, up from $93, a multiple entry, 6-month visa would cost $800 and a one-year visa would cost $1,333.
The revised visa fees affect all tourists, religious or business visitors, but exempts those travelling for the first time to perform the annual Hajj pilgrimage or the lesser, non-mandatory pilgrimage known as the Umrah, said the report in Quartz Africa.
The pilgrimage involves considerable costs for visitors, especially for transportation and lodging.
The plan, which was based on a recommendation from the Saudi Ministries of Finance and Economy, came into effect on October 2 and coincided with the beginning of the new Islamic year, the report said.
The new rules are seen as part of a wider campaign to lessen the kingdom's dependence on oil and to increase revenues in other areas, including immigration fees, it said.
Saudia Arabia, which is the biggest oil producer in the world, has been significantly impacted by the falling oil prices.
In September, the Saudi government announced it would cut the wages and allowances of civil servants for the first time. It came against the backdrop of the prolonged war in Yemen that Saudi Arabia has been engaged in.
The move to increase the fees could be very significant for the kingdom, given that millions of Muslims undertake the pilgrimage to Mecca and Medina every year, the media report said.
The move has incensed many Muslim countries or those with a large Muslim population, it said.
Moroccan travel agencies agreed to boycott servicing the trips to Mecca until the exorbitant fees were abolished, the report said, adding Turkey, Egypt, and Nigeria have all expressed their opposition to the new plan. Muslims in South Africa started a petition calling the visa fees "inhumane", and asked the Saudi government to either scrap the payment or to drastically reduce them.
Yusuf Abramjee, the secretary general of the council of Muslim theologians in South Africa said that the community understands that "the state of the global economy is one of the reasons" pushing the Saudi government to take these measures, the media report said.
"But again, you cannot go and profit from pilgrims. It is wrong. Our religion forbids that." So far, he said, communication with the Saudi government hasn't been forthcoming. "All the calls for clarity have gone on deaf ears," Abramjee was quoted as saying.
The number of people who can perform the hajj are determined by a Saudi government quota, and has been dwindling over the last few years due to a mix of expansion plans, or to limit diseases like MERS, a respiratory infection, or Ebola.