"Commercial cinemas will be allowed to operate in the kingdom as of early 2018, for the first time in more than 35 years," the culture and information ministry said in a statement, adding that the government will begin licensing cinemas immediately.
Reviving cinemas would represent a paradigm shift in the kingdom, which is promoting entertainment as part of a sweeping reform plan dubbed "Vision 2030", despite opposition from conservatives.
"This marks a watershed moment in the development of the cultural economy in the kingdom," information minister Awwad Alawwad said in the statement.
Hardliners, who see cinemas as a threat to cultural and religious identity, were instrumental in shutting them down in the 1980s.
Saudi Arabia's highest-ranking cleric warned in January of the "depravity" of cinemas, saying they would corrupt morals.