A new bridge, to be built over the Red Sea, will create a link between Saudi Arabia and Egypt.
According to the Saudi King, who the bridge will be named after, the purpose of the bridge is to promote commerce between the two allied countries.
A Red Sea bridge connecting the two countries had been proposed several times in the past but failed to materialise.
King Salmon made the announcement on day two of his five day visit to the Egyptian capital, Cairo in which he was awarded an honorary doctorate by Cairo University as well as the Order of Nile medal. He is expected to announce further trade and co-operation agreements during the remainder of his visit.
Egyptian President Abdul-Fattah al-Sisi is a close ally of the King.