The deal, brokered between the Saudi government and the British Ministry of Defense, will boost defense and aerospace giant BAE Systems – a key player in the European consortium which manufactures the Eurofighter.
According to AFP, Saudi Arabia is buying the Eurofighter Typhoon to replace its Tornado jets - also made by BAE - that were supplied to the kingdom in another huge deal two decades ago.
The British Defense Ministry said in a statement that "the required commercial principles have now been agreed which has initiated the purchase of Typhoon aircraft and the associated commitment to the industrial plan to be launched."
The ministry statement added that the financial details of the deal, which was first proposed in December, were confidential and that it couldn't say how much it was worth.
But the Financial Times reported that the deal could total as much as 10 billion pounds (18.8 billion dollars, 14.7 billion euros), adding that the value could more than double over the next 25 years if BAE Systems maintains and upgrades the jets.
The confirmation of the deal saw BAE's shares rise 3% in early Friday trading in London.
The Saudi deal is the first confirmed order for the Eurofighters from outside the European Union.
Inside Europe, the plane has been ordered by the UK, Germany, Spain, Italy and Austria.
In 2005, Britain and Saudi Arabia signed a memorandum of understanding that was aimed at establishing a closer partnership in modernizing the Saudi armed forces, and developing close service-to-service contacts, especially through joint training and exercises.