King Salman has ordered "to issue permits equally for men and women," says the decree issued Tuesday evening by the official SPA agency.
The measure is due to enter into force in June 2018 in this ultra-conservative kingdom on the Arabian Peninsula.
As part of an ambitious economic and social reform plan in the 2030s to limit its dependence on oil, Riad seems to relax some restrictions imposed on women and cautiously seeks to promote forms of entertainment, despite the opposition of ultraconservers, in a country where half of the population is under 25 years of age.
In addition to the ban on driving, women in Saudi Arabia are subject to the custody of a man in their family - usually their father, husband or brother - to study or travel.
The ban on driving women was strongly criticized by human rights organizations.
Prior to its abolition, the Saudi sovereign "weighed the inconveniences and advantages of the ban," the decree said.
In his opinion, "most of the great ulemals (doctors of faith) are in favor of a measure that will allow women to lead," thus marking a relaxation, because the latter have firmly opposed the past.
Many Saudi-elite women who can drive to London or Dubai, but not to Riad, have tried to break this ban in Saudi Arabia, but have been systematically arrested.
The authorities did not send them to justice, but they always demanded that they sign documents guaranteeing that they will not relapse.
The militants argue that tradition and customs are at the origin of the ban that is not based on any Islamic text or a decision of the judiciary.
The decision to lift the ban on women to go to the wheel came after they were authorized to celebrate Saturday's national day on a stadium, a first for the country.
Saudi Arabia's decision to allow women to ride is a "very positive" signal and "a big step in the right direction," the Washington State Department said on Tuesday.