Joshua will be bidding to win back the IBF, WBA and WBO titles which Ruiz ripped from him in a stunning four-knockdown upset at Madison Square Garden in June.
The rematch will be the latest high-profile boxing event to be held in the country after Amir Khan’s victory over Australian Billy Dib in July.
The Kingdom also hosted the World Boxing Super Series super-middleweight final between British pair Callum Smith and George Groves last year.
Joshua’s bout with Ruiz Jr will take place in Diriyah, a town on the outskirts of the capital Riyadh, which incorporates the UNESCO World Heritage site of Al-Turaif.
Cardiff’s Principality Stadium was among the venues proposed for the rematch but Ruiz Jr had insisted the bout must take place either back in the United States or on neutral territory.
Joshua was left stunned by Ruiz Jr, who stepped in to fight him at five-and-a-half weeks’ notice after his initial opponent, Jarrell Miller, failed a drugs test.
After being knocked down four times he was stopped in the seventh round on his US debut, marking one of the biggest upsets in heavyweight history.
Joshua and his promoter Eddie Hearn immediately activated their rematch clause and targeted a bout in the UK but Ruiz Jr responded: “That is not going to happen.”
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