Saudi Arabia will host the inaugural Olympics Esports Games in 2025.
The International Olympic Committee (IOC) said on Friday that the partnership with the Saudi National Olympic Committee would be for 12 years.
The decision will be ratified at the IOC Session to be held on the eve of the Olympic Games in Paris, after which work will begin on selecting a host city for the inaugural edition.
"We are very fortunate to be able to work with the Saudi NOC on the Olympic Esports Games, because it has great - if not unique - expertise in the field of Esports with all its stakeholders," said IOC president Thomas Bach.
"The Olympic Esports Games will greatly benefit from this experience."
The IOC has been looking into Esports for several years and has formed a dedicated commission to find opportunities. In 2021, it developed the Olympic virtual series, a pilot venture in Esports.
"We are a youthful nation, with over 23 million gamers," said Prince Abdulaziz bin Turki Al Faisal, the Saudi Minister of Sport.
"Our kingdom has become a global hub for professional Esports... this is a natural next step for our young athletes, our country and the global Esports community."
Last year, Saudi Arabia launched an annual Esports World Cup with its first edition currently being held in Riyadh from 3 July to 25 August.
Saudi Arabia has invested large amounts of money into sports including soccer, Formula One, boxing and golf, with critics accusing the country of engaging in "sports-washing" over its human rights record.
The kingdom has denied accusations of human rights abuses.
The IOC has been trying for years to connect with a younger generation of potential Olympics fans, with its traditional Olympics audience base gradually ageing.
The IOC said a new dedicated structure would have to be created within the organisation that will be separate from the organisational and financial model for the Olympic Games.