The project is part of a sweeping reform and investment programme dubbed "Vision 2030", the brainchild of Crown Prince Mohammed bin Salman, who also attended the launch ceremony at the site on Saturday evening.
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Authorities have touted the 334-square kilometre (130 square mile) project in Qiddiya, southwest of the capital, as the kingdom's answer to Disneyland.
Its first phase, which includes high-end theme parks, motor sport facilities and a safari area, is expected to be completed in 2022, officials say.
They hope the park will draw in foreign investment and attract 17 million visitors by 2030.
The kingdom this month hosted its first public film screening in over 35 years, having lifted a decades-long ban on cinemas last year.
In February, Saudi Arabia's General Entertainment Authority said it would stage more than 5,000 festivals and concerts in 2018, double last year's figure, and pump $64 billion (53 billion euros) into the sector in the coming decade.
Saudis currently splurge billions of dollars annually to see films and visit amusement parks in neighbouring tourist hubs like Dubai and Bahrain.
The kingdom has also sought to court investors with three hi-tech "giga projects", funded in part by its sovereign wealth fund.
Aside from Qiddiya, the kingdom has unveiled blueprints for NEOM -- billed as a regional Silicon Valley to be built from scratch -- and a reef-fringed resort destination on the Red Sea.
Skeptics have questioned the viability of the projects, worth hundreds of billions of dollars, in an era of cheap oil.
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