The hotel will have some 140 rooms, 28 suites, and 132 units of one, two and three-bedroom apartments.
The signing represents the first foray into the Middle East for Nikki Beach Hotels & Resorts, which has venues in St Tropez, New York and Marbella.
Saraya Aqaba is a $1bn man-made lagoon covering an area of 617,000 square metres, which adds 1.5 kilometres to the beach on the Gulf of Aqaba. It will feature seven luxury hotels, a souk, shops, restaurants and a water park.
Infrastructure and construction works are ongoing at the development that is expected to open by the end of 2009. Saudi Oger is the contractor for all construction works.