The announcement was made by Saudi Arabias King Salman bin Abdulaziz al-Saud during his state visit to Cairo in the first week of April.
I agreed with my brother his Excellency President Abdul Fatah al-Sisi to build a bridge connecting the two countries, said King Salman.
This historic step to connect the two continents, Africa and Asia, is a qualitative transformation that will increase trade between the two continents to unprecedented levels, he added.
Details of the bridge were not revealed, although it is understood to be a revival of the $4bn project announced in 2011. At the time, delegates from both countries had agreed to develop a 32-kilometre bridge to stretch over the Straits of Tiran from Ras Humaid in Tabuk, in the northern region of Saudi Arabia, to Ras Nasrani, which is close to the Egyptian resort of Sharm el-Sheikh.
Earlier in April, local companies told MEED that there have been talks of the bridge being developed in the port city of Safaga, near Hurghada, Egypts largest Red Sea holiday resort.
Linking Saudi Arabia and Egypt is not a new idea and plans to develop the causeway go as far back as 1988.
King Salmans visit to Cairo also saw the kingdom discuss $20bn-worth of energy contracts with Cairo as Saudi Arabias support to Egypt continues.
It is understood the financing deal, intended to service the Egyptian oil and gas sectors needs for the next five years, will also include a $1.5bn package to develop the Sinai region. Saudi Arabia also pledged up to $8bn in December 2015 to help Egypt meet its energy needs.
Saudi Arabia has been a strong supporter of Al-Sisis economic development plans. Since the Egypt Economic Development Conference (EEDC) last year, Gulf states have handed out billions of dollars to Egypt.
Declining oil prices have put question marks on further Gulf support, but Egyptian officials have denied speculation that financial backing from the Gulf has slowed down amid increasing tensions between Riyadh and Tehran.