During a visit to Medina, King Salman Abdulaziz al-Saud announced that the schemes will be across a number of sectors including health, education and utilities.
It was also announced that SR843m-worth of new projects will be developed at the Islamic University, which will include a sports hall, faculty buildings and some landscaping renovations.
The authorities also said SR341m-worth of other education schemes are being planned, with education buildings and upgrades to existing schools among the plans.
In addition to this, SR235m-worth of water storage projects will also be developed in order to meet the demand for 3 million cubic metres of water storage in the area.
The announcement also included a package of schemes worth a total of SR693m for Taibah University, as well as the development of the 500-bed SR415m Madinah General Hospital.
A combined SR1bn-worth of upgrades to existing plants was also announced to serve Saudi Electricity Company in the Medina area.
Saudi Arabias projects market has been slowing since the slump of oil prices. Nonetheless growing urban populations will mean the kingdom will have to press ahead with essential schemes despite plans to cut capital spending.