Van Marwijk succeeds Saudi coach Faisal al-Badin who took charge of the Arab Gulf nation’s team in February.
The 63-year-old will arrive in Jeddah on Sunday with his deal set to start from September 1 and he will have just two days to prepare his side for a World Cup qualifier at home to East Timor.
Saudi Arabia began the second round of Asian qualifying by beating current group leaders Palestine 3-2 in June.
Only the winner of the five-team group, which includes United Arab Emirates and Malaysia, is sure to advance to the third round.
Van Marwijk led Holland to the 2010 World Cup final, where they lost 1-0 to Spain. He has also managed clubs in the Eredivisie and Bundesliga.
He left the Dutch national job after his team lost all three games at Euro 2012 and he was sacked by Hamburg in 2014 after just 143 days in charge.