Former commerce minister Hashem bin Abdullah Yamani was named to head the King Abdullah City for Nuclear and Renewable Energies, to be built in Riyadh, said an announcement on the official SPA news agency.
The government said the centre would undertake research and develop projects in nuclear and alternative energies toward the goal of diversifying the kingdom's power generation away from oil and natural gas.
While the Gulf kingdom has already been experimenting with alternative energy sources like solar power, the latest move confirmed its interest in nuclear energy.
The new entity is to draft a national policy on nuclear energy development and supervise all commercial use of nuclear power and the handling of radioactive waste, the announcement said.
It pointed to high growth in demand for electricity from Saudi Arabia's mainly oil- and natural gas-fired power plants, especially for energy-intensive water desalination projects.
"The use of alternative sources of sustainable and reliable electricity and desalinated water production reduces the reliance on hydrocarbon resources, and thus provides an additional guarantee for the production of water and electricity in the future," it said.
While Saudi Arabia has the world's largest proven oil reserves and huge hydrocarbon riches, high population growth and heavy energy subsidies have driven up domestic oil and gas consumption at a rate that has sparked concern among planners.
The Saudis have moved moved cautiously toward nuclear power, falling well behind neighbour United Arab Emirates, which in December awarded a South Korean-led consortium a 20.4-billion-dollar contract to build four nuclear power plants.
But the desert kingdom is already pumping money into solar energy research and development.
In January the government announced a project for a solar power-fueled desalination plant in the Gulf coast city of Al-Khafji that could produce 30,000 cubic metres of fresh water daily from seawater.
The second phase of the project would expand the capacity ten-fold.