King Abdullah announced the launch of the first stage of the border security programme late on Friday, which stretches from Hafar al-Batin, near the Iraq-Kuwait border to the northeast town of Turaif close to Jordan.
The project, which includes five layers of fencing equipped with watch towers, night-vision cameras and 50 radars is aimed at cutting the "number of infiltrators, drug, arms and cattle smugglers to zero", SPA said.
The border programme, which was first discussed in 2006, came amid growing concern over neighboring Iraq's deteriorating security situation.
In 2009, Riyadh signed a deal with European aerospace and defence contractors EADS to secure the Iraq border, but with increasing fears over infiltration by anti-government groups and al-Qaeda, the interior ministry expanded the scope to cover all the country's borders.
Saudi Arabia has also struggled to battle domestic terrorism since al-Qaeda first launched a string of attacks around a decade ago aimed at toppling the monarchy.
The kingdom has taken huge steps to protect its 800km border with Iraq, and in July sent 30,000 soldiers to its border with Iraq after Iraqi soldiers withdrew from the area.