It is thought the Saudi Industrial Property Authority (Modon) has been asked to bring the country up to date with the rest of the modern world with the controversial city, which is now being designed with construction to begin next year.
It is hoped it will allow women’s desire to work without defying the country’s Islamic laws.
The municipality in the Eastern city of Hafuf is expected to attract 500 million riyals (£84m) in investments and it will create around 5,000 jobs in the textiles, pharmaceuticals and food processing industries.
There will be women-run firms and production lines for women.
Although Saudi Sharia law does not prohibit women to work figures show that only 15 per cent of women are represented in the workforce.
SHARIA LAW: HOW IT WORKS IN SOME ISLAMIC STATES
In general Sharia doesn’t guarantee equal rights for women and men.
For many it does but for rights including marital and inheritance laws, it doesn’t.
Married women have the right to seek employment although it is often thought in patriarchal societies that the woman’s role as a wife and mother should have first priority.
Islam allows both single and married women to own property and the right to inherit from other family members but a woman’s inheritance is different from a man’s, for instance, a daughter’s inheritance is usually half that of her brother’s.
Islamic jurists have traditionally held that Muslim women may enter into marriage with only Muslim men, while the Quran allows a Muslim man to marry a chaste woman from the People of the Book, a term that includes Jews and Christians.
In 2003, a Malaysian court ruled that, under sharia law, a man may divorce his wife via text messaging as long as the message was clear and unequivocal.
The plan coincides with the governments ambitions to get women to play a more active part in the development of the country. Among the stated objectives are to create jobs, particularly for younger women.
‘I’m sure that women can demonstrate their efficiency in many aspects and clarify the industries that best suits their interests, their nature and their ability’, Modon’s deputy director-general, Saleh Al-Rasheed, told Saudi daily newspaper al-Eqtisadiah.
Saudi’s existing industrial cities already have factories owned by women, as well as companies that employ a small portion of the female population and Saleh Al Rasheed added: ‘We are now working on a second industrial city for women.
‘We have plans to establish a number of women-only industries in various parts of the kingdom’.
As part of a mass overhaul of its workforce and its bid to get women into work the state is also attempting to replace foreign salespeople with Saudi women.
This summer, women started replacing staff in cosmetics and perfume shops, only half a year after they replaced male sales staff in lingerie stores.
But despite some progress, women’s rights in Saudi Arabia are still defined by Islam and lack basic freedoms found in many Western cultures.
Last September, King Abdullah announced that women will be able to vote and run in the 2015 local elections but Saudi Arabia is still the only country in the world that prohibits women from driving and it took huge efforts from the International Olympic Committee to persuade them to enter women in the Games for the first time ever.
Wojdan Shaherkani’s Olympics lasted just over a minute, but the fact she made it to her judo bout with Puerto Rico’s Melissa Mojica meant it was a revolutionary moment for the women of Saudi Arabia.
Making history: Saudi Arabia’s Wojdan Shaherkani and Afghanistan’s Tahmina Kohistani were the first women to represent their countries in the Olympics
The country’s ultra-conservative clergy tried to destroy her ambitions to be Saudi’s first female Olympian, before an argument about the type of headscarf she should wear jeopardised her place at the eleventh hour.
The Games in London were also a first for Afghanistan, also bound by strict law, when Tahmina Kohistani ran in the 100m, despite months of harassment from men who believed she should not be allowed to compete.