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The event, featuring the top eight singles players and doubles teams of the year, will be the highest-profile tennis tournament held in the country.
The WTA came close to staging the 2023 Finals in Saudi, before going to Cancun in Mexico.
This year’s Finals will take place from 2 to 9 November in Riyadh.
The Next Gen ATP Finals, which features the best men under 21, was held in Saudi Arabia last year.
Saudi Arabia has been accused of using events to ‘sportswash’ its reputation amid accusations of violating human rights and restricting women’s lives and freedom of speech.
In January, Martina Navratilova and Chris Evert said hosting the WTA Tour’s flagship event in the kingdom would be a “step backward” for women’s tennis.
But the WTA chief executive Steve Simon says that by choosing Riyadh, women’s tennis is “supporting significant change being made within the region”.
“The WTA has been breaking down barriers for more than 50 years,” Simon told BBC Sport.
“We want to create more opportunities for women to play tennis at the elite level, and I think by doing this, we believe that we can inspire more women and girls to get involved with the sport.
“We are a global sport. The WTA now has all of these events and people from around the world that do reflect different cultures and systems.
The WTA says it assessed “multiple bids from different regions” and evaluated potential hosts on three criteria, including support for the organisation’s ambition to achieve equal prize money for women.
Prize money will rise to $15.5m (£12.24m) in 2025 and 2026, a significant increase on the $9m (£7.11m) prize fund offered at last year’s heavily criticised Finals.
The WTA has pledged to introduce equal prize money at all bar the smallest events by 2033. By way of comparison, the prize fund at last year’s ATP Finals in Turin was $15m (£11.84m).
Saudi Arabia has hosted exhibition events before – including a match between Aryna Sabalenka and Ons Jabeur in December – but had not staged an official tennis event before last November’s Next Gen ATP Finals.
Even though the country has wider experience in hosting Formula 1, boxing and golf, crowds and atmosphere have often been hard to generate.
Attracting a crowd worthy of the WTA Finals will be a challenge, Simon admits.
“The presentation of the Next Gen event was very strong,” he said.
“Attendance was lighter during the early rounds: it got better for the weekend, which is not uncommon for tennis.
“They do have a lot of experience of putting on world-class events in the region – Formula 1 is a good example – and one of the areas that we will have to work on with them, like we had to in China and in Singapore, is audience delivery. We have shown, with what we did in Singapore and in China, that we can do that.”
Criticism of the long-anticipated move to Saudi Arabia has been led by Navratilova and Evert, who wrote an opinion piece for the Washington Post in January.
“Taking a tournament there would represent a significant step backward, to the detriment not just of women’s sport, but women,” the pair wrote.
Human Rights Watch told the BBC in December that Saudi courts had convicted people for promoting homosexuality online and added “LGBT people in Saudi Arabia have to practise extreme self-censorship to survive their daily lives”.
Daria Kasatkina, who is in a same-sex relationship, is the only top player to have voiced opposition about a move to Saudi. Jabeur previously said she would be “very excited” to play in the country.
Critics say unprecedented spending on sport has been used to improve the oil-producing kingdom’s reputation over its human rights record and its environmental impact.
But the Saudi government says the investment is boosting the economy, opening it up to tourism and inspiring people to be more active.
“We have had direct discussions with the players, and a couple of the trips we had over there we had some people join us from the LGBTQ+ community,” Simon continued.
“We have also done a lot of research for some of the other sporting events that have been held over there, and they have only had positive experiences within the region.”
Arij Almutabagani, who in 2021 became the first woman elected to run one of the country’s sports federations, said: “Everyone will be made to feel extremely welcome.
“Our country is moving forward. Much has been achieved already and many historic steps taken by women in all sectors in recent years, with sport driving much of the progress across our entire society.
“Hosting the WTA Finals is absolutely huge for the future of tennis in Saudi Arabia and growing sport in general, especially amongst our young girls. And that’s entirely our focus, to inspire future generations of players and celebrate women’s tennis.”
