"A new chapter. Mr Ange Postecoglou appointed as head coach of the Al Nassr first team. The contract spans two seasons," the club said in a statement.
"We wish him and his staff every success in their journey."
Postecoglou previously managed Tottenham Hotspur, whom he guided to Europa League glory in 2025, but he was sacked two weeks later after they finished 17th in the Premier League standings.
A miserable reign at Nottingham Forest in the 2025-26 season came to a swift and brutal end 39 days after his appointment when he went winless in his opening eight games in charge, which included six defeats.
The 60-year-old had been linked with the Scotland job after Steve Clarke stepped down following their World cup exit, as well as Kazakhstan but media reports said his wage demands were too high for the central Asian side.
He takes over an Al Nassr side led by Portugal forward Cristiano Ronaldo, who guided the club to the Saudi Pro League title on the final day of the season in May.
A manager known for winning trophies in his second season, Postecoglou guided Celtic to two Scottish Premiership titles, while he has also won league titles with Brisbane Roar and Yokohama F Marinos.