Saudi billionaire Prince Alwaleed bin Talal unveiled plans Tuesday to build the world's tallest tower in the Red Sea port city of Jeddah, signing a 4.6 billion riyal ($1.15 billion) contract with Bin Laden Group.

The proposed tower, which will rise more than 1,000 metres and take just over five years to complete, is the centrepiece of the planned Kingdom City development being built outside Jeddah by Prince Alwaleed's Kingdom Holding.

Saudi billionaire Prince Alwaleed bin Talal reveals a model of the world's tallest tower. Credit:Reuters

"Building this tower in Jeddah sends a financial and economic message that should not be ignored," Prince Alwaleed told reporters. "It has a political depth to it to tell the world that we Saudis invest in our country despite what is happening around us from events, turmoil and revolutions even."

When completed, the tower would replace Dubai's 828-meter Burj Khalifa as the tallest tower in the world. The Burj Khalifa was built by Emaar Properties for a total cost of $US1.5 billion ($1.4 billion).