Prince Al Waleed bin Talal is shifting his key media businesses - including Alarab, a television news station set for launch next year - to Bahrain.
The Saudi billionaire's new Arabic-language news channel will be established in Manama next year, according to country's state news agency.
Dubai was also in the running to host the headquarters for the new channel, but Bahrain was selected this month.
The news was announced by Sheikh Fawaz bin Mohammed Al Khalifa, the president of Bahrain's information affairs authority (IAA).
"The IAA reached an agreement on December 12 to launch Alarab news channel from Manama," the Bahrain News Agency quoted Sheikh Fawaz as saying.
Prince Al Waleed's Rotana Media Group, which is part-owned by Rupert Murdoch's News Corp, will also move its senior management to Bahrain, according to the agency.
Rotana is one of the biggest broadcasters in the Arab world, and its Rotana Cinema channel is the region's second-most lucrative by advertising revenue.
News Corp recently boosted its stake in Rotana to 14.53 per cent, and has until November next year to exercise an option to increase its holding to 18.2 per cent.
Alarab is expected to be launched next December. The 24-hour station is to operate in conjunction with the US media giant Bloomberg, which will support the channel's business news output.
The Saudi journalist Jamal Khashoggi, who is managing Alarab, told The National last month that the news station was choosing between Bahrain and Dubai for its base.
Mr Khashoggi declined to comment on the decision to base the station in Bahrain when contacted by The National.
The Arabic TV news market is dominated by Al Arabiya, based in Dubai, and Al Jazeera, which is based in Doha and funded by the Qatari government.
Another Arabic TV news station, Sky News Arabia, is to be launched in Abu Dhabi in the spring.