The project, valued at around $1.5bn, will include a 1,300km-long aerial cable, with 450km extending across Egypt, and 850km across Saudi Arabia, with each country bearing the construction costs for its own territory.
The amount of electricity exchanged between the two countries will be the same in order to overcome price differences, according to Al-Masry Al-Youm.
Ministry spokesperson Aktham Abul Ela said the project will solve the problem of power cuts in the countries.
About 3,000MW of electricity will be exchanged a day.
