By Ahmed Al Omran in Riyadh and Nikhil Lohade in Dubai

Saudi Arabia will open its $530 billion stock market to foreign investments on June 15, a keenly awaited move that will give international investors direct access to the Middle East's biggest economy.

Officials revealed plans last year to allow direct foreign investment in Saudi-listed entities in the first half of 2015, publishing draft rules in August for public consultation, which would allow the kingdom to attract hundreds of millions of dollars in foreign cash as it pushes to diversify its petrodollar-dependent economy by boosting the private sector.

On Thursday, the Saudi Capital Market Authority said the final rules regulating direct foreign investment will be published on May 4 and come into effect on June 1, after which the market will open to foreign investors

"The CMA has reviewed comments and observations received in this regard, coordinated with concerned governmental parties, and received the Saudi Stock Exchange (Tadawul)'s confirmation of its readiness," the regulator said.

The Saudi Tadawul, one of the last big markets globally to limit international access, lists some of the largest companies--representing various sectors--in the region, including petrochemical giant Saudi Basic Industries Corp., or Sabic.

Saudi Arabia is also among the most active initial public offering markets in the region. Last year, its biggest local lender, National Commercial Bank, raised $6 billion in the largest share sale ever in the Arab world.

To that extent, foreign investors seeking access to the region will be able to invest in a stock market that is more representative of the real economy than many of its regional peers. It is, however, still not clear what exact limits the regulator will have in place for foreign investments.

Saudi Arabia in 2008 began allowing foreign investors indirect access to the market through swaps, but it has hesitated to open the market fully. A sharp fall in oil prices since the middle of last year raised investor hopes of such a move, as analysts reckoned the kingdom would need the cash as it spends hundreds of billions of dollars locally to build infrastructure and create jobs.

"The guidance provided by the Saudi Capital Market Authority, effectively confirming the timeline of steps necessary for the opening of the market to foreign direct investment is very much consistent with previous communication," Bassel Khatoun, head of Middle East-North Africa equities at Franklin Templeton, said.

The move to open the Saudi market comes after two of its smaller regional peers, Qatar and the United Arab Emirates, were promoted by index compiler MSCI Inc. last May to emerging status--a step that usually draws in funds from investors who track the index.

Saudi Arabia's stock market is also likely to be promoted to emerging status eventually, analysts say. MSCI last year said the earliest Saudi Arabia could enter either the frontier or emerging market grouping would be mid-2017.

Once included in the MSCI emerging-market index, Saudi Arabia is likely to have a weight of around 4%, analysts at Global Investment House have previously estimated. This would mean investments of tens of billions of dollars could be assigned to the kingdom, and boost the Middle East-North Africa's total weight in the emerging-market basket.

The kingdom changed leadership in January as King Salman ascended the throne after the death of his half-brother King Abdullah. That change and a government reshuffle in February that saw the head of the CMA replaced, caused some concerns among investors that the country may not move forward with plans to open the market by mid-2015.

A weak outlook for oil prices and geopolitical tensions in the region further added to such worries. However, Thursday's announcement shows that the kingdom appears to be on track to allow foreigners to directly invest in its stock market.

"Rather than having to invest in so-called 'frontier,' pre-'emerging' markets only indirectly, global investors will now be able to participate directly in some of the world's largest exchanges such as Saudi," said Robert Hockett, a professor at Cornell Law School.

"This will carry with it both risks and opportunities. Risk-wise, it is still unclear just how well regulated and free of erratic government policies these exchanges will be. Opportunity-wise, risk-tolerant investors will have easier access to investment possibilities in some of the world's fastest-growing companies," Mr. Hockett added.

Write to Ahmed Al Omran at ahmed.alomran@wsj.com and Nikhil Lohade at nikhil.lohade@wsj.com

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