Felipe VI will be accompanied during his three-day visit by Foreign Minister Alfonso Dastis and Public Works Minister Inigo de la Serna.
He was invited to visit by Saudi Arabia's King Salman, who acceded to the Saudi throne in January 2015 following the death of his half-brother Abdullah.
Top-selling Spanish daily newspaper El Pais reported this week that "one of the imperatives of the visit" is the signing of a contract with Spanish ship builder Navantia to build five Avante 2200 corvette patrol vessels for the Saudi navy for over two billion euros ($2.2 billion).
This would be "the biggest contract every signed" by the state-owned firm and would likely guarantee jobs for 2,000 people for five years, the newspaper added.
Contacted by AFP, the royal palace declined to comment on the report.
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The ongoing sale of military hardware to Saudi Arabia by Western states has been vociferously criticised by rights groups, who have pointed to the use of such equipment in deadly attacks on civilians in Saudi-led Arab coalition airstrikes in Yemen.
Amnesty International on Friday called on Spain's king to block the sale of the warships to the Saudi navy, arguing they could be used in Yemen to carry out "serious violations of international humanitarian law".
"They are bombing hospitals, public schools, health centres, among other infrastructure full of people," the group's director for Spain, Esteban Beltran, said in a video posted on Twitter.
He called on Felipe to use his influence with King Salman "to stop air attacks on civilians in Yemen".
In January other groups including Greenpeace and Oxfam sent an open letter to the Spanish government opposing the possible sale of the warships to Saudi Arabia.
The Saudi-led coalition intervened in Yemen in March 2015 to support the government of President Abedrabbo Mansour Hadi after Huthi rebels overran much of the impoverished country.
Over 7,000 people have been killed -- more than half of them civilians -- in the conflict, while another three million are displaced and some 70 percent of the population needs food aid.