Overseas institutions with at least $3.75 billion riyals ($1 billion) under management will now be able to invest on the Tadawul All-Shares Index (TASI), the largest Arab bourse, a notice on the exchange website said.
Under initial rules that applied last June when the TASI first opened to Qualified Foreign Investors (QFIs), at least 18.75 billion riyals in assets were required.
Government funds and university endowments will now also be able to invest, adding to foreign banks, brokerage houses, fund managers and insurance companies that were permitted at the initial opening.
The effective date of the changes will be published in the first half of next year, the bourse statement said.
The kingdom had long talked of diversifying its economy, which remained relatively closed to outsiders.
But the collapse in global crude prices by more than half since mid-2014 jolted the world's biggest oil exporter into accelerating those efforts.
At the root of the Vision 2030 diversification plan, unveiled last week by Deputy Crown Prince Mohammed bin Salman, is the sale of less than five percent of state oil giant Saudi Aramco in what officials say will be the world's largest-ever Initial Public Offering.
Proceeds from the sale will help create the biggest government investment fund in the world, with a value of $2 trillion, whose profits can provide an alternative to oil revenues.
The TASI has a current market capitalisation of close to $400 billion.