The Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, inaugurated the project at Al Salam Palace.
New Taif comprises an airport, Souq Okaz city, a technology hub, a residential suburb (pictured), an industrial city, and an educational city.
The King was briefed on the New Taif projects by Dr Saad Mohammad Mareq, Advisor to Governor of Makkah Region.
Mareq said New Taif is located north-east of the current city of Taif, and spans 1,250km2.
Saudi's General Authority for Civil Aviation (GACA) has signed a contract to support the development and operation of the new Taif airport with a consortium comprising Asiad, Consolidated Contractors Company, and Munich Airports.
Worth $826m (SAR3.1bn), the airport, spanning 480ha, will be completed in 2020, state news agency, SPA, reported.
Meanwhile, Souq Okaz city will span 100ha, and create 4,400 jobs in the kingdom.
Project development will also be open to private sector participation.
The private sector will be offered 18 projects to develop, ranging from recreational parks and heritage shopping villages to environmental camps and shopping complexes, according to SPA.
Up to 1,250 hotel rooms, and 130 housing units, will be developed as part of the project, under the supervision of the Saudi Commission for Tourism and National Heritage.