The Group A match, the first for both teams in the second round of joint World Cup and Asian Cup qualifying, was scheduled to be played at Faisal Al-Husseini International Stadium but will now take place in Jeddah.
The Saudi team would have needed to travel through checkpoints operated by Israel, a country it holds no diplomatic ties with, to play the fixture in Palestine.
"Saudi Arabia requested the Palestinian FA to move the match to Saudi Arabia," Tayseer Nasrallah, spokesman of the Palestinian Football Association and a board member told Reuters by telephone from Ramallah.
"The Saudis said they had some exceptional conditions and they would not be able to visit Palestine at this time."
Nasrallah said they had told the Saudis they wanted the return match, scheduled to be played in October in Jeddah, to be switched to Palestine in return for accommodating the late request.
"In light of the discussion we have agreed to play the first match... in Saudi Arabia on condition that the return match will be played in Palestine on Oct. 3, the agreement was reached upon this understanding.
"We have stressed to our Arab brothers the importance that they support Palestine's right to host matches."
Palestine hosted matches against Afghanistan and Thailand at the Faisal Al-Husseini stadium in 2011 in their failed bid to qualify for the 2014 World Cup in Brazil but usually play matches away.
Last month, Palestine dropped its motion to world governing body FIFA to have Israel suspended for violating rules relating to racism and the free movement of players.
In return, FIFA agreed to send observers to monitor the freedom of players and officials to travel to and from the Israeli-occupied Palestinian territories.
Nasrallah said the Palestinian team would leave on Monday for Jordan en route to Saudi Arabia, adding they would have to pick up the bill for all expenses.
Palestine will travel to Kuala Lumpur to play Malaysia on June 16 before they host United Arab Emirates in September.
Like Saudi Arabia, Malaysia and the UAE have no diplomatic relations with Israel. East Timor are the other team in Group A
(Writing by Patrick Johnston in Singapore, editing by Ed Osmond)
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