Sheik Fawaz bin Mohammed Al Khalifa, the head of Bahrain's Information Affairs Authority, announced late on Tuesday that the news network, dubbed Alarab TV, would be based in the Bahraini capital of Manama.
The expected launch time is December 2012.
Bahrain has since mid-February been the scene of countless peaceful anti-government rallies, which have been stiffly and invariably confronted by the government.
Saudi troops, together with forces from the United Arab Emirates, invaded the Persian Gulf island on March 14 to assist the Bahraini government in its suppressing the demonstrations.
Alwaleed announced in September that the network would focus “on the important shifts taking place across the Arab world.”
Scores of people have been killed in the government-sanctioned crackdown on the Bahraini protesters, with the involvement of the foreign forces reportedly contributing to increase in the violence against the protesters.
The Saudi prince had, however, asserted that the network would put 'an emphasis on freedom of speech and freedom of press.'