The decision, announced Thursday by the IOC, means every country competing in London will include women athletes for the first time in Olympic history.
The two female Saudi competitors are judo athlete Wodjan Ali Seraj Abdulrahim Shahrkhani and 800-meter runner Sarah Attar.
The athletes, who were invited by the International Olympic Committee, were entered by the Saudi Arabian Olympic Committee by the July 9 deadline.
"This is very positive news and we will be delighted to welcome these two athletes in London in a few weeks time," IOC President Jacques Rogge said in a statement.
"With Saudi Arabian female athletes now joining their fellow female competitors from Qatar and Brunei, it means that by London 2012 every national Olympic committee will have sent women to the Olympic Games," Rogge said.
About 10,500 athletes are expected to compete in London, representing more than 200 national Olympic committees.
Saudi Arabia has been under pressure from the IOC and human-rights groups to include women athletes. The IOC has been in negotiations with the Saudis for months on securing the participation of women.
"The IOC has been working very closely with the Saudi Arabian Olympic Committee and I am pleased to see that our continued dialogue has come to fruition," Rogge said. "The IOC has been striving to ensure a greater gender balance at the Olympic Games, and today's news can be seen as an encouraging evolution."
The Gulf kingdom will also include female officials in their Olympic delegation for the first time.
Rights groups hailed the decision as a step forward for Saudi women in their quest for basic rights in a country that severely restricts them in public life.
Qatar announced on Wednesday that one of its female athletes, shooter Bahiya al-Hamad, will be the country's flag-bearer at the opening ceremony in London on July 27.
Saudi Arabia had been giving mixed messages about sending women to the games.
The Saudi Embassy in London said two weeks ago that women who qualify will be allowed to compete. But a report in a Saudi-owned newspaper earlier this week said that no female athletes have qualified for the Olympics and no women will be included on the team competing in equestrian, track and field and weightlifting.
Rogge told the AP last week that he was "cautiously optimistic" the Saudis would include women but he couldn't "guarantee it 100 percent."
Associated Press writer Barbara Surk contributed to this report.
Copyright 2012 The Associated Press.