The Dutchman, who took up the role in July 2011 on a three-year deal, was shown the door following last week's disappointing Gulf Cup of Nations campaign.
Saudi Arabia failed to progress beyond the group stages in Bahrain, with their only win a 2-0 result against Yemen.
The Saudi Arabian Football Federation met on Wednesday following a meeting of the board of directors, headed by chairman Ahmed Eid Al-Harbi, and decided to dismiss Rijkaard.
A statement on the SAFF's website read: "It has been agreed with the Dutchman Mr Frank Rijkaard to terminate his contract.
"We would like to thank Mr Rijkaard and wish him every success in the next step of his career."
Spaniard Sergio Lopez Caro will take charge of the team for the upcoming Asian Cup qualifiers with Iraq, China and Indonesia.