The idea of establishing a non-profit Open University in the Arab world was initiated by HRH Prince Talal Bin Abdulaziz President of the Arab Gulf Development Programe (AGFUND).

In 1996 HRH Prince Talal officially announced the concept of establishing the Arab Open University as a non-conventional academic institution and as a foundation which contributes to steering development in scientific, social and cultural spheres.

This initiative developed to a full pledged Arab Open University in 2002 in a strategic partnership with the Open University in the United Kingdom.