Alwaleed said philanthropy was an "intrinsic part" of his Islamic faith and that his wealth had been "bestowed by God and by being in this great nation (Saudi Arabia)." Although the money will go to international causes too, he said that Saudi Arabia and the Middle East was his priority.
"Since most of my wealth was achieved from this blessed country, I have made giving back to Saudi Arabia my number one priority, after which our philanthropic efforts will extend to countries around the world in accordance with the regulations governing charitable activities," he added.
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Alwaleed Philanthropies has previously partnered with global charitable institutions including The Bill & Melinda Gates Foundation. Bill Gates described the prince's pledge as an inspiration.
"Prince Alwaleed's generous commitment promises to significantly extend the great work that his foundation is already doing. His gift is an inspiration to all of us working in philanthropy around the world," Gates said in a statement.
Talal is a renowned businessman and investor; his Kingdom Holding Company has investments ranging from luxury hotels, including The Four Seasons Savoy Hotel in London, and media, such as News Corp and Time Warner. Alwaleed said that his pledge of $32 billion was separate to his ownership of Kingdom Holding and would not impact on shares in the company. "I'm selling no shares whatsoever," he said.
It's not the first time Alwaleed has made headlines. He is known for extravagant lifestyle and recently came under fire for reportedly offering 100 Bentleys to fighter jet pilots who had taken part in the air strikes in Yemen.
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—By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld