Arab countries such as Qatar and the UAE will join the coalition, as well as Middle Eastern, Asian and African states including Turkey, Pakistan, Malaysia and Nigeria.
"It is time that the Islamic world take a stand, and they have done that by creating a coalition to push back and confront the terrorists and those who promote their violent ideologies," said Adel al-Jubeir, Saudi's foreign minister, speaking in Paris.
When asked if the alliance would deploy troops on the ground, Jubeir said "nothing is off the table".
Saudi Arabia's regional rival Iran and its allies Syria and Iraq were excluded from the alliance, despite the states sharing a common enemy in the Islamic State of Iraq and the Levant (ISIL) group.
Bin Salman said the states would work together to target "any terrorist organisation, not just ISIL" in countries including Iraq, Syria. Libya, Egypt, and Afghanistan.
Military operations would work in accordance with local laws and in cooperation with the international community, he added.
In an earlier press statement issued by the Saudi Press Agency, officials said the group would be led by Saudi Arabia, which would host a "joint operations centre to coordinate" efforts.
Source: Al Jazeera