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YouTube owner Google Inc. has already blocked access to the film in Egypt, Libya, India and Indonesia after deadly protests in several countries, but it has rejected a request by the White House to pull it from the site altogether.
"In implementation of the directives of King Abdullah... (the regulator) contacted Google to block all electronic YouTube links containing the film and in the case of a failure to respond to this request, the regulator will block all access to YouTube (in Saudi Arabia)," a government statement carried by SPA said.
It was still possible to view a clip of the film on YouTube early on Wednesday inside the conservative Islamic kingdom.
The statement said internet service providers in Saudi Arabia had also been asked to block access to the film.
In the United Arab Emirates, the Telecommunication and Regulatory Authority (TRA) said on Monday on its Twitter feed that access to the film has been blocked and asked residents to report if there are any links to the video that are still accessible.
Saudi Arabia, which holds influence over the world's 1.6 billion Muslims through its guardianship of Mecca and Medina, last week condemned both the film and the violent response against American embassies.
The film "Innocence of Muslims", clips of which were posted on the Internet, portrays the Prophet Mohammad as a womaniser and has provoked an outcry among Muslims and triggered violent attacks on embassies across North Africa and the Middle East.
For many Muslims, any depiction of the Prophet is blasphemous and caricatures or other characterisations have in the past provoked violent protests across the Muslim world.
Four U.S. officials including the ambassador to Libya were killed in the east Libyan city of Benghazi last Tuesday after anger over the film boiled over.
At least 17 people have been killed in the violence, which prompted Washington to send troops to bolster security at its missions.
The official Saudi position was echoed on Saturday by the kingdom's Grand Mufti, its most senior religious authority, who denounced attacks on embassies as un-Islamic but also called on foreign governments to outlaw insults against religions.