The Brit returned to action on Friday night when he stopped late stand-in Billy Dib in Jeddah, after original opponent Neeraj Goyat was involved in a car accident.
Now Khan will return to Saudi Arabia to take on the boxing icon in November as the country looks to continuing building its profile in the sport.
The 32-year-old confirmed on Tuesday at a press conference in Bolton that the fight is signed for November 8 in Riyadh.
Pacquiao is in action on Saturday when he takes on Keith Thurman live on ITV Box Office.
Fans are keen to see Khan in one more so-called big fight, after his defeat against Terence Crawford at Madison Square Garden in April.
The all-British clash with Kell Brook now looks past its sell-by date, but Khan will now take on his former sparring partner in the Middle East.
After the win in Jeddah, the Bolton-born fighter made it clear that he was coming for the Filipino.
“We want the Manny Pacquiao fight, let’s hope he comes to Saudi Arabia,” he said.
“Hopefully we come back again at the end of the year and bring Manny Pacquiao here.
“I felt very comfortable in there. Obviously having a new trainer, Bones Adams.
“We had to work on a strategy, I slowed myself down a little bit instead of rushing all the time.
“I was seeing everything, making sure I was putting in the right shots, I felt very comfortable in there.”
The fight is set to go ahead regardless of the outcome of Pacquiao’s clash with Thurman in Las Vegas.
Khan sees the 40-year-old coming out on top at the MGM Grand, which could be down to his former allegiances to Freddie Roach.
“So the Pacquiao-Thurman fight, I think I favour more towards Pacquiao. Because Pacquiao has fought better opposition, he’s got the speed and the movement,” he told ITV Boxing.
“He’s a southpaw, I don’t know how Thurman’s going to do against a southpaw. Thurman’s last fight wasn’t the best. I mean he did have a very tough fight against Joselito Lopez and it didn’t look the best, he obviously had that shoulder injury and had been out the ring for a long time.
“I favour Pacquaio because he’s been more active, and at the same time he’s been in with bigger and better opposition. I lean more towards Pacquaio, but Thurman’s got the power and the strength to hurt Pacquiao so let’s see if he can do that. I just don’t think he’ll get to Pacquiao.”