The new railway will allow millions of pilgrims to cross the 444 kilometres between the two cities at speeds of 320 kmh. The line will cross the Arabian desert, withstanding temperatures ranging from freezing to 50 degrees celsius as well as sand storms, flash flooding and shifting dunes, the company said in a statement.
"This is a prestigious project which will see the holy cities being linked by rail for the first time. Tata Steel is delighted to be contributing to this high-speed line, which will have to overcome some major challenges presented by building a high-capacity rail line across some of the most extreme terrain in the world," Gerard Glas, Rail Sector Head for Tata Steel said.
Steel for the project will be made at Tata Steel's Scunthorpe plant in UK before being rolled into rail in lengths of 25 metres both there and at the company's plant in Hayange, Northern France.
Work on producing the rail will start at the end of this year and is expected to continue throughout 2014.
Last year the Saudi Railways Organisation awarded the contract for the final phase of completing, running and maintaining the Haramain High-Speed Rail Project to a group of Spanish companies.
The new line is expected to carry around 160,000 people a day - and even more during the Hajj pilgrimage. They will be transported on a fleet of 35 new high-speed trains.
The project started in 2009, with an estimated cost of more than 12 billion euros. The new rail line is set to open to the public in late 2014 or early 2015.
Besides the two holy cities, the line will have three other stops, two in Jeddah for commuters and one in Saudi Arabia's under-construction King Abdullah Economic City.