The US State Department said the deal would improve America's national security and foreign policy interests.
It would also help Saudi and its allied Gulf states to counter Iranian threats.
Meanwhile, Saudi Arabia has also agreed to buy Russian air-defense systems.
US sells THAAD missile defense to Saudi Arabia
What is THAAD system?
The Lockheed Martin-produced THAAD system can intercept short and medium-range nuclear-capable ballistic missiles.
The system consists of a radar, which detects incoming missiles; a command and control center which tracks the missile; and the projectile which is launched to intercept the missile & destroy it in its terminal phase.
The system has a range of 200km and can reach an altitude of 150km.
US has deployed THAAD in South Korea, Guam, Hawaii
The THAAD system is being deployed by the US in South Korea to counter potential attacks from North Korea. The US has also deployed it in its Pacific island territory of Guam and the state of Hawaii to protect from North Korean attacks.
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Why is the US-Saudi THAAD deal significant
The $15 billion THAAD deal will help fulfill the Trump administration's aim to protect and increase jobs.
It aids the US-Saudi cooperation against Iran, who both consider the biggest regional threat.
However, Saudi Arabia has also signed a multi-billion dollar deal with Russia for its advanced S-400 air-defense system.
This indicates that Saudi is diversifying its options as US influence in the region wanes.
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