The 35-year-old goalkeeper decided to leave Reading and will play for Saudi Arabian side Al Hilal. Al-Habsi played four years at Bolton before he joined Wigan in 2011.
He won the FA Cup with the English side in 2013, as they defeated Manchester City 1-0 in the final.
The experienced goalkeeper will join the Saudi Arabian side on a three-year deal, after the club were allowed to sign foreign goalkeepers.
Al Habsi, who was named Reading's player of the season in 2016/17, will make his debut for his new side when Al Halil face Al Ain in the quarter finals of the Asian Champions League in August.
Al-Hilal signs GK "Ali Al-Habsi" on a 3-year contract coming from Reading FC https://t.co/Xa7VyaoCGi #Alhilal #الهلال pic.twitter.com/48SoYmp46P
— AlHilal Saudi Club (@Alhilal_EN) 16 de julio de 2017