The Arabic service will be the first publicly funded international television service launched by the British Broadcasting Corp. Its BBC World TV service is a commercial venture.
The BBC said it would end broadcasts in Bulgarian, Croatian, Czech, Greek, Hungarian, Kazakh, Polish, Slovak, Slovene and Thai by March, in the process shedding 218 jobs.
"The changes add up to the biggest transformation of BBC World Service that has been undertaken - and one of the most far-reaching - since the BBC began international broadcasting more than 70 years ago," BBC World Service Director Nigel Chapman said.
The far-reaching changes, which also include expanding internet services in Arabic, were required because of changes in technology, the world and Europe, he added.
BBC Arabic Television Service is expected to go live in 2007 and compete with Aljazeera, which is itself launching an English-language service next year.
"Many of the European services being closed had their roots in the Second World War and have served their audiences well right through the Cold War years"
Director, BBC World Service
Chapman pledged to build on the BBC World Service's legacy as "the most successful, trusted and respected voice in the Middle East" by offering "trusted and accurate news with an international agenda".
The 19 million pound (28 million euro, $33.6 million) a year TV project will create 148 new jobs.
"Many of the European services being closed had their roots in the Second World War and have served their audiences well right through the Cold War years," Chapman said.
"But Europe has changed, fundamentally, since the early '90s. Now the countries to which these languages are broadcast are members of the European Union or are likely to join soon."
Broadcasting union Bectu was quoted as saying on the BBC website that the decision appeared to be political. "The decision will create a perception abroad that the BBC World Service is working to a government agenda."
The union, along with the UK's National Union of Journalists condemned the job cuts.