Khan himself drove the Saudi royal to the prime minister's residence, where he was met by an honour guard.
The two sides reaffirmed the historical relations between Pakistan and Saudi Arabia.
"I woke up this morning and when I looked at my mobile phone, I realised that after your statement last night saying that you will be Pakistan's ambassador in Saudi Arabia that if you stand in elections here, you will get more votes than me".
The Saudi Crown Prince Mohammad bin Salman wants to purchase Manchester United outright and pit it against Abu Dhabi owned Manchester City.
The £3.8bn valuation from the Saudi Prince is dependent on whether or not United can secure Champions League football next season.
Earlier, Finance Minister Asad Umar held a meeting with Saudi Arabia's Energy Minister Khalid al-Falih and his team. So we welcome Saudi Arabia to participate with us.
He was warmly received by Prime Minister Imran Khan and Chief of Army Staff General Qamar Javed Bajwa.
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Guests even had to walk through a very big blow-up of face head just to get into the party, which was a little weird. Not present for the over-the-top bash was Kim Kardashian West, who tweeted that she had a scheduling conflict.
The rare high-profile visit by the Saudi crown prince, however, comes amid Pakistan's dangerously escalating tensions with archival India over last week's deadly suicide vehicle bombing in the disputed Kashmir region. He is scheduled to visit India Tuesday and China on Thursday and Friday. "What we did today, it's the beginning and we hope in the close future we do more and more partnering with Pakistan", he concluded.
A high-powered delegation comprising key ministers and some prominent businessmen, besides members of the royal family, is also coming with the crown prince.
But that was unlikely after the Taliban spokesman Zabihullah Mujahid said the group's planned meetings with Khan and US officials in Islamabad were called off.
The prince's trip also includes an important economic component. The kingdom denies the Crown Prince knew of the plot.
The issue was only briefly alluded to in public but Prince Mohammed's next stop on his first official Asian tour is New Delhi, where officials are also eyeing billions of dollars in investments. "Pakistan has been paved on path of prosperity which is unbearable for our enemies, but we will defeat them on every front", he added.
Soldiers keep vigil at a Red Zone ahead of the arrival of Saudi Arabian Crown Prince Mohammed bin Salman (not pictured) in Islamabad.
Major roads in Islamabad were blocked off for Prince Mohammed's arrival with more than 1,000 police checkpoints set up.
Meanwhile, the Pakistan Tehreek-e-Insaf government has made a decision to confer Mohammad will Nishan-e-Pakistan - the highest civilian award.