The memorandum of understanding Tencent signed with Bahrain's Economic Development Board (EDB) is part of Bahrain's efforts to become a regional cloud computing hub, to diversify its economy and to create jobs.
Amazon Web Services launched in the small Gulf state of Bahrain in 2019.
The EDB said in a statement the data centre would be Tencent Cloud's first public cloud infrastructure in the Middle East and North Africa (MENA) region.
(Reporting by Lisa Barrington, editing by Louise Heavens)