The kingdom "congratulates the Iraqi government and people for recapturing Mosul city and liberating it from the Daesh terrorist organisation," the foreign ministry said in a statement, using the Arabic acronym for IS.
The statement carried by SPA state news agency stressed that Riyadh "stands by Iraq and its efforts to combat extremism and terrorism in all its form, as well as its financing".
Iraq declared victory in Mosul this week after a nearly nine-month battle that ravaged the city and took a heavy toll on residents and security forces.
Saudi Foreign Minister Adel al-Jubeir travelled to Baghdad in February for talks with Abadi, on the first visit of its kind since 2003.
Saudi Arabia has long expressed concern about Shiite Iran's "interference" in the region, including through Iraq's paramilitary Hashed al-Shaabi which has played a major role in fighting IS.
Saudi Arabia cut ties with Iran in early 2016 after years of strained relations.
Although Saudi Arabia officially supports the fight against the Sunni jihadists of IS, Iraq and some other countries have argued it needs to do more to help defeat the extremists and their ideology.
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