The executioner's sword was raised over the murderer's head when Mohammed Yehia Fakihi, whose family was wiped out in a quadruple killing, screamed from the crowd.
"I forgive you for the sake of God!" he shouted.
The executioner froze, the blindfold was lifted and Mohammed Sheraii was spared, the Saudi Arabian newspaper Okaz reported Monday.
According to Islamic law, murderers are beheaded in public, but the sentence can be lifted if the victim's family wishes. At least 30 people have been executed by the sword in the kingdom this year.