A police statement, published by state news agency SPA on Sunday, said Faghm had a verbal exchange with Mamdouh bin Meshaal Al Ali, a man described as his friend, who then retrieved a firearm from outside and opened fire.
Al-Fagham was taken to hospital but later died as a result of his injuries.
The police arrived at the scene, but Al-Ali resisted, fired at them - he was killed when officers returned fire.
Ali himself was later killed and 5 safety personnel wounded in a shootout when the suspect "refused to surrender", SPA mentioned.
In mid-2017, King Salman issued a royal order to promote Abdulaziz Al Fagham, which was considered an exceptional promotion to the rank of brigadier general. Two of the slain bodyguard's nephews confirmed on Twitter that he was killed by a "treacherous friend". Nicknamed 'the king's crutch, ' he was often photographed closely following the monarch during foreign trips and various public events across the kingdom. Al-Fagham, a prominent bodyguard.
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He was also occasionally seen helping 83-year-old Salman to stand and walk.
His death prompted an outpouring of sympathy from Saudis on social media.
Details remained vague. While officials posted condolences for al-Fagham, the first official word of his death came in a single tweet by Saudi state television.
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