A structural and petrological study of the Late Proterozoic rocks in the Wadi Kid area, Sinai, Egypt indicates the presence of an extensional metamorphic core complex in the northern Arabian–Nubian Shield. Gneissic domes throughout the Arabian–Nubian Shield resemble the core complex of the Wadi Kid area and as a result, they are interpreted as extensional metamorphic core complexes. The presence of a widespread phase of extension at the end of the Pan‐African period in the Arabian–Nubian Shield requires a new interpretation of the tectonic history of this shield. Three main tectonic phases are recognized in the Late Proterozoic of the Arabian–Nubian Shield. Ophiolites and island‐arc remnants are relicts of an oceanic phase, the oldest one. This phase was followed by arc‐accretion, well established in the Arabian–Nubian Shield from the presence of individual terranes bordered by sutures, which was responsible for lithospheric thickening. The Late Proterozoic ended with widespread NW–SE extension. The metamorphic core complexes, late‐orogenic extensional basins and large strike slip zones were formed during this phase. Similarity of the tectonic evolution of the Arabian–Nubian Shield with the Mesozoic and Early Cenozoic evolution of western North America lead us to conclude that gravitational instability at the final stages of the arc‐accretion phase caused the collapse and resulted in extension at the latest stages of the Pan‐African orogeny in the Arabian–Nubian Shield.