A city or a venue aren't set yet for the event, which is expected to take place in Brazil.
MMAFighting learned with sources close to the situation that both fighters agreed to meet inside the Octagon. MMAWeekly first reported the bout.
"Looks like my first trip to Brazil will be fighting in hostile territory on a UFC main card," Stephens wrote on his Facebook page on Wednesday.
Stephens enters the cage following a unanimous decision victory over Estevan Payan at UFC 160, getting back to the win column after suffering three consecutive losses to Anthony Pettis, Donald Cerrone and Yves Edwards.