The welterweights, two of the best-known mixed martial artists on the organization's roster, are set to fight on a yet-to-be determined date and card slated for this fall, according to an announcement on UFC.com.
Hughes, a multiple-time champion at 170 pounds who -- prior the rise of Georges St. Pierre -- was considered the best fighter ever to compete at that weight, told ESPN.com in January he intended to fulfill the final bout on his current contract with the UFC by the end of 2011 and was unsure if he would enter into a new contract. The 37-year-old fighter is coming off a 21-second knockout loss to B.J. Penn last November.
Hughes (45-8) has openly contemplated retirement for several years.
Sanchez, 29, has considered Hughes an idol. But he also has expressed his desire to be the one who sends the former champion into the next phase of his life away from MMA competition.
Having dabbled at lightweight and having received a quick and failed shot at the belt against Penn in 2009, Sanchez unceremoniously returned to welterweight in May 2010, losing on points to John Hathaway.
The Hughes-Sanchez announcement appears to put to rest any discussion of a rematch between Hughes and Royce Gracie for UFC's Aug. 27 card in Rio de Janiero. Gracie, who was stopped by punches in the opening period of their bout in 2006, had been lobbying for the fight.
Josh Gross covers mixed martial arts for ESPN.com.