Both fighters have verbally committed to the bout at the MGM Grand Garden Arena, the source said.
Sidelined since February with a shoulder injury, Fitch (23-3-1) was cleared to resume training last month. The 33-year-old had a five-fight win streak snapped at UFC 127, where he fought to a majority draw against B.J. Penn.
"He's the No. 1 contender. The only person to beat him is Georges St. Pierre. If I beat him, what does that do for me? Everything," Hendricks said.
"Nobody really sits around and says, 'Let's go buy a Johny Hendricks fight.' Nobody really knows how I fight or what I'm capable of. Nobody has high expectations for me. I get to go out and prove I belong."
Fitch made headlines in 2011 when he declared he only wanted current or former UFC champions as opponents. Despite a UFC record of 13-1-1 dating back to 2005, Fitch only has competed for the belt once, coming up short against Georges St. Pierre in 2008.
He publicly sought a rematch with Penn while recovering from his injury but drew Hendricks instead. Penn faces former Strikeforce welterweight champion Nick Diaz in October.
Hendricks (11-1) has been nearly perfect in the Octagon since joining the promotion in 2009. The former Oklahoma State wrestler's lone UFC loss came via unanimous decision to Rick Story last December.
Brett Okamoto covers mixed martial arts for ESPN.com