UFC president Dana White announced Friday that the champion dos Santos will instead face former titleholder Frank Mir.
"May 26th is now Mir vs. JDS for the (heavyweight) title in Las Vegas," White said.
Mir originally had been scheduled to face Cain Velasquez on the same card. It is unknown at this time whether Velasquez will receive a new opponent.
Overeem (36-11) earned a shot at the UFC title with a first-round TKO victory over Brock Lesnar late last year, but that opportunity became threatened when he failed a random drug test last month.
The heavyweight tested positive for an elevated level of testosterone, with a testosterone-to-epitesterone ratio of 14:1. The Nevada State Athletic Commission allows athletes up to a 6:1 ratio. The average male produces a 1:1 ratio.
Overeem is scheduled to appear in front of the NSAC on April 24 to apply for a license to fight within the state. The UFC was expected to wait for the result of the hearing, but ultimately decided to move on.
When asked on a conference call after the failed test was announced what it meant for Overeem's future in the UFC, White responded, "It doesn't look good."
Mir (16-5) will enter the title fight riding a three-fight win streak, including a first-round submission win over Antonio Rodrigo Nogueira in December. The longtime UFC veteran won the title in June 2004 with a win over Tim Sylvia.
His management team told ESPN.com that Mir plans to speak publicly on the opportunity next week.
Dos Santos (14-1) will look to record his 10th consecutive win and remain unbeaten in the UFC. He won the title via a 64-second knockout of Velasquez last November.