The bout will headline UFC 160, which takes place on May 25 at the MGM Garden Arena. Another heavyweight pairing between former champion Junior dos Santos and Alistair Overeem will serve as the co-main event.
Both matchups were announced on Tuesday's edition of UFC Tonight.
The title fight between Velasquez and Silva is a rematch of a one-sided contest that took place at UFC 146 last May. Velasquez (11-1) scored an early takedown on Silva and cruised to a TKO victory in the first round.
A former collegiate wrestler at Arizona State University, Velasquez reclaimed the UFC title with a stunning unanimous decision win over dos Santos (15-2) in December. His only professional loss came in the form of a 64-second knockout to dos Santos in 2011.
Silva (18-4) earned the No. 1 contender spot with an upset win against Overeem (36-12) earlier this month at UFC 156. A significant underdog, Silva knocked out Overeem early in the third round. It was his second win since the loss to Velasquez.
The matchup between dos Santos and Overeem originally had been scheduled to take place at UFC 146, but was canceled when Overeem failed a surprise drug test in Nevada.