McGregor (19-2) has been dubbed a minus-280 favorite over Diaz, who accepted the fight on 11 days' notice. Diaz comes back at plus-220. The 170-pound bout will headline UFC 196 in Las Vegas.
Opening lines were set by Nick Kalikas of MMAOddsBreaker.com. McGregor, the UFC's featherweight champion, was originally supposed to challenge lightweight champion Rafael dos Anjos (25-7).
Before the bout was pulled, McGregor was a minus-165 favorite over dos Anjos, according to the Westgate SuperBook in Las Vegas.
"With Nate Diaz stepping in on short notice to fight Conor McGregor at UFC 196, it's potentially an even more exciting fight in terms of fan interest," Kalikas told ESPN.com. "Stylistically, Diaz's best attribute in this fight is his elite Brazilian jiu-jitsu, but that doesn't mean we'll see it, because he doesn't have a great way to get the fight to the floor.
"Diaz has held his own against top lightweight strikers like Donald Cerrone and Michael Johnson. That being said, Conor McGregor's precision striking, combined with his power, has allowed him to back up every boastful claim he's made thus far and his confidence is at an all-time high."
McGregor, 27, has never fought at welterweight. Diaz has a 2-2 record in the weight class, with all four of the fights coming in the UFC.