Miguel Cotto to face Antonio Margarito

Miguel Cotto and Antonio Margarito, who waged a blistering -- and ultimately controversial -- slugfest in 2008, will meet in a rematch on Dec. 3, Top Rank promoter Bob Arum told ESPN.com.

Arum said he has deals with both sides, although the paperwork is not complete. Representatives for both fighters also said that they have accepted the fight and are in the process of finalizing agreements with Arum.

"We're on board and moving forward," Sergio Diaz, Margarito's co-manager said. "We've met with Bob. We want the fight. Cotto wants the fight. We're just finishing everything."

When Arum was in Puerto Rico last week to announce the signing of junior lightweight Luis Cruz to a co-promotional deal between Top Rank and Cotto's promotional company, he met with Gaby Penagaricano, Cotto's attorney.

"In our meeting, we had the opportunity to discuss all aspects of the Cotto-Margarito II deal," Penagaricano said. "Although we no doubt made progress, there are some aspects that will require further discussion (but) Miguel is certainly happy and even looking forward to having the opportunity to avenge his first loss."

The fight, for Cotto's junior middleweight title, will take place either at New York's Madison Square Garden or the MGM Grand in Las Vegas, Arum said.

"We need to hammer out the site and we're doing an analysis now of New York and Las Vegas," Arum said. "The costs are so high in New York. The unions will kill you in New York."

Margarito is lucky he is able to fight after suffering a severe injury to his right eye during his lopsided decision loss to Manny Pacquiao in November. In that bout, Margarito suffered a broken orbital bone and also developed a large cataract in the right eye as a result of Pacquiao's repeated blows.

Arum hoped to make the rematch first in July and then in September, but the date was pushed deeper into the year so Margarito, who had surgery to remove the cataract in mid-May, could continue his recovery. The orbital bone has healed, Diaz said.

Diaz said that Margarito was originally told he could continue to box only as long as he didn't have cataract surgery, but that the blurry vision in his right eye would not improve. Diaz said at that point, Margarito strongly considered surgery and retirement.

"(His vision) was pretty bad, really blurry," Diaz said.

But Arum suggested that Margarito visit an eye specialist he had once seen. So Margarito arranged to visit Dr. Alan Crandall in Salt Lake City about two months ago.

"He told us Antonio's problem was very fixable and not a career-ending injury," Diaz said. "Antonio had pretty much accepted the fact that he would have surgery and have to retire. But they did this different kind of surgery that day, a half-hour surgery. They removed the cataract and put in a new lens. His vision is a whole lot better and will continue to get better. We have to do a minor laser surgery in a couple of weeks, but Antonio is going to be fine. He has been released to continue his career."

Like the first fight, the sequel will be on pay-per-view, although the company that will handle the event -- HBO or Showtime -- has not been determined. HBO PPV produced and distributed the first fight (which generated approximately 450,000 buys), but Arum said the network that he makes a deal with for the rights to the Nov. 12 pay-per-view fight between Pacquiao and Juan Manuel Marquez will also land Cotto-Margarito II.

The first fight was one of the most memorable battles of 2008 and one of best fights in the rich history of the Puerto Rico vs. Mexico rivalry.

"Cotto and Margarito can't help but be a terrific fight because of their styles," Arum said. "Margarito knows how to fight only one way, and that is to come straight ahead. Cotto has to be more intelligent this time and have more gas in the tank. I talked to Cotto about that and he said, 'There's one big difference for me in this fight as opposed to the first fight, the smart old guy in my corner.'"

Puerto Rico's Cotto was referring to Hall of Fame trainer Emanuel Steward, who has been with him for his past two fights.

In the first fight, Mexico's Margarito (38-7, 27 KOs) came on strong in the late rounds to stop Cotto (36-2, 29 KOs) in the 11th round of a bloody battle and take his welterweight belt on July 26, 2008 at the MGM Grand.

Margarito, who has lost two of his three fights since, was given tremendous credit for the victory as he ended Cotto's undefeated run. However, the win was eventually tainted because before his next fight, against Shane Mosley, Margarito was caught in the dressing room trying to wear loaded hand wraps containing illegal pads coated in a plaster-like substance. Mosley eventually knocked Margarito out in the in the ninth round and Margarito subsequently had his license revoked.

Because Margarito had fought Cotto in his previous fight -- and administered significant facial damage to him late in the fight -- many suspected he had gotten away with wearing illegal hand wraps.

Margarito, 33, sat out for 16 months after the license revocation before moving up to junior middleweight. He returned in his native Mexico, where he was welcomed with open arms and won a decision against low-level opponent Robert Garcia.

The hand-wrap scandal continued to swirl around Margarito, who was not licensed to fight in the United States until Texas granted him one for a November bout against Pacquiao. In their fight for a vacant junior middleweight belt, Margarito lost a lopsided decision and suffered the injuries.

Diaz said Margarito was ready for the scrutiny that will accompany a rematch with Cotto and the questions about whether he cheated in the first fight.

"When I was sitting with Bob, we were talking about going to Puerto Rico on the press tour," Diaz said. "Antonio said he was prepared for anything. He said, 'I could go anywhere and people don't like me, but this is the business. I'm a fighter and I have to face people who don't like me. I love Puerto Rico and I have to be prepared for it.' When he told me that, I felt relieved. I've been with him since he was 18 and it bothers me, it hurts me (that many people believe he cheated against Cotto). But Antonio is a strong guy. He knows he didn't do anything wrong, but he also knows he has to answer the questions."

Cotto, 30, moved up to junior middleweight in June 2010 and stopped Yuri Foreman in the ninth round to win a 154-pound title, which he defended March 12 with a 12th-round TKO of former titleholder Ricardo Mayorga.

"I think the rematch will continue from the first fight," Diaz said. "Antonio is really excited about the fight. He knows it will be a war. Antonio knows it will be another exciting fight. Cotto is a tremendous fighter, a four-time world champion. Antonio's a three-time champion. There are a lot of skeptics out there to show that Antonio's win the first time was no fluke.

"If Antonio was questioning himself he wouldn't have taken this fight. A lot of fighters say, 'I beat him once why do I need to do it again?' But Antonio is ready to get back in the ring. The payday is always good and the thought of being retired, I could see in his face when hit him. He was like, 'I'm 32 (at the time) and I have to retire already?' He wasn't taking it good, so when he was told he could continue he said it was a blessing. This fight is a blessing."

Dan Rafael is the boxing writer for ESPN.com. Follow him on Twitter @danrafaelespn.