The 2004 Olympic silver-medallist had announced his plans for a UK fight via his official Twitter account on Monday, and in the early hours of Wednesday morning it was revealed that the opponent would be Mexican-born former IBF lightweight champion Diaz (40-7-1, 29 KOs).
The fight looks set to take place at Sheffield's 12,000-seat Motorpoint Arena, with Khan's brother Haroon and Team GB's Olympic bronze medallist Anthony Ogogo making their professional debuts on the undercard.
The event is part of American outfit Golden Boy Promotions' attempt to cross the Atlantic and extend their territory.
“As of now I’ve been notified that the fight is done and signed,” the 33-year-old Diaz told World Boxing News.
“We were looking for a big fight like that and I have been asked if I would come down in weight to 143lb in the past and said no, but for Amir Khan I would.
“I thought Khan looked good against Molina given the fact he had a flat come-forward guy in front of him with no power,” he continued.
“I think he is up there with the world’s best, but has yet to beat an elite fighter or pass the test against a tough and rugged opponent.”
Khan bounced back from two consecutive defeats with a 10th-round stoppage of Carlos Molina at the Los Angeles Memorial Sports Arena in December and his record sits at 27-3 (19 KOs).
His last fight on these shores saw him defeat Northern Irishman Paul McCloskey in Manchester in April 2011. The fight ended via technical decision in round six after McCloskey suffered a cut.
Khan will continue his quest to return to the world title picture just hours before Danny Garcia - who emphatically defeated the Bolton boxer in July – defends his WBC and WBA titles against Zab Judah in New York.
Also in action that evening is Khan’s compatriot Martin Murray, who looks for world championship glory of his own when he fights Sergio Martinez for Maravilla’s lineal and WBC middleweight straps in Argentina.