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A solid Muay Thai striker, Alves was scheduled to face Siyar Bahadurzada on the July 21 card, which will be held in Calgary, Alberta.
UFC has replaced Alves with pinpoint puncher Chris Clements, who will make his second appearance in the Octagon.
Alves (19-9) has struggled to find his footing since dropping a unanimous decision to 170-titleholder Georges St. Pierre at UFC 100 in July 2008. He is 2-3 since that setback.
In his most recent outing, Alves appeared on his way toward a decision win over Martin Kampmann. But in an attempt to take the bout to the ground, Alves got caught in a guillotine choke and tapped out with less than a minute remaining in the fight.
The hard-hitting Bahadurzada (21-4-1) knocked out Paulo Thiago on April 14.
Clements (11-4) has won five fights in a row.
Alves is the second high-profile fighter to fall off the card in the past few days.
Light heavyweight Thiago Silva withdrew Friday after it was revealed that he had suffered an undisclosed injury during training camp.
Silva was hoping to rebound from a lopsided unanimous decision loss to Alexander Gustafsson on April 14. It was Silva's first fight since serving a one-year suspension for altering his postfight urine sample in January 2011.