Woodley confirmed the long rumored bout and a new eight-fight UFC contract via Twitter on Tuesday. The bout will likely determine the division's next No. 1 contender.
Woodley (13-2) is coming off one of the best wins of his career, a second-round TKO against former title contender Carlos Condit at UFC 171 last month. Fighting out of St. Louis, Woodley has finished consecutive opponents in Condit and Josh Koscheck.
The former collegiate wrestler campaigned for a title shot against Johny Hendricks following his recent victory, but Hendricks is currently shelved due to a bicep injury.
MacDonald (16-2) boasts a 7-2 UFC mark, including wins over Demian Maia, Jake Ellenberger and BJ Penn. The 24-year-old welterweight last fought at UFC 170 in February, where he collected a unanimous decision over Maia.
The British Columbia native hasn't fought in Vancouver since he took a TKO loss to Condit at UFC 115 in June 2010.
ESPN.com ranks MacDonald and Woodley the Nos. 3 and 4 welterweights in the world, respectively.