"Diego broke his hand, so Hughes will now fight Koscheck," UFC president Dana White announced Tuesday night via Twitter.
Koscheck (15-5) has not fought since December 2010, when he lost a unanimous decision to 170-pound champion Georges St. Pierre. During the bout, Koscheck suffered a broken orbital bone.
Hughes has been out of the cage since November 2010, when he was KO'd in the first round by B.J. Penn. The former UFC welterweight champion has a professional record of 45-8.
Sanchez was forced to withdraw from the high-profile bout after breaking his hand. Exactly how and when the injury occurred has not yet been made public by UFC or Sanchez's handlers at Team Jackson-Winkeljohn in Albuquerque, N.M.
It is also not yet known which hand Sanchez injured.
Before the injury, Sanchez was looking to extend his win streak to three. "The Ultimate Fighter" Season 1 middleweight winner has a pro mark of 23-4.
Franklin McNeil covers mixed martial arts and boxing for ESPN.com. Follow him on Twitter at www.twitter.com/Franklin_McNeil.