Former two-weight world champion McGregor has wanted to face Nurmagomedov for some time.
The 30-year-old was ordered to perform five days' community service last week after pleading guilty to disorderly conduct following a disturbance at a UFC media day in April.
"For the fight with McGregor Khabib Nurmagomedov will receive a record sum for a Russian fighter competing in mixed martial arts", he said.
The "Notorious" has not fought in the UFC since November 2016, when he beat Eddie Alvarez for the lightweight title and became the first fighter to hold two titles simultaneously.
McGregor never defended either belt.
McGregor has not fought in UFC since 2016, but his fame grew so quickly he was regarded as a good enough opponent for Floyd Mayweather's retirement bout - a fight McGregor lost, albeit valiently, in the 10th round a year ago.
After a confrontation between associates of the pair, McGregor gatecrashed a Nurmagomedov press conference in NY in April.
Those include a September 8 pay-per-view card in Dallas headlined by the Tyron Woodley-Darren Till welterweight title fight and a December 29 card in Las Vegas likely to feature a fight between women's champions Cris Cyborg and Amanda Nunes, although negotiations continue. "I don't know why nobody told you guys that".
"Khabib will be preparing for the fight in the United States, in San Jose", he added. Diaz vented his frustration that White supported McGregor while the Irishman was going through a similar circumstance with Showtime and Mayweather, but that White didn't give him the same support in public and also claimed that Diaz was turning down fights.
As well as what Dana White has dubbed the "biggest fight in UFC history" there are several other must-see bouts coming up on BT Sport in the coming months, including Darren Till's welterweight title fight on 8 September. "It's good to have Nate back".
McGregor and Nurmagomedov will meet in the main event of the UFC 229 pay-per-view show at T-Mobile Arena, the same spot where Mayweather stopped McGregor in the 10th round of their one-sided fight.
"This is a championship fight right here ..." In the interim, Khabib Nurmagomedov has taken the lightweight division by storm.