The card is expected to go down in Canada on June 15, though a city has yet to be finalized.
Shields (27-6-1) has split his four UFC bouts, and is returning to welterweight after one fight as a middleweight. The former Strikeforce champion defeated Ed Herman, but the decision was changed to a no-contest after he failed the post-fight drug test.
Woodley (11-1) scored a knockout victory over Jay Hieron earlier this month in his UFC debut. He asked for a match with Shields recently, and appears to be receiving his wish.