Velasquez, a Mexican-American champion, was set to headline UFC 180 pay-per-view at Mexico City Arena, the promotion's first-ever live event in Mexico.
Officials announced on Tuesday that Mark Hunt has agreed to replace Velasquez and will now meet Werdum (18-5-1) in the five-round main event. The bout will be for a UFC interim heavyweight title.
"I'm so unbelievably disappointed," stated Velasquez, according to a UFC release. "To say I was looking forward to fighting in Mexico for the time is an understatement. I wanted to fight on that card so bad.
"Looks like it wasn't meant to be and it's not going to happen. I'm going to get my knee fixed and get back to training as soon as I can."
Hunt (10-8-1) is coming off a second-round knockout win over Roy Nelson at UFC Fight Night on Sept. 20 in Japan. The 40-year-old former professional kickboxer is 1-1-1 in his last three fights, but had picked up four consecutive wins prior to that and is the No. 6 ranked heavyweight in the world according to ESPN.com.
Hunt said he weighed 302 pounds when he got the call this morning to replace Velasquez. He will have to cut to 265-pound weight limit.
"I stay away from the gym when I'm not training. I have little ones," Hunt said. "When I'm not training, I'm with my family. I'm not in training mode at all right now. There's not enough time to have a camp, but there's no way I'm going to turn down an opportunity like this. I wasn't even meant to be here anyways. I'm not supposed to be here, you know what I mean? But in my mind I'm supposed to be here and here I am. This is what I'm supposed to do and I believe the hard work has paid off.
"Of course, I want to go in the first round and try to knock his face off. Hopefully, I can knock him out before the second round. We'll see what happens."
Werdum has not fought since a dominant unanimous decision over Travis Browne at a UFC on Fox event in April. The Brazilian heavyweight has been perfect since re-joining the UFC in 2012, compiling a 4-0 record including two finishes. He was cut by the promotion in 2008, following a first-round knockout loss to Junior dos Santos.
Due to injury, Velasquez (13-1) has not fought since defending the title against Dos Santos at UFC 166 last October. It will mark the first time the UFC has offered an interim heavyweight title since 2010, when then-interim champion Shane Carwin lost to official title-holder Brock Lesnar at UFC 116.