White informed ESPN of the 170-pound matchup on Monday. Additional sources confirmed both sides have agreed to the bout. UFC Fight Night is scheduled to take place at Prudential Center.
Covington (14-1) was expected to be next in line for defending champion Kamaru Usman, but Usman has been dealing with injuries and is not currently ready to accept a bout. Usman said in a statement that "he should be ready to go by November. Whoever Dana White says is next. He's the boss. If [Ben] Askren looks good, and that's who the UFC wants, he's next."
Fighting out of American Top Team, Covington has not fought since he won the interim title against Rafael dos Anjos in June 2018. The UFC has since stripped him of that title due to inactivity.
"UFC needed a main event on short notice, so I agreed to defend my title in my first defense against the last real champion this division has had," Covington told ESPN's Ariel Helwani.
ESPN.com ranks Covington the No. 4 welterweight in the world.
Lawler (28-13) is coming off a controversial submission to Askren at UFC 235 in March. Prior to that loss, Lawler sat out the second half of 2018 with a torn ACL. The former welterweight champion has dropped three of his past four; the three losses have come against Tyron Woodley, dos Anjos and Askren.
UFC Fight Night on Aug. 3 will air on ESPN. It will mark the UFC's first trip to New Jersey since April 2018.