Thiago has injured his left knee, forcing him out of the fight, according to a report by Globo.com.
The two were slated to meet as part of the undercard for UFC Fight Night 27: Condit vs. Kampmann 2 (formerly UFC on Fox Sports 1 #2) on Aug. 28 in Indianapolis. A welterweight rematch between Carlos Condit and Martin Kampmann headlines the fight card.
Gastelum (6-0) defeated heavily favored Team Sonnen teammate Uriah Hall at The Ultimate Fighter 17 Finale on April 13 in his official UFC debt, becoming the youngest winner in the reality show’s history.
In the days following the win, the 21-year-old announced that he would be dropping from the middleweight division to the 170-pound weight class.
His first test at welterweight was to be Paulo Thiago.
Thiago (15-5) made waves when he arrived in the UFC by knocking out Josh Koscheck at UFC 95. He’s had a mixed bag of results since, going 4-5 in his next nine fights. He most recently scored a decision victory over Michel Prazeres on May 18.
UFC officials are currently searching for a replacement to fight Gastelum.