Chandler defeated Alvarez at Bellator 58 in November 2011 to capture the belt in what was called Fight of the Year.
"I still lose sleep over my loss to Chandler, and I want it off my record," said Alvarez. "This was a long process, but at the end of the day I'm back with Bellator and I'm happy to get back in the cage. I really believe everything happens for a reason, and at the end of the day my family and I are happy, and I'm ready to get my belt back on November 2nd."
No details of Alvarez's new contract were disclosed. This does mark the first time Bellator has initiated their rematch clause, as No. 1 contenders need to earn their spot by winning a tournament.
Alvarez, who wouldn't have seen a jury style courtroom until September 2014 if he stuck with the lawsuit, is 8-1 for the promotion and has been there since day one. He hasn't fought since October 2012 at Bellator 76, when he completed his original contract. The two sides couldn't agree on a deal and Alvarez was offered a UFC contract, but Bellator countered. At that time, the court battles began.
Bellator 106 is November 2 from the Convention and Entertainment Center in Long Beach, CA. It's headlined with Quinton "Rampage" Jackson vs. Tito Ortiz. The remainder of the card should be completed in the next few weeks.