It's official. According to Graciefighter.com, the UFC has signed the former Strikeforce Middleweight Champion, Jake Shields (25-4-1) to a contract. They also announced that the #3 ranked middleweight will drop back down to join the UFC welterweight shark tank:

Jake Shields will be debuting at the 170lbs weight division in the UFC. After careful consideration and consulting with UFC representatives it was determined Jake would be finally going back to his original fighting weight.

Jake's opponent is one of the UFC's top contenders and will be announced shortly.

While I would've loved to see him coach on TUF and get a title shot against Georges St. Pierre, his entry to the 170 lb division could still forge a ton of interesting match-ups against the UFC's top contenders. If I had to guess though, my money would be on him debuting against the #7 ranked, Martin Kampmann.

Win - Dan Henderson - Decision (Unanimous) - Strikeforce: Nashville - April 17, 2010
Win - Jason Miller - Decision (Unanimous) - Strikeforce: Fedor vs Rogers - November 7, 2009
Win - Robbie Lawler - Submission (Guillotine Choke) - Strikeforce: Lawler vs. Shields - June 6, 2009
Win - Paul Daley - Submission (Armbar) - EliteXC: Heat - October 4, 2008

UPDATE [from Luke Thomas]: Josh Gross says the signing is close, but not official:

Jake Shields isn't officially signed with the UFC. The money is agreed to, but the contract isn't finalized. Next week most likely.