California-born Ruiz, 29, has fought for a world title once before and is likely to be confirmed as Joshua's opponent for his US debut on Tuesday.
Anthony Joshua and Andy Ruiz
Andy Ruiz Jr set to be named as Anthony Joshua opponent for New York bout
Joshua, 29, was due to face Jarrell Miller at Madison Square Garden but the American failed drug tests, forcing him out of the Madison Square Garden bout.
California-born Ruiz, 29, has fought for a world title once before and is likely to be confirmed as Joshua's opponent for his US debut on Tuesday.
Promoter Eddie Hearn says Ruiz will "do anything" to become world champion.
"He will entertain you, give it his all. Even if it means getting sensationally knocked out, he will rather do that than not do it," Hearn told Fighthype.com.
"I couldn't afford a guy who I thought may not be good enough or game enough to entertain the fans. I had to pick a guy in my heart who I thought will do everything to become world heavyweight champion at the Garden."
Ruiz has agreed to terms, leaving only small details to be finalised, with Hearn stating the fight was "close".
Ruiz beat Germany's Alexander Dimitrenko on 20 April, weighing in at 262lbs, which is 17lbs heavier than Joshua in his last win over Alexander Povetkin in September.
At 6ft 2in, he is four inches shorter than Joshua and will be at a substantial reach disadvantage.
In his only world title shot to date, Ruiz lost on points to New Zealand's Joseph Parker, whom Joshua outpointed 15 months later to unify the WBA, IBF and WBO world titles.
On Monday, British heavyweight Dillian Whyte said Ruiz represented "a save-the-show fight", insisting the challenger would pose no problem for Joshua.
Joshua will end about nine months of inactivity when he steps into the ring and will seek to extend his 22-fight unbeaten record.