The match will be fought in Osaka on September 1.
Nashiro, now 30, became champion in July 2006 and held the title until his loss to Hugo Cazares in May 2010, following a draw with the Mexican seven months earlier.
"It will be my last fight as a challenger. If I lose, I'm going to retire. I'm determined to pour everything I have into it. I don't want to regret," said Nashiro, ranked 14th in the WBA.
The 23-year-old Tepparith became the interim champion in May 2011 and was promoted to full champion in November with Japanese title-holder Tomonobu Shimizu in recess because of an eye injury.
Tepparith defeated Japan's Daiki Kameda in December in his first defence of the title, and then won a unification match against Shimizu by a technical knockout in April.