The Bolton fighter had earlier this week come under increasing pressure to take on Sheffield’s IBF welterweight champion Kell Brook in June.
However, Khan, who was also linked with bouts against Adrien Broner and Keith Thurman, said he was already deep in negotiations to fight somebody else.
Via his wife’s YouTube channel Khan announced: “The next opponent will be Chris Algieri. I will be taking that fight at 147lbs (the welterweight limit).”
The fight has yet to be rubber-stamped, but Khan added: “I’m looking forward to getting this fight announced officially by my manager and advisor Al Haymon.
“(His management team) think it’s the right fight for me, they want to keep me going.”
Algieri’s only defeat in his 21-fight professional career came in his last bout against Filipino superstar Manny Pacquiao, who faces Floyd Mayweather in a mega-fight on May 2.
Algieri was knocked down six times en route to a heavily lopsided points loss in November last year.
Yet Khan believes his American foe is a credible opponent as he wrested the WBO light-welterweight title off the much feared Ruslan Provodnikov in June 2014.
Khan said: “You can class him as an A-class opponent.
“He has fought decent opponents, beaten decent opponents, and just fell short against Manny Pacquiao, which is an A star opponent.
“He’s a decent boxer overall. He knows how to box and knows how to move well.
“He takes a decent amount of shots and he’s got a decent amount of power, so I think overall it’s going to be a good fight for me.”