The game will take place on Aug. 25 at Banc of California Stadium, the home of LAFC, whose coach, Bob Bradley, will coach the MLS players.
"Fans have been looking forward to this historic matchup for more than a year, and we have no doubt the 2021 MLS All-Star Game presented by Target will prove to be worth the wait," MLS commissioner Don Garber said in a statement. "A game of this magnitude in Los Angeles, played in front of incredible fans in one of the greatest soccer stadiums in global soccer, is unlike anything our sport has seen."
Since 2005, the MLS All-Star Game has featured a team of stars from the league against European teams preparing for the start of their season.
The change in format is another step toward strengthening the working relationship between the two leagues. They expect to hold the Campeones Cup, which will pit MLS Cup champions Columbus Crew against the winners between Cruz Azul and Leon, who play for Liga MX's Campeon de Campeones title.
MLS and Liga MX also plan the return of the Leagues Cup, which features the top four teams from each league that didn't qualify for the CONCACAF Champions League.
"Liga MX is proud to be part of the 2021 MLS All-Star Game," Liga MX executive president Mikel Arriola said in a statement. "This is going to be an intense match in a fantastic setting and world-class stadium in Los Angeles, a city that has a deep connection to our country, league, players and fans."
LAFC announced last week it would return to full capacity when the team resumes playing on June 19.
Garber and Arriola also spoke about the potential to integrate their competitions in the future into a single North American league, officials told Reuters on Wednesday.
FIFA president Gianni Infantino recently said he would support such a move and added that it could produce the best league in the world, a sentiment shared by Garber and Arriola.
"Working together, we can become one of the strongest regions in the world," Arriola said in an interview. "We are aligned in the concept."
Garber said a merger would help tilt the soccer landscape in North America's direction and give the region greater political sway at FIFA and CONCACAF.
"Together, the combined forces of both leagues is going to be far more valuable to our fans and everyone who cares about our sport than if we were to try to go it alone."