Thiem, a former world number three who was beaten by Nadal in the 2018 and 2019 French Open finals, battled through two tough qualifying rounds to make the main draw.
Like Nadal, he has also struggled with injury and fell to 352 in the world in 2022 following a right wrist tear. He is currently ranked 98.
The two men have played 15 times, with Nadal winning nine and Thiem six.
However, the Austrian has won their past two encounters at the ATP Tour Finals in 2020 and the Australian Open the same year.
They will play on Tuesday.