What you've been hearing is accurate--Capcom is indeed including Final Fight's Mike Haggar in Marvel vs. Capcom 3: Fate of Two Worlds. GameSpot has the scoop on the reveal, but confirmation slipped out much earlier than the sanctioned coverage thanks to a video leak.
Over on the Capcom blog, the developer says Haggar essentially plays "like a more bad-ass version of Zangief." The first teaser trailer certainly supports that--Haggar has a wild spinning piledriver as well as a brutal extended leg kick. He can also use the Final Fight pipe to smash people over the head and, best of all, utilizes the dreaded repeated punch from from his brawler days as his Super Combo.
Another character was debuted and leaked this morning as well--X-Men's Jean Grey will join Mike Haggar and the rest of the growing cast. Capcom says she's fast and flashy, and as you'll see, she has the ability to turn into Phoenix before she croaks.
I can't say that I'm a member of the Haggar fan club, but I do realize that a lot of people are excited by this news. We'll have to see if the wait to see the musclebound mayor in a major fighting game will have been worth it.