Cristiano Ronaldo scores against Manchester City during the last meeting in Champions league.
Manchester City will play Real Madrid in the Champions League semi-finals.
That means City could face incoming manager Pep Guardiola in the final, after his Bayern Munich side were drawn against Atletico Madrid in the other tie.
Guardiola will replace current City boss Manuel Pellegrini in the summer.
The first leg will take place in Manchester at Etihad Stadium on 26 April, with the return leg in Spain’s capital on 4 May.
"It is a difficult draw," said former Real Madrid boss Pellegrini. "It doesn’t matter which team we played. The options are the same.
"I always prefer to finish at home but that is not the most important thing."
The final takes place at Milan’s San Siro Stadium on 28 May.
Ronaldo back in Manchester.
Real Madrid’s star Ronaldo against City’s Yaya Toure.
Pellegrini was manager at Real Madrid from 2009 to 2010, during which time Cristiano Ronaldo was bought from Manchester United for £80m, while Karim Benzema and Xabi Alonso were also signed.
However, the Chilean was sacked after just one season and replaced by Jose Mourinho, following early elimination from the Champions League and also losing out on the domestic championship to Barcelona.
Former Manchester United forward Ronaldo is the leading scorer in this season’s competition with 16 goals.
Ronaldo, 31, is also the competition’s all-time record goalscorer, with 93 in 125 appearances, and scored a hat-trick as Real overturned a 2-0 first leg deficitagainst Wolfsburg in the quarter-finals.
Real have been crowned champions of Europe a record 10 times.
Repeat of 2014 final a possibility.
Friday’s draw means there is still the prospect of a repeat of the 2014 final between Real Madrid and Atletico Madrid, when Real scored three times in extra-time to beat their city rivals.
Atletico reached the last four by knocking out reigning champions Barcelona in the quarter-finals.
Bayern Munich, top of the Bundesliga table, are five-time champions of Europe with their last success coming in 2013.
The draw means that four Spanish clubs could contest both the Champions League and Europa League finals after Sevilla and Villarreal were kept apart in Europa League semi-finals.
However, a European trophy for both Manchester City AND Liverpool would mean Manchester United or West Ham missing out on the Champions League even if they finish fourth in the Premier League.
By Robert Muriisa.