After a long wait, Pep Guardiola and his side will have the chance to finish the job at the Etihad Stadium, ahead of the rest of the tournament being played out in Portugal.
Zinedine Zidane and his players, however, finished the season strongly in La Liga and won the title, so will be confident of mounting a comeback.
It could be the game of the round and whoever goes through will be among the favourites to win.
Here’s all you need to know about the tie.
When is it and what time is kick-off?
The match will begin at 8pm BST on Friday 7 August at the Etihad Stadium.
How can I watch it online and on TV?
The game will be broadcast live on BT Sport 1, BT Sport Extra 1 and BT Sport Ultimate.
Subscribers can also stream the match on the BT Sport website and app.
Manchester City are without star striker Sergio Aguero, who is injured, and left-back Benjamin Mendy, who is suspended. Pep Guardiola will have to choose between the likes of Riyad Mahrez and Phil Foden in attack, and Bernardo Silva and Ilkay Gundogan in midfield.
Real Madrid have captain and centre-back Sergio Ramos suspended, while Marcelo is a doubt with injury. Eden Hazard is expected to be fit.
Manchester City: Ederson; Walker, Fernandinho, Laporte, Cancelo; De Bruyne, Rodri, Gundogan; Mahrez, Jesus, Sterling.
Real Madrid: Courtois; Carvajal, Varane, Nacho, Mendy; Casemiro, Valverde, Kroos; Asensio, Benzema, Hazard.
The odds are definitely with Man City thanks to their two away goals and first-leg lead, but they made a lot of errors after the restart, which Real Madrid will hope to exploit. The Spanish side need to be near-perfect to progress, however.
Man City 1-1 Real Madrid (agg 3-2)