Manuel Pellegrini's side will take on the conquerors of Chelsea at the Parc des Princes for the first leg on 6 April, with the second leg taking place at the Etihad Stadium on 12 April.
The first leg will mark the second competitive meeting between the sides after they drew 0-0 in the UEFA Cup group stages back in 2008/09.
City's Director of Football Txiki Begiristain said: "My first reaction was: 'wow'! But we'll do our best, we have confidence in our team."
PSG are already the French Ligue 1 champions following their 9-0 win over Troyes last weekend which left them 25 points clear at the top of the table.
Laurent Blanc's men qualified through the group stages along with Real Madrid, finishing in second place on 13 points to progress to the round of 16.
Their Last 16 opponents were Chelsea and, after two entertaining legs, the French side progressed to the quarter-finals 4-2 on aggregate.
Their top scorer so far in the competition is, unsurprisingly, Zlatan Ibrahimovic, who has netted on four occasions so far, including one in each leg against Chelsea.
PSG have never won the UEFA Champions League or European Cup but they did win the UEFA Cup Winners' Cup back in 1996.
Others fixtures are
Atletico Vs Barcelona
Real Madrid Vs Wolfsburg
Bayern Munich Vs Benfica