The date of the away and home legs are yet to be confirmed, but the Blues will play the first leg away.
The two sides have only locked horns on three occasions competitively - twice in 1970 and once in 2008.
The German outfit triumphed 1-0 in the first meeting - a UEFA European Cup Winners' Cup semi-final first leg, with the Blues cruising to a 5-1 win in in the second.
The most recent meeting saw City clinch a 2-0 victory in Germany in the UEFA Cup, with Benjani and Stephen Ireland on the scoresheet.
First-leg: Wednesday 20 February 2019, 8pm GMT
Second-leg: Tuesday 12 March 2019, 8pm GMT
Blessed with a formidable pedigree both domestically and in Europe, Schalke have also established a reputation for being a conveyor belt of prodigious talent over recent years.
Leroy Sane is just one of a number of hugely talented players to have been produced by Schalke, while former City man Matija Nastasic now adorns the royal blue of Die Knappen.
Seven-times Bundesliga winners, Schalke also won the UEFA Cup in 1997 and reached the Champions League semi-finals in 2011.
Final: 1 June (Estadio Metropolitano, Madrid)