The game will be played at the Etihad Stadium, week commencing 28 October - date and ticket details will be confirmed in the coming days.
It will be the sixth time the two teams have met in the League Cup - and City are yet win against the Saints in this competition.
The first meeting was in 1978, with Southampton winning 2-1 at The Dell.
Then, in 1982, City drew 1-1 at Maine Road but the Blues or Southampton were then drawn against Manchester United in Round 4 - for whoever won the replay.
Saints thrashed City 4-0 at The Dell and went on to face the Reds who eventually who eventually won the cup,
In 1999, City were held 0-0 by Southampton at Maine Road - the replay at The Dell saw City come back from 3-1 down to draw 3-3 courtesy of two Shaun Goater goals, only to concede again in extra time and lose 4-3.
So City are chasing a first League Cup success against Southampton, with a place in the quarter-finals the reward.
It will be one of four successive home games for the Blues who - ironically - will play Southampton in the Premier League just a few days after this cup tie.
Everton vs Watford
Aston Villa vs Wolves
Manchester City vs Southampton
Burton vs Leicester
Crawley Town vs Colchester
Chelsea vs Manchester United
Oxford vs Sunderland
Liverpool vs Arsenal