The two sides were drawn together in the group stage, and it was Jurgen Klopp's men who took the top spot in Group D, thanks to a 2-1 victory over Los Blancos at Signal Iduna Park and a draw at Estadio Santiago Bernabeu two weeks later.
Consequently, Butragueno, the Real Madrid director and former star forward, is well aware of just how big a job the Liga giants have on their hands.
"It is an honor for us to play the semifinals of this great competition," Butragueno told the club's official website. "Regarding Borussia Dortmund, I have to say that we have met twice this season against them and we have not been able to beat them.
"So, eliminating them will not be easy, but we are looking forward to the final at Wembley that we are all dreaming of."
Madrid will travel to Dortmund for the first leg before welcoming the Bundesliga outfit back to the Spanish capital a week later. The winner will face either Barcelona or Bayern Munich in the final.