Pep Guardiola makes a total of seven changes from the starting line-up that took on Huddersfield in Saturday's FA Cup match.
And the inclusion of the Brazilian midfielder as a makeshift full-back is one of the most surprising selections for the visit of the Ligue 1 side.
In Gabriel Jesus' injury-forced absence, meanwhile, Sergio Aguero starts as City's lone centre-forward in a 4-1-4-1 line-up.
Yaya Toure is tasked with anchoring the midfield, while ahead of him Raheem Sterling, David Silva and Kevin De Bruyne will lend support to the Argentine in breaking down Monaco's backline.
Manchester City: Caballero; Sagna, Stones, Otamendi, Fernandinho; Yaya; Sane, Silva, De Bruyne, Sterling; Aguero.
Substitutes: Bravo, Zabaleta, Fernando, Nolito, Navas, Delph, Iheanacho.
Monaco: Subasic; Sidibe, Raggi, Glik, Mendy; Fabinho, Bakayoko; Silva, Lemar, M'Bappe; Falcao.
Substitutes: De Sanctis, Dirar, Moutinho, Carrillo, Germain, Diallo, Tour