Zinedine Zidane's men avoided Bayern Munich and domestic rivals Atletico Madrid during Friday's semi-final draw, but former striker Butragueno, now a director at the Santiago Bernabeu, has warned his club City will pose a stern test, too.
"It will be a very even tie. We are talking about two clubs with players of the highest level," Butragueno was quoted as saying by AS.
"Manchester City are a very dangerous opponent and they will be hugely motivated.
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"We have to be at our best in both games if we want to make it to the final.
"I remember that we thought we were lucky to avoid Barcelona during last year's draw and then we were eliminated by Juventus. It is going to be a very difficult tie."
City and Madrid's only previous meeting came in the 2012-13 group stage, with the Liga side winning 3-2 at home before a 1-1 draw in Manchester.
The first leg at Etihad Stadium will take place on April 26, with the return in the Spanish capital scheduled for May 4.