Manchester rivals City and United have been drawn together in the with Budweiser (premierleague.com).
The tie was the pick of the third-round draw and sees reigning Barclays Premier League champions United face holders City at the Etihad Stadium.
The two Barclays Premier League heavyweights met in the semi-finals of last season’s FA Cup, with City winning 1-0 at Wembley.
In the other tie featuring two Barclays Premier League sides, Newcastle United will host Blackburn Rovers.
Everton will be at home to non-league outfit Tamworth.
The ties will be played on the weekend of the 7/8 January.
Full third-round draw:
Middlesbrough v Shrewsbury Town
Nottingham Forest v Leicester City
Manchester City v Manchester United
Dagenham & Redbridge or Walsall v Millwall
Crawley Town v Bristol City
Doncaster Rovers v Notts County
Bristol Rovers v Aston Villa
Tottenham Hotspur v Cheltenham Town
Sheffield Wednesday v West Ham United
Milton Keynes Dons v Queens Park Rangers
Hull City v Ipswich Town
Coventry City v Southampton
Brighton & Hove Albion v Wrexham
Fulham v Charlton Athletic
Birmingham City v Wolverhampton Wanderers
Norwich City v Burnley
Arsenal v Leeds United
Derby County v Crystal Palace
Fleetwood Town or Yeovil Town v Blackpool
Swindon Town v Wigan Athletic
Barnsley v Swansea City
Chelmsford City or Macclesfield Town v
Newcastle United v Blackburn Rovers
Everton v Tamworth
Sheffield United v Salisbury City or Grimsby Town
Liverpool v Southend United or Oldham Athletic
Gillingham v Stoke City
Chelsea v Portsmouth
Watford v Bradford City
Peterborough United v Sunderland
West Bromwich Albion v Cardiff City
Reading v Stevenage