The Blues lead 3-2 from the first leg, having produced a sensational comeback to turn the game on its head late on with ten men, after Nicolas Otamendi was sent off in Germany.
However, with other last 16 second leg ties having thrown up shock results over the past week, Gundogan has urged his side to complete the job with a win on home soil.
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“We mustn’t give Schalke any chances,” he asserted. “They are in this part of competition.
“Hopefully, we’ll be on our game tomorrow, playing our style. If so, I believe we can win the game.
“We shouldn’t be too comfortable, after the result at Schalke. It was a huge result.
“At the knock-out stages, to have gone to Schalke and got a win, makes you feel happy and puts you in a comfortable situation but there’s still a game to play.
“Schalke only have to score two goals so we shouldn’t feel too comfortable.”
With Real Madrid – Champions League winners for the past three seasons – having been eliminated, City have now been tipped as favourites to lift the trophy for the first time.
Gundogan accepted that European success is of course, a major target but refused to add unnecessary pressure, as the Blues seek to clinch an historic quadruple.
“I had that feeling already in the last two or three years but Real Madrid won it,” he said.
“It shows that nothing is already written. They are out now so there will be a new Champions League winner but great teams are competing in this tournament.
“If we want to be named as the best in Europe, we have to do it. It’s our ambition but in terms of how we play, we feel we are already quite good.
“We have to prove it on results and obviously, that means going as far as possible in the Champions League – that’s our target. That’s why we play.
“In terms of numbers, we already proved we are better than last season. We won the Carabao Cup again, we are still in the Premier League title race, we are in the knock-out stages of the Champions League and in the quarter-finals of the FA Cup.
“It shows we are fluent but nothing is won yet. Obviously, there are two or three months to go – a long time until the season ends – and the upcoming weeks will be crucial.”
Gundogan has recently been employed in the holding midfield role, providing much-needed cover to Fernandinho.
Although it is not his natural position, the German asserts he is simply enjoying increased gametime and learning a new role.
“I think you can always learn when you play certain position,” he stated. “I have done for the last few weeks.
“I think that the more you play it, the better you feel – more comfortable, when you are repeating it every three or four days.
“You get a feeling for how you have to behave – to be there in duels. Obviously, I have to adjust my type of game but the more I play this role, the more I feel comfortable – even though it’s not my main position.
“I can play it and if I can help the team, I’m more than happy.
“The biggest plus is the quality we can get from our bench in every game. Pep always has to make difficult decisions – that shows the quality of the squad. It’s up to us to prove we are ready to compete in all competitions.”
Gundogan was also asked about his plans for the future, and whether he intends to extend his contract at City.
“We are still in talks but I don’t feel there is much pressure,” he continued.
“I am very happy here, especially for way we play and playing under Pep. That’s the main thing. There will be a decision.
“At the moment, I’m trying to play as well as possible. After the season, we will sit and talk again.
“My main target at the moment is to go for all competitions and be successful.”