The game will be played at the Etihad Stadium, week commencing 28 October - date and ticket details will be confirmed in the coming days.
It will be the sixth time the two teams have met in the League Cup - and City are yet win against the Saints in this competition.
The first meeting was in 1978, with Southampton winning 2-1 at The Dell.
Then, in 1982, City drew 1-1 at Maine Road but the Blues or Southampton were then drawn against Manchester United in Round 4 - for whoever won the replay.
Saints thrashed City 4-0 at The Dell and went on to face the Reds who eventually who eventually won the cup,
In 1999, City were held 0-0 by Southampton at Maine Road - the replay at The Dell saw City come back from 3-1 down to draw 3-3 courtesy of two Shaun Goater goals, only to concede again in extra time and lose 4-3.
So City are chasing a first League Cup success against Southampton, with a place in the quarter-finals the reward.
It will be one of four successive home games for the Blues who - ironically - will play Southampton in the Premier League just a few days after this cup tie.
Full draw:
Everton vs Watford
Aston Villa vs Wolves
Manchester City vs Southampton
Burton vs Leicester
Crawley Town vs Colchester
Chelsea vs Manchester United
Oxford vs Sunderland
Liverpool vs Arsenal
