In what is arguably the tie of the round, the clash is a repeat of the 2019 final that saw City triumph 4-3 on penalties.
Prior to that, City and Chelsea had met twice in the League Cup - the first ending in a 4-1 defeat for the Blues at Stamford Bridge in 1984 and the second clash ended 1-0 to City at Maine Road in 1993.
With six Carabao Cup final victories since 2014, City have dominated the competition in recent times.
Last season, the Blues were knocked out by West Ham United on penalties, bringing an end to a four-year reign as Carabao champions.
Liverpool went on to beat Chelsea in the final.
The third round ties will take place the week commencing 7 November and details of City’s tie, including tickets, date and time will be released in due course.
The Chelsea game is sandwiched between two other matches against London opposition, with Premier League clashes with Fulham (5 November) and Brentford (12 November) - all at the Etihad!
Full draw:
Leicester City vs Newport County
West Ham vs Blackburn Rovers
Wolves vs Leeds United
Nottingham Forest vs Tottenham
Manchester United vs Aston Villa
Bournemouth vs Everton
Liverpool vs Derby County
Brentford vs Gillingham
Bristol City vs Lincoln
Manchester City vs Chelsea
Stevenage vs Charlton
MK Dons vs Morecambe
Newcastle vs Crystal Palace
Southampton vs Sheffield Wednesday
Arsenal vs Brighton
Brentford vs Gillingham
Dates of rounds:
Round Three – week of 7 November 2022
Round Four – 20/21 December 2022
Round Five – January 2023
Semi Final 1st leg – w/c 23 January 2023
Semi Final 2nd leg – w/c 30 January 2023
Final – Sunday 26 February 2023