The England international has recovered from a hamstring injury that kept him out for two games, but joins Sergio Aguero and David Silva on the bench.
And after the forward’s controversial interview last week, which saw him pose with a Real shirt draped over his shoulder, Pep Guardiola said Sterling was desperate to play in the Champions League round of 16 tie.
“Yes he’s fit,” said the City manager. “His natural condition, his regeneration is amazing.
“He said to us he could have played against West Ham or Leicester, but the doctor said to be careful.
“A muscular injury is three weeks or one month, but he wanted to play and that’s a good sign. He’s fit he’s ready.”
City travelled to Madrid with a virtually fully fit squad, with Leroy Sane the only notable absentee as he enters the closing stages of his recovery from knee ligament damage.
Man City XI: Ederson, Walker, Laporte, Otamendi, Mendy, Rodrigo, Gundogan, Mahrez, De Bruyne, Bernardo, Jesus
Subs: Bravo, Sterling, Aguero, Silva, Fernandinho, Cancelo, Foden
Real Madrid XI: Courtois, Carvajal, Ramos, Varane, Mendy, Casemiro, Modric, Valverde, Isco, Vinicius, Benzema
Subs: Areola, Miltao, Marcelo, Kroos, Lucas Vazquez, Bale, Jovic