The two Manchester clubs will meet in the semifinals of the English League Cup after both pulled clear in the second half to beat lower-division opponents in the last eight on Wednesday.
City stayed on course to win the competition for a third straight season after Raheem Sterling scored twice after halftime in a 3-1 win at third-tier Oxford that proved tougher than expected for the Premier League champions.
United scored all of its goals after the break to earn a 3-0 win over Colchester, which arrived at Old Trafford in ninth place in the fourth tier and defended stoutly before Marcus Rashford's opener on the counterattack in the 51st minute.
The neighbors were then paired in the draw for the two-legged semifinals, for a repeat of their last-four meeting in 2010 that saw United advance thanks to Wayne Rooney's injury-time goal in the second leg at Old Trafford.
Leicester, which is in second place in the Premier League, will start as favorite in the other semifinal against Aston Villa after beating Everton 4-2 in a penalty shootout, having squandering a two-goal lead to draw 2-2 after 90 minutes.
Villa thrashed a heavily weakened Liverpool team 5-0 on Tuesday.
The first legs of the semifinals take place on Jan. 7 and 8. The returns legs are two weeks later.
Sterling started in the unusual position of lone striker and provided more evidence of the improvement in his finishing, which has largely been credited to the coaching under City's assistant manager Mikel Arteta.
Seemingly on the verge of taking charge at former club Arsenal, Arteta was in the dugout for City for perhaps the final time and saw Sterling show good movement to score within five minutes of a surprising equalizer by Oxford just 21 seconds after halftime.
Sterling added a third goal in the 70th minute, again from close range from a central position.
''I am there to put them in, no matter how they come,'' Sterling said.
City, which took the lead through right back Joao Cancelo's first goal for the club in the 22nd, allowed 18 shots - 16 coming in the second half - to a team that is in eighth place in League One. According to stats supplier Opta, that's the most shots City has faced in a single match under Pep Guardiola in his 3 1/2 years in charge.
United scored all of its goals in the second half against Colchester, with Rashford and Anthony Martial netting either side of an own-goal.
Jamie Vardy converted the winning penalty in the shootout at Goodison Park for Leicester, which was 2-0 up through first-half goals by James Maddison and Jonny Evans before conceding an equalizer in injury time to Everton left back Leighton Baines.