The Reds will host the Premier League leaders in the first leg of their Champions League last-eight clash at Anfield.
The Merseyside outfit were 5-0 winners against Portuguese side FC Porto in the round of 16 to progress to quarter-final stage.
Manchester City, meanwhile, eased to a 4-2 victory over Swiss outfit Basel in the Champions League to set up the meeting with Liverpool FC.
Liverpool FC are the only Premier League team to have beaten Manchester City this season following a thrilling 4-3 win at Anfield in February.
Keown was part of the Arsenal Invincibles team that lost to Chelsea FC in the last eight despite winning the Premier League title without losing a game.
And the ex-Arsenal defender used his experience in the 2004 Champions League quarter-final as a reason why Liverpool FC could beat Manchester City.
”It reminds me of when we [Arsenal] played Chelsea in the quarter-finals in 2004,” Keown told the Daily Mail.
“We may have been unbeaten in the league but we underachieved that season because we did not win the FA Cup or the Champions League.
“That season we had already beaten Chelsea twice in the league and knocked them out the FA Cup. They had hardly beaten us in 25 years.
“When I saw the draw, though, I thought we can’t keep beating this lot.
“I hoped Liverpool and City would be kept apart. We may be guaranteed a semi-finalist but both teams could have done real damage in this competition.
“With their strikeforces, these teams are capable of beating anybody on their day. They are like two boxers who have real knockout punches. This could be an epic.”
Liverpool FC are looking to win the competition for the sixth time after the dramatic comeback victory over Italian giants AC Milan in the Champions League final in Istanbul.
The Reds lost 2-1 to AC Milan in the Champions League in 2007.
Manchester City have never won the competition but their manager Pep Guardiola is a two-time winner.
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