Due to the coronavirus pandemic and quarantine issues, UEFA initially wanted those remaining games played in Lisbon, where the tournament will be completed on a single-game knockout basis after the last 16.
City have lobbied hard to preserve their home advantage, even though the game will be played behind closed doors.
Real want it to go ahead in Portugal, because of travel and health concerns.
Madrid media sources have suggested in the last 24 hours that City have won the battle to stage the second-leg at their stadium. The Sky Blues lead the tie 2-1 on aggregate.