Chelsea were paired with Spanish giants Barcelona in the first knockout stages of the Champions League.
Manchester United were also given a tough draw, with the 1999 winners facing Italian side AC Milan.
Premiership champions Arsenal and Liverpool were both drawn against German sides.
Arsenal will play Bundesliga leaders Bayern Munich in the next stage, while Liverpool were handed a tie against German side Bayer Leverkusen.
Arsenal and Chelsea both avoided Real Madrid, who were drawn against current Serie A table-toppers Juventus - now coached by former Real manager Fabio Capello.
The London sides will both play their first leg away after finishing top of their groups.
Chelsea boss Jose Mourinho had said he wanted to play La Liga leaders
Barca in the last 16.
Mourinho, who won the Champions League with Porto last season, worked as an assistant coach with the Catalan side.
Manchester United and Liverpool will both play at home in their first legs.
United will face Milan for the first time in the European Cup during manager Sir Alex Ferguson's 18-year reign at Old Trafford.
Bayer Leverkusen knocked out Liverpool on their way to the 2002 Champions League
final.
The reigning champions Porto were drawn against Inter Milan.
Full Champions League draw:
Real Madrid v Juventus
FC Porto v Inter Milan
Barcelona v Chelsea
Werder Bremen v Lyon
Liverpool v Bayer Leverkusen
PSV v Monaco
Manchester United v AC Milan
Bayern Munich v Arsenal
The first leg matches will be played on 22/23 February and the return
ties are on 8/9 March.