Former Chelsea boss Mourinho will renew acquaintances with Manchester United manager Ferguson
Manchester United will face Jose Mourinho's Inter Milan in the last 16 of the Champions League.
Liverpool boss Rafael Benitez was handed a return to Spain to face former club Real Madrid in the draw in Nyon.
Former Chelsea boss Claudio Ranieri will make an emotional return to Stamford Bridge after Juventus were paired with last season's runners-up.
Arsenal, like Chelsea, will have been delighted to have avoided Barcelona and will take on AS Roma.
The ties will be played on 24/25 February and 10/11 March as the Champions League knockout phase begins.
Former Chelsea manager Mourinho made it clear that he wanted to draw an English club and he has landed a mouth-watering clash with United, with the first leg to be played at the San Siro.
The tie will revive memories of Mourinho's famous dash down the touchline at Old Trafford in March 2004 when Francisco Costinha's last-minute equaliser sent United crashing out of the Champions League and saw Porto through and on to eventual victory in the final.
"It's interesting to come up against Jose again," said Manchester United manager Sir Alex Ferguson.
"He's a character with a good personality and I've always got on well with him.
"He's knocked us out of the competition with Porto, so I hope we have the luck they had in that tie this time round."
Mourinho was keen to talk up his opponents, who are currently in Japan playing for the Club World Cup.
"I am satisfied, I wanted the best and I have got the European champions who maybe in two days will be world champions," said Mourinho.
"It is a team with the current Ballon D'Or winner (Cristiano Ronaldo), a great coach in Alex Ferguson and a stadium with a fantastic atmosphere.
"It will be unforgettable returning to Manchester. Some say I have a good record against Alex Ferguson but the record isn't mine, it's Chelsea's."
Former Tottenham boss Juande Ramos will return to England with Real Madrid as they take on Liverpool, with the second leg to be played at Anfield.
And Steve McManaman, who played for both sides - winning Champions League medals with Real Madrid in 2000 and 2002 - is confident that all the English sides will progress to the last eight.
"I think the English clubs will go through as I feel it (the Premier League) is still the strongest league around," McManaman told BBC Radio 5 Live.
"If any club is likely to damage English chances in the later rounds it will be Barcelona.
"The tie will be a test for Rafa Benitez going back to Spain as he is a Madrid boy at heart. Real are currently decimated by injuries but they will have a different looking team by February.
Liverpool focused on beating Gunners
"However, I think Liverpool remain favourites, especially with the second leg at Anfield."
The fixture is a repeat of the 1981 final in Paris, which the English side won 1-0, and Liverpool club secretary Bryce Morrison told BBC Radio 5 Live: "We haven't played Real Madrid since Paris in a competitive game.
"I think the current situation is there might be stronger teams around but Madrid are probably not happy with the situation that they find themselves in, and they will turn it around.
"You can't get a bigger tie than this and the fans will be relishing it."
Ramos added: "I know Liverpool perfectly as well. I know how difficult they are and the difficulties they are going to present us, but I think it will be an exciting tie.
"They are a team with many qualities, a team made in the image of their coach: tough, with good players in attack, in defence, in goal...they are quite a complete team.
Wilkins relishing Ranieri reunion
"Real Madrid don't have to fear anybody. We know that they are a difficult opponent but that we are going to have as much a chance of winning as them."
Arsenal and Chelsea both faced the possibility of playing favourites Barcelona but avoided the in-form La Liga leaders.
Arsene Wenger's side will have the first leg at home as they play AS Roma, while Chelsea will welcome back former boss Ranieri for their clash against Juventus.
"Of course we have a great chance of winning the competition, like any team at that level," said Wenger.
Chelsea are focused on winning the Champions League, for Abramovich it would be a disaster not to win it
Juve coach Claudio Ranieri
"But now the Champions League becomes a different competition, like a cup competition. If you miss five minutes of the 180, you are out."
Roma coach Luciano Spalletti said: "That does me just fine. There's no point in talking about it now we must simply show what we're made of and how we're prepared to make sacrifices.
"To Arsenal I want to congratulate them for their system. They have many young players on their way to becoming great players who are being chased by all the big clubs in Europe."
Ranieri was a popular figure at Stamford Bridge before being replaced by Mourinho in 2004, despite guiding them to the Champions League semi-final, where they lost to Monaco.
"This triple Anglo-Italian challenge is fascinating," said Ranieri. "And from our perspective, we'll try to keep Chelsea off the top of the world where (owner Roman) Abramovich wants to lead them.
"Chelsea are focused on winning the Champions League, for Abramovich it would be a disaster not to win it.
Wenger targets Roma victory
"It's a great challenge. I wouldn't say I'm happy but it will be a fascinating match, we'll need to be on top of our game."
The Italian added: "You cannot forget four years at a club. I don't think Chelsea forget either."
The clash, meanwhile, appeals to Chelsea assistant manager Ray Wilkins, who feels that Juventus will present a stiffer challenge than Roma, who the Blues played in the Group stages.
"Roma were a big test for us but I think Juventus are a better team, they are higher than Roma in the table," said Wilkins.
"Juventus will be well organised, they have some good players, none more so than Alessandro Del Piero who seems to have been reborn this year.
"Pavel Nedved is still going strong at 36 and he can hurt you.
"They are playing in quite a small stadium but the atmosphere will be fantastic and I am looking forward to it."
And looking ahead to a tie with Spanish league leaders Barcelona, Lyon sporting director Bernard Lacombe admitted: "I am very worried.
"Lyon couldn't have found a worse adversary. Barca has the best players in Europe in its squad.
"It's mission impossible, equivalent to you asking me to jump over the crossbar with both feet tied."
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