The draw in Nyon also saw Manchester United paired with Porto, while Arsenal will take on Villarreal. Barcelona and Bayern Munich will meet in the other match.

Next month's two-legged clash means Liverpool and Chelsea will have faced each other five times in the competition in recent years.

Liverpool were victorious on the first two occasions, but Chelsea finally got the better of the Anfield side on the way to the final last year.

The Reds reached the final in 2005 at the expense of the Stamford Bridge club, with then Blues boss Jose Mourinho left seething as Luis Garcia's goal at Anfield, which decided the tie, was deemed to have crossed the line in front of the Kop.

Liverpool again prevailed two years ago, winning a penalty shoot-out to make sure of a place in the final, which they lost to AC Milan - the team they had beaten on penalties to win the competition two years previously.

The first leg will take place on April 8 - and Liverpool chief executive Rick Parry was relieved that the second leg at Chelsea will not take place on April 15, the 20th anniversary of the Hillsborough disaster.

He told Setanta Sports: "I'm literally just getting news that we will be playing on April 14. It is a huge relief and a good outcome."

He added on Sky Sports News: "We know what we've got to do over the two legs. We know what we`re capable of doing so we will get on with it now."

Chelsea secretary David Barnard said: "We probably know the inside leg measurements of Rafa's (Liverpool boss Rafael Benitez) trousers. It`s something that`s completely extraordinary they should play so many times."

United boss Sir Alex Ferguson expressed his pleasure with United's draw with Porto.

The Premier League leaders are at home on April 7, heading to Portugal for the return eight days later.

The Scot said: "This is a good draw for us, we've met Porto before and obviously we respect any Portuguese team.

"We have had a huge Portuguese influence in the club firstly with Carlos Queiroz but now with Cristiano (Ronaldo) and Nani so we understand Portuguese football."

The match brings back memories of 2004, when then Porto boss Mourinho charged up the Old Trafford touchline in delight after a 90th-minute Costinha goal took the Portuguese side through at the expense of United.

Arsenal boss Arsene Wenger was pleased to have home advantage in the second leg on April 15 but does not consider opponents Villarreal to be underdogs.

The Gunners dumped the Spanish side out in the semi-finals in 2006 but Wenger said: "It is a difficult 50/50 draw.

"We know Villarreal and we have the experience having played them before. It is maybe a good opportunity to play the first game away.

"In this game there is no real favourite and if I show you what has been said in the newspapers over the last six months you cannot put us as a favourite.

"Now many players go away on international duty and I hope we don't lose players through injuries because many of our players are coming back now from injuries. It looks like we are in a good situation."

Should Arsenal and United both progress they will meet each other in the semi-finals, with the winners of the Liverpool v Chelsea tie taking on either Barcelona or Bayern Munich.

The first leg of the semi-finals is due to take place on April 28-29, with the return matches going ahead the following week.

Chelsea's interim boss Guus Hiddink said his players were looking forward to the Liverpool clash.

"It's getting more and more exciting at the end of the Champions League season," he said.

"If you have great desire to get to the end in May, you have to play them - Liverpool, Manchester United, Barcelona. I'm OK with the draw.

"I was told that there have been a lot of clashes between the two teams in several competitions.

"They're never boring games between these two big powerhouses of football.

"The draw happened during practice and one of the officials came and told us. The players stopped their exercises and said: 'Who, who, who?' That's nice.

"They were very keen to know who their opponent would be, which shows their enthusiasm. That's nice to see.

"Both teams like to play football and have players in their teams to play in an attacking way. That's a guarantee for big clashes."

Rio Ferdinand felt the draw would give Manchester United a chance to avenge memories of 2004, when Jose Mourinho's Porto dumped Sir Alex Ferguson's side out of the Champions League.

Ferdinand said: "We are excited and looking forward to it. We have a bit of unfinished business with Porto.

"It's a bit of cliche but any team in the quarter-finals is going to be decent and Porto are there for a reason."

The United defender admitted he was pleased to have avoided English opposition.

Ferdinand added: "It's a decent draw for us.

"Emotionally and physically it's perhaps more draining with playing another English side. We know that from playing Chelsea in the final.

"It will be an emotionally draining battle for Liverpool and Chelsea and we will have to wait and see how much they kick out of each other!"

Benitez insists United are rightful favourites to retain their crown.

He said: "Manchester United must now be favourites, they have an easier draw than us. Our half of the draw is the more difficult now after this draw."

But Benitez was pleased that the prospect of Liverpool having to play on the 20th anniversary of the Hillsborough disaster have now gone.

He said: "Obviously we did not want to do that and with the second leg of our quarter-final now scheduled for London on the 14th, our wishes have been agreed with."