English champions Leicester play their first quarter-finals in the top-tier European competition against Atletico Madrid.
English champions Leicester play their first quarter-finals in the top-tier European competition against Atletico Madrid as France's Monaco clash with Borussia Dortmund over two legs in April.
Ancelotti, who led Real to their tenth Champions League title in 2014, was looking forward to a special tie.
"It is going to be exciting to play against them. We are very confident and want to win the Champions League this season," said Ancelotti, who also won the European title twice with AC Milan.
"I think we have the ability to beat Real Madrid."
Bayern chairman Karl-Heinz Rummenigge was relishing a 'classic' as his five-time winners target more than just a sixth straight semi-final appearance.
"This is a classic, which is probably the absolute top draw that lay in the pot," said the former Germany striker.
"All football fans in the world can look forward to it."
Real Madrid director Emilio Butragueno, however, appeared downcast.
"It is one of the worst draws we could have got without a doubt but it is also for them," said Butragueno.
"We would have liked to have faced them further on in the competition," the former Spanish international said.
"It is not the best draw, but we too have top quality players with a lot of experience and it is a great tie. For sure the whole world will be watching these two games."
Italian giants Juventus can avenge their narrow 2015 final defeat against Barcelona, but face the daunting task of muting the competition's top marksman Lionel Messi.
Juventus vice-president Pavel Nedved hinted at the size of the task ahead of them.
"You need to be at your best for 180 minutes or more to overcome Barca," said former midfielder Nedved.
"It's a fascinating tie. Juve have improved a lot since 2015 and this team can play without fear against Barcelona."
Leicester landed last year's beaten finalists Atletico Madrid, a draw which prompted British bookmakers to slash the odds making Atletico third favourites to lift the trophy in the June 3 final at Cardiff behind Barcelona and Bayern.
The Foxes will travel to the Spanish capital for the first leg in the week beginning April 10, with the second match the following week.
Leicester are England's sole representatives following the elimination in the last 16 of Manchester City and Arsenal.
Diego Simeone's Atletico have reached the Champions League final in two of the last three seasons, losing to city rivals Real on both occasions, last year on penalties.
"Facing a team who have reached the final in two of the last three seasons is a massive challenge but it’s just the kind of tie you expect in the quarter-finals of the Champions League," said Leicester replacement manager Craig Shakespeare.
"Atletico Madrid are a very good team with some fantastic individuals with experience in the competition, but we’ll be ready to give everything to progress.
"It will be a brilliant occasion for our supporters and for everyone at the club but, before the players can begin to think about these games, we have Premier League matches to come that are of huge significance to our season. They will be our sole focus."
France's free scoring Monaco were drawn to meet Thomas Tuchel's Borussia Dortmund meaning goalking Pierre Emerick Aubameyang goes back to his old club.
"I saw Monaco's match against Manchester City and I am aware that they have a goal difference of +58 in the league. It's a difficult match," said Dortmund chairman Hans Watzke.