The city rivals will have their fourth consecutive meeting in the last four years.
Atletico Madrid have been presented with an opportunity to avenge three UEFA Champions League defeats in the past three consecutive seasons against their city rivals.
Real Madrid defeated Atletico Madrid in the final of the 2013-14 Champions League before knocking them out of the competition the following season in the quarters. Last, Los Blancos again emerged champions at the expense of Atletico Madrid in a tension packed final.
In the other semi-final, high-flying Juventus, fresh from slaying Barcelona in the quarters, will entertain Monaco, who knocked out Borussia Dortmund.
Rael Madrid will host Atletico Madrid in the first leg on May 2, while Juventus will visit Monaco on 3 May.