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Abu Dhabi-owned City said they were “disappointed but regrettably not surprised” by UEFA’s decision.
City reportedly faces a season-long ban from the Champions League if found to have breached the regulations.
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UEFA said its Club Financial Control Body (CFCB) chief investigator “has decided to refer Manchester City FC to the CFCB adjudicatory chamber following the conclusion of his investigation.”
The investigator, Yves Leterme, has been examining evidence that first came to light in leaks published by German magazine Der Spiegel last year.
The reports alleged that City had broken Financial Fair Play regulations by inflating the value of a multimillion-pound sponsorship deal.
City was fined £49 million in 2014 for a previous breach of regulations.
The club said in a statement: “Manchester City is entirely confident of a positive outcome when the matter is considered by an independent judicial body.”
The club retained the Premier League title last Sunday after a tight title race with Liverpool and can complete a historic treble of domestic trophies by beating Watford in the FA Cup final on Saturday.
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