There had been worries over the Argentine defender after he limped out of the win over West Bromwich Albion on Sunday.
That had left him a huge doubt for the quarter final second leg against the French champions on Tuesday, as City look to progress following the 2-2 draw in Paris last week.
However, it seems the injury was not serious and Otamendi is set to feature in the game, although there was less positive news when it came to City captain Vincent Kompany.
“Otamendi twisted his ankle and has some pain but he is OK to play,” Pellegrini told a press conference as reported by the Manchester Evening News.
"He [Kompany] is not 100%. It is not possible," added Pellegrini.
The news on Otamendi will come as a huge relief given Kompany looks set to miss out once again.
Whether City can progress to the semi-finals remains to be seen, but there is no denying the Argentine’s presence increases their chances.
City could have ill afforded to lose him as well as their captain for such a big game, with the idea of much-maligned duo Martin Demichelis and Eliaquim Mangala up against Zlatan Ibrahimovic a worrying one to say the least.