City will play in the Champions League and United in the Europa League.
The issue had been that City's LaLiga partners, Girona, are also in the Champions League next term, with United's French partners Nice in the Europa League.
However, UEFA's Club Financial Control Body (CFCB) announced on Friday "significant changes" had been made at Girona and Nice which would "substantially restrict investors' influence and decision-making power".
Among developments, the owners agreed to have shares transferred through independent trustees to a blind trust, which will be supervised by the CFCB.
CFCB announced on Friday:
"The CFCB First Chamber accepted the admission of Girona FC (ESP) and Manchester City FC (ENG) to the 2024/25 UEFA Champions League as well as Manchester United FC (ENG) and OGC Nice (FRA) to the 2024/25 UEFA Europa League.
"The First Chamber of the UEFA Club Financial Control Body (CFCB First Chamber) had previously opened proceedings involving:
"• Girona FC (ESP) and Manchester City FC (ENG); and
"• Manchester United FC (ENG) and OGC Nice (FRA)
"due to a potential conflict with the multi-club ownership rule provided for in Article 5 of the UEFA club competitions regulations.
"Following the implementation of significant changes by the concerned investors in Girona FC and OGC Nice (respectively City Football Group and INEOS), the CFCB First Chamber accepted the admission of Girona FC and Manchester City FC to the 2024/25 UEFA Champions League as well as Manchester United FC and OGC Nice to the 2024/25 UEFA Europa League. The clubs were able to demonstrate that such changes brought them into compliance with the multi-club ownership rule, considering that:
"• No one is simultaneously involved, directly or indirectly, in any capacity whatsoever in the management, administration and/or sporting performance of more than one club participating in a UEFA club competition; and
"• No one has control or decisive influence over more than one club participating in a UEFA club competition.
"More specifically, the significant changes made to the ownership, governance, and financial support of the concerned clubs, substantially restrict the investors’ influence and decision-making power over more than one club, ensuring compliance with the multi-club ownership rule during the 2024/25 season.
"In particular, the concerned investors have transferred their shares in Girona FC and OGC Nice to independent trustees through a blind trust structure established under the supervision of the CFCB First Chamber. Such blind trust was accepted by the CFCB First Chamber on an exceptional basis for the 2024/25 UEFA competitions. The trustees will regularly exchange information with the CFCB First Chamber during the 2024/25 season.
"As a result, the following applies at the level of Girona FC and OGC Nice for the 2024/25 season:
"• the effective control and decision-making of these clubs rest solely under control of the trustee;
"• following the resignation of its board members, the investor is no longer represented on the board of directors and has no capacity to directly appoint new directors to the board;
"• the trustee appointed the new directors to the board;
"• the investors have no ability to influence sporting related decisions;
"• the investors have no ability to influence the club through veto rights or contractual arrangements entered into with other shareholders;
"• the investors are restricted in their ability to provide subsequent financing;
"• the club’s financial statements will be deconsolidated from the investors’ holding company.
"Furthermore, as additional evidence of their independence, the concerned clubs committed to the following:
"• the clubs will not transfer players to each other, whether permanently or on loan, directly or indirectly, from July 2024 until September 2025, with the exception of pre-existing transfer agreements that had been entered into before the opening of the CFCB proceedings;
"• the clubs will not conclude any kind of cooperation, joint technical or commercial agreements between each other; and
"• the clubs will not use any joint scouting or player database.
"From 1 July 2025, the shares in Girona FC and OGC Nice will be transferred back to their respective investor. As a result, in the absence of any major modifications to the clubs’ shareholding, governance or financing, the above-mentioned clubs shall be considered, as from that date, under the control or decisive influence of their investor.
"The CFCB First Chamber will continue to monitor the above-mentioned situations to ensure that the multi-club ownership rule continues to be complied with during the 2024/25 season."