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The Bundesliga outfit was in the lead with a 2-1 scoreline at halftime but goals from Sane and Sterling prevented them from collecting an advantage over City ahead of the second leg tie due to be held at the Etihad Stadium.
Sane was signed by Pep Guardiola from the Royal Blues in 2016. The German winger made his name at the Veltins-Arena but got to develop as a world beater in the City ranks.
After the match, he told BT Sport, “I was a little bit sad for Schalke because the atmosphere was amazing like it always is.”
“You can see the will is a lot, we never give up, we always want to keep fighting. Schalke did really well, the way they defended made it difficult. At the end we did it, we scored three goals away – that was the most important thing.”
The return leg is on March 12. Prior to that, City have the chance to claim their first trophy of the season by beating a low-morale Chelsea side in the Carabo Cup final at Wembley Stadium on Sunday.