Kevin de Bruyne gave Manchester City a 1-0 advantage in the first leg against Atletico Madrid
The Spanish champions must close off at least 5,000 seats at the 68,456-capacity Wanda Metropolitano.
Uefa's punishment is for the "discriminatory behaviour" of Atletico fans during last week's first-leg match in Manchester, where City won 1-0.
Atletico will also have to display a Uefa banner reading "#NoToRacism".
Meanwhile, Uefa has provisionally suspended Roma goalkeeper coach Nuno Santos and Bodo/Glimt manager Kjetil Knutsen while they investigate an alleged altercation between the two in the aftermath of last Thursday's Europa Conference League game.
Bodo/Glimt claimed a 2-1 victory over Jose Mourinho's Roma side in the first leg of the quarter-final.
The Norwegian club released a statement which stated they had video evidence of head coach Knutsen being attacked by members of Roma's support staff, including Santos.
In response to Uefa's decision to suspend Knutsen, Bodo/Glimt released a statement saying: "We are surprised and shocked by Uefa's decision. We will appeal, and will work on it throughout the evening. Beyond that, we currently have no comments."
-- Courtesy of BBC Sport