Manchester City: Alleged financial fair play violations investigated
Uefa said the investigation "will focus on several alleged violations of FFP that were recently made public in various media outlets".
German news magazine Der Spiegel has published a series of claims, based on leaked documents, that Premier League champions City have violated FFP rules.
City said: "The accusation of financial irregularities is entirely false."
The club added: "Manchester City welcomes the opening of a formal Uefa investigation as an opportunity to bring to an end the speculation resulting from the illegal hacking and out of context publication of City emails.
"The club's published accounts are full and complete and a matter of legal and regulatory record."
Uefa previously found City had breached FFP rules in 2014.
The two parties reached a settlement, with City paying a £49m fine - £32m of which was suspended - while their Champions League squad was reduced for the 2014-15 season.
The Football Association is looking into claims City made a banned £200,000 payment to Jadon Sancho's agent when the England winger was 14 years old.
That allegation was also made in documents published by Der Spiegel last month.
Uefa says it will make no further comment while the investigation is ongoing.
FFP rules are designed to ensure that the amount clubs spend on their players and wages is approximately equal to what they earn in commercial revenue and prize money.
In November, Der Spiegel alleged City had "deceived" European football's governing body. Read more...