City were paired up with Sundowns after edging Maritzburg United 1-0 in the quarter-finals of the cup on Sunday courtesy of Keanu Cupido's goal at Harry Gwala Stadium.
The Citizens, who lost in the final of the competition to SuperSport United in 2017, were drawn as the home side on the weekend of August 25/26, and will likely entertain the Absa Premiership champions at Cape Town Stadium.
"This season is too different," said McCarthy, whose team were knocked out of the Nedbank Cup by the Brazilians in 2017/18, having each won a league game against each other last term.
"Sundowns now have strengthened, Everyone can see that every day there’s two new players coming. They look better and better.
"So it’s going to be a very, very difficult encounter, very tough. But they might be ... Goliath in this situation, but at this moment in time we must get any one.
"Like we said, if you want to be the champion, if you want to win titles, you've got to beat the best team in the competition - and fortunately for us the best team in our league is coming earlier than expected.
"But last season we had the same thing. They said Bidvest Wits [in the semi-finals] was in our way also and we had no chance against Wits. But we went past, we sailed past them and found ourselves in the final.
"So we are just going to take it one game at a time and when Sundowns come we’ll deal with it.
"We've got two bites at the cherry, not just one. You've got the home and away encounters. We are going to try and put ourselves in a respectable position to go at Sundowns and fight for what you want at home.
“And at home, if you were there against SuperSport (City won 2-0 in the league on August 4), people can see we are not a walk in the park. It’ll be nice,” concluded the 40-year-old record scorer for Bafana Bafana.
McCarthy, who is in his second campaign as a head coach, won the MTN8 with Orlando Pirates as a player in 2011.