The 27-year-old has only featured six times off the substitutes' bench so far this season following his summer arrival from Leeds United - largely due to injury - but the midfielder will make his full debut for Pep Guardiola's side against the Saints.
Guardiola has made four changes to the side that beat Chelsea 4-0 in the FA Cup third round last weekend, with Phillips, Joao Cancelo, Ilkay Gundogan and Jack Grealish coming in for Rodri, Manuel Akanji, Bernardo Silva and Riyad Mahrez.
The inclusion of Cancelo will see the Portugal international start at right-back, with Kyle Walker partnering Aymeric Laporte at centre-back.
Phillips and Gundogan will be joined in the midfield three by Phil Foden, while Grealish - who missed last weekend's win over Chelsea through illness - will start in attack alongside Julian Alvarez and Cole Palmer.
Guardiola has opted to name Erling Braut Haaland and Kevin De Bruyne on the substitutes' bench for the second successive game, with one eye presumably on Saturday's Premier League clash against rivals Manchester United, while John Stones is not named in tonight's matchday squad.
As for Southampton, Nathan Jones has made five changes to his starting lineup following last weekend's FA Cup win over Crystal Palace, with Kyle Walker-Peters, Ibrahima Diallo, Moussa Djenepo, Romeo Lavia and Sekou Mara all brought in to the side.
The Saints have also announced the signing of Carlos Alcaraz before tonight's game, with the 20-year-old midfielder joining from Racing Club on a four-and-a-half-year contract.
Southampton starting lineup: Bazunu; Lyanco, Caleta-Car, Salisu; Djenepo, Diallo, Ward-Prowse, Lavia, Walker-Peters; A. Armstrong; Mara
Subs: Caballero, Perraud, Edozie, Elyounoussi, Orsic, Adams, Aribo, Morgan, Finnigan
Manchester City starting lineup: Ortega; Canelo, Walker, Laporte, Gomez; Gundogan, Phillips, Foden; Palmer, Alvarez, Grealish
Subs: Ederson, Ake, Akanji, Lewis, Bernardo, Rodri, De Bruyne, Haaland, Mahrez