The prolific Argentinian striker, who has scored 19 goals this season, has missed City's last eight games with a calf injury.
His return is ahead of the initial prognosis, when it was thought his comeback could be uncomfortably close to next month's Champions League clash against Barcelona.
It is also timely with playmaker Samir Nasri facing up to eight weeks on the sidelines with knee ligament damage.
Manager Manuel Pellegrini said: "Sergio is working with normality with the whole squad and he is on the squad list for tomorrow.
"He is a very important player for us. It doesn't matter if we are scoring a lot of goals, Sergio will always be a very important player and we are happy he is coming back."
Aguero's return is also welcome as the fixtures mount. The replay against Blackburn is an unwanted complication as City continue to pursue success in four competitions.
Pellegrini said: "It is very important because we have not only important games, but a lot of games, and all of them are important for us.
"We are the only team in all four competitions and we want to continue."
Nasri is certain to be missed having been enjoying a fine spell of form this season.
The France international was carried off on a stretcher after being caught by a bad tackle from Newcastle's Mapou Yanga-Mbiwa during Sunday's controversial Barclays Premier League win at St James' Park.
Pellegrini said: "He is a very important player for us.
"He was also playing in a very good moment so we hope he can come back as soon as possible, but I think less than six or seven weeks will be difficult."
Pellegrini insisted the injury would not alter his thoughts about possible additions during the transfer window, which remain a guarded secret.
He said: "No, it has not changed our philosophy. We know exactly what we are going to do in the transfer window."
City's 2-0 win at Newcastle has been overshadowed by a row over a controversially disallowed Magpies goal.
Cheick Tiote thought he had equalised at 1-1 with a superb long-range strike but Yoan Gouffran, stood in an offside position, was deemed to be interfering with play.
Newcastle manager Alan Pardew was incredulous and shouted abuse at Pellegrini, for which he later apologised, in the touchline argument that ensued.
Pellegrini said: "Yes, of course, he apologised at the match, I accepted it.
"When the match finishes, all the things stay there. It doesn't matter in the future so for me, there is no problem about that.
"In football you have experienced a lot of different things. Everyone acts the way he thinks is the best way to do it."
Pellegrini's attention now turns to overcoming Championship Blackburn, who caused City problems when they met at Ewood Park earlier this month.
Alvaro Negredo put City ahead but Rovers deservedly claimed a draw after a Scott Dann equaliser.
Pellegrini said: "They didn't surprise me, I think they played a very good match at home.
"I am absolutely sure that we must play a very good match if we want to win because they are very motivated.
"They are a very strong team, they know exactly the way they want to play.
"They are strong in defending, for counter-attacks, for different set-pieces and trying to score a goal. It will be very close."
Key midfielder Yaya Toure will miss the game having had an issue with a back injury.
Pellegrini said: "Yaya has, for the last two weeks, played with a problem with his back so it is a risk to continue doing that.
"It is better for him to rest for two or three days."
Playmaker David Silva also misses out having suffered a knock.