Mikel Arteta’s side were rocked by second half goals from Julio Enciso, Deniz Undav and Pervis Estupinan at the Emirates Stadium.
Second placed Arsenal trail City by four points and a defeat for the Gunners at Nottingham Forest on Saturday would hand Pep Guardiola’s men their fifth title in six years.
Fired by Ilkay Gundogan’s brace and Erling Haaland’s latest goal, City’s 3-0 win at Everton earlier on Sunday had moved them within touching distance of the title.
Arsenal’s dismal loss makes the silverware almost certain to remain in Manchester.
Even if Arsenal beat Forest, City will be champions for a third successive season if they defeat Chelsea at the Etihad Stadium in their next game on May 21.Speaking after City’s win at Goodison Park, Guardiola revelled in his team’s ability to dominate in the title race while also competing for the Champions League and the FA Cup.City host Real Madrid in the Champions League semi-final second leg on Wednesday with the tie level at 1-1 and face Manchester United in the FA Cup final.
“It’s a dream come true being here. The only team in Europe to be fighting in all competitions,” Guardiola said.
“From minute one we took the game in our hands. It was a brilliant performance at the end of the season.
“Still it is not over, in the Premier League is it never over. I said to the players try to relax and just do what you have done for the last four or five years.”
City have three games to play, with the Chelsea clash followed by trips to Brighton and Brentford, while Arsenal have just a home match against Wolves after their trip to Forest.
While battle-tested City are powering towards the finish line, Arsenal’s young team have choked away their bid to win a first title since 2004.
Arsenal’s recent four-game winless run, including a 4-1 thrashing at City, allowed their rivals to seize top spot, an opportunity they have exploited in ruthless fashion.
“We have a very experienced team and it’s not really a new situation to us, competing for the last few games of the season with someone else,” City midfielder Gundogan said.
“The margin for mistakes is very slim, we know that, and that we were able to live these moments already in the past helps us a lot.”
Although Arsenal’s unexpected title challenge seems destined to fall short, it has still been a hugely encouraging season for the north Londoners after over a decade of underachievement.
There is no shame in coming second to a team of treble-chasing City’s class, although Arteta will be frustrated they failed to last the pace after leading the table for long periods.
“We gave a silly goal away and the team had no answers from 2-0. We have to apologise to our people for the second half. It was not acceptable,” Arteta said.
“Mathematically, it’s still possible, but it’s impossible to think about it. We need to digest the result, understand why and have a different reaction.
“I have no idea if Man City will lose it, but I have to think about what we can do to beat Nottingham Forest.”
Arsenal captain Martin Odegaard went close with a stinging shot that whistled just wide before their second half collapse against Brighton.
Leandro Trossard almost netted against his old club when the Arsenal forward’s effort clipped the top of the bar.
But Brighton landed their knockout blow in the 51st minute as Enciso made the breakthrough.
Estupinan’s initial cross was blocked but he knocked the rebound towards Enciso and he headed home while Arsenal appealed in vain for a foul on Jakub Kiwior.
Undav bagged Brighton’s second goal in the 86th minute as Trossard carelessly lost possession, allowing the forward to lift a deft lob over Ramsdale.
Estupinan sent Arsenal fans streaming to the exits deep into stoppage-time when he slotted home after Undav’s shot was parried by Ramsdale.
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