City's title race finally ended in disarray, with Mario Balotelli sent off minutes after a late winner from Mikel Arteta left the Blues trailing by eight points with just six games to play.
Arsene Wenger's Gunners, still smarting from the loss of a clutch of stars to the Blues, applied a deadly blow to Roberto Mancini's fading dream at a celebrating Emirates Stadium.
Arteta, so often a thorn in City's side when he wore the blue of Everton, conjured one of his long-range specials and in doing so effectively ensured that United will keep the trophy.
While Mancini will not throw in the towel until mathematics dictates that he must, the much-anticipated Etihad derby on 30 April will now be a long way from the vaunted title decider.
Arsenal started as if they meant to make City pay for those two 1-0 defeats earlier this season, and the Blues defence had to be at its strongest and most vigilant for a torrid opening spell.
Yaya Toure picked up a booking inside two minutes for his first foul, on Tomas Rosicky, although the question of him walking a red-card tightrope disappeared when a clash with Song saw him eventually limp off with a knee injury.
The midfielder's early exit hardly helped the cause. City were already without injured David Silva, who scored the only goal of another tight encounter with the Gunners at the Etihad back in December.
But the Blues survived, even though Rosicky had a half-decent shot deflected by Kompany, and Robin van Persie saw his goalbound header from a corner hit team-mate Vermaelen.
But the striker's reaction to that - a petulant kick at the goalpost in frustration - summed up his first half for the Italian, who was in feisty mood and being wound up by Arsenal players.
Whether they were trying to tempt him into forcing the red card from referee Martin Atkinson, he trod a fine line with a string of challenges that looked either high or painful
He was eventually shown yellow by the referee for a high one on Bacary Sagna, having already escaped the Mr Atkinson's wrath - if not Arsene Wenger's - for one on Alex Song that looked rather worse.
City's attacking contribution increased in the second half, although Zabaleta inadvertently baulked Sergio Aguero as Samir Nasri's centre was about to offer him the chance of a scoring header.
The first and only time Kompany put a foot wrong, the Blues almost paid the ultimate price. Van Persie lost his marker but headed Song's clever cross against the foot of a post with Joe Hart beaten.
As the tension mounted, Balotelli was inches off connecting with a penalty area overhead kick from Kompany's header while Van Persie had a goal ruled out having strayed a mere foot offside.
Then after Joe Hart tipped a Walcott effort against the post, Vermaelen somehow failed to poke the ball over the line from point-blank range thanks to Lescott's desperate intervention.
But there was no stopping Arteta as the former Everton midfielder launched a shot from outside the area that Hart saw late as it zipped past Lescott and inside his left-hand post.
And there was still time for Balotelli to collect the second yellow card and the subsequent red he had threatened most of the game by bundling over Sagna from behind.