Liverpool beat Newcastle United 2-1 at Anfield to finish two points behind the champions but goals by Samir Nasri and Vincent Kompany sparked wild celebrations at City whose heavyweight squad came out on top at the end of a thrilling and fluctuating title race.
Nasri calmed City nerves with a fierce strike in the 39th minute and captain Kompany's neat finish four minutes after halftime put the hosts in cruise control, rounding off a superb debut season for manager Manuel Pellegrini.
"It's a very special time. My first year is not easy to get used to English football but I think I managed a great group of players," Pellegrini said after the trophy was presented on the pitch.
"It was a very special because we've never been at the top of the table but six games away I told my players we needed to change and they believed in me. They are a special group."
For Chilean Pellegrini, the first non-European manager to win the Premier League, it was a first league title since he won the Clausura with River Plate in Argentina in 2003 and a maiden success on this continent.
"I'm just so happy for the manager as well because it's his first title in Europe, it's amazing," Nasri added.
The atmosphere at Anfield was muted as an own goal from Martin Skrtel put Newcastle ahead in the first half, but goals from Daniel Agger and Daniel Sturridge ensured they ended with victory against opponents who had Shola Ameobi and Paul Dummett sent off.
Chelsea had to settle for third spot after coming from a goal down to win 2-1 at Cardiff City, ending a trophyless first season back in England for manager Jose Mourinho.
Tottenham Hotspur comfortably beat Aston Villa 3-0 to finish sixth and clinch a place in next season's Europa League, meaning deposed champions Manchester United, who drew their final match of a terrible season 1-1 against Southampton, will not play in Europe next season for the first time in 24 years.
Norwich City's relegation was confirmed with a 2-0 home defeat by Arsenal and they will join Cardiff and Fulham in the Championship next season.
City began by patiently probing, just as they did against Aston Villa in midweek, with their first chance falling to David Silva who blasted over after 10 minutes.
Minutes later and with the teams still deadlocked, a roar echoed around the Etihad stadium as news filtered through that Liverpool had fallen a goal behind, easing the tension before City opened the scoring.
Yaya Toure laid the ball inside to Nasri 30 metres from goal. He dropped his shoulder, strode forward and unleashed a vicious drive low into the bottom corner.
If that goal was enough to put the champagne on ice, the corks started popping four minutes after the restart when a corner struck the back of Edin Dzeko, falling for Kompany who swivelled and lashed home from close range.
There was a sense of deflation at Anfield from the moment Skrtel fly-kicked a harmless Yoan Gouffran cross past Simon Mignolet into the back of the net.
Radios pressed against the ears of fans in the stands told the home crowd that City were cruising to victory and Liverpool's wait for a top-flight title was likely to go on beyond 24 years.
The second half brought some cheer as Daniel Agger scored Liverpool's 100th goal of the season to level by hooking in at the far post while Daniel Sturridge netted a second in as many minutes, tapping home in similar fashion.
Ameobi was sent off for dissent and Dummett for a clumsy challenge as the dejected Liverpool players were left to ponder what might have been.
"I'm absolutely devastated," Liverpool captain Steven Gerrard told Sky Sports.
"Personally gutted and gutted for the fans. We can't be too down because it's been a great season and we have to bounce back for next season. Hopefully, we can keep improving but we have to congratulate Man City because they've been the best for 38 games."