With nearest challengers Manchester United held at Bolton, the Gunners seizedthe advantage and took another step towards retaining their title.
City, still with an outside chance of a top six finish, were stunned by Arsenal's whirlwind start in which they scored four times in the opening 19 minutes.
Arsenal manager Arsene Wenger was delighted by his side's clinical finishing.
"We created chance after chance in the opening 20 minutes but, compared to other recent away games at Liverpool and Newcastle, we took them all," he said after the match.
"After 20 minutes it was difficult to keep our concentration, but we did a professional job and the fifth goal killed off City.
"I think the fact that five different players scored sums it up as everybody contributed."
City manager Kevin Keegan, while disappointed by his side's disappointing display, believes Arsenal will not only win the Premiership but also the Champions League.
Keegan admitted he had got things wrong tactically as he opted for three attacking midfield players sacrificing anchorman Kevin Horlock.
"Arsenal have had two hard games in the past week while we have had a rest, and the idea was in the first 20 minutes to get them on the back foot.
"But the way we defended, and the goals we conceded, we never gave ourselves a chance and it was damage limitation after that.
"We came up against an exceptional team and credit should be given to them."
Dennis Bergkamp broke the deadlock in the fourth minute after Sylvain Wiltord sliced open the City defence with a superb diagonal ball.
Thierry Henry made defender Richard Dunne's life a misery dribbling along the byline to set up Arsenal's second which was scored by Robert Pires.
Henry then scored his 25th goal of the season and Sol Campbell headed a fourth in the 19th minute with victory already assured.
Patrick Vieira added a fifth early in the second half but City showed a never-say-die spirit creating a host of chances with goalkeeper Stuart Taylor making six superb saves and proving more than an able stand-in for the injured David Seaman.
But Taylor was finally beaten in the 87th minute as Arsenal old boy Nicolas Anelka scored a consolation effort for City.