Pep Guardiola's relentless side ran riot as they made it 12 successive league wins against Arsenal with a masterful De Bruyne scoring twice and Erling Haaland also on target as City seized control of their destiny.
De Bruyne fired City ahead in the seventh minute and the hosts bombarded Arsenal's goal before John Stones deservedly doubled their lead with a header in first half stoppage time.
Arsenal, who began the clash five points clear but having drawn three successive games, looked powerless to stop the onslaught and when De Bruyne struck again early in the second half it became a damage-limitation operation for the leaders.
Rob Holding grabbed an 86th-minute consolation but it was too little too late for Mikel Arteta's side and City now look firm favourites to claim a fifth title in six seasons.
Haaland finally got on the scoresheet in stoppage time for his 49th goal of the season in all competitions - the most by a top-flight player in England since Clive Allen in 1986-87.
City's seventh successive league win left them with 73 points to Arsenal's 75, but crucially they have played two fewer games than the Londoners whose hopes of a first title since 2004 now look forlorn after four games without a win.
Guardiola's City, who have trailed Arsenal for almost the entire season, will go top if they beat Fulham at the weekend.
"We know what people will say but it's so hard and a lot of things can happen," De Bruyne told BT Sport.
"It's seven games still to go, lots of points, and we are still two points behind Arsenal. Our schedule is hectic, there are a lot of things going on we have to prepare for Sunday."
Three successive draws in a damaging April took the wind out of Arsenal's sails but a first league win over City since 2015 would have put them put them back in charge of the race.
Unlike against bottom Southampton in Friday's frenetic 3-3 draw they got through the opening minute without conceding.
But the writing was on the wall as Haaland showed great strength to control a high ball and send de Bruyne racing away into space with a neat pass and the Belgian ran through before nonchalantly curling a skidding shot inside the post.
