Pierre-Emerick Aubameyang scored in either half of the semi-final as FA Cup holders City suffered a first loss at the national stadium in 10 appearances.
It was a bitterly disappointing way to end our defence of the trophy we won last May with Pep Guardiola's side denied by a resolute, determined Arsenal side.
Watch the full 90 minutes via the video above.
CITY X1: Ederson, Walker, Garcia, Laporte, Mendy, Gundogan (Rodrigo 65), De Bruyne, D Silva (C) (Fernandinho 88), Sterling, Jesus, Mahrez (Foden 65)
Subs: Carson, Stones, Zinchenko, Cancelo, Otamendi, Bernardo
ARSENAL X1: Martinez, Mustafi (Holding 82), David Luiz, Tierney, Bellerin, Ceballos (Kolasinac 82), Xhaka, Maitland-Niles, Pepe, Lacazette (Torreira 78), Aubameyang
Subs: Macey, Sokratis, Smith, Willock, Nelson, Saka