A Tai Sodje brace either side of half time was not enough for Carlos Vicens side at the AON Training Complex, as four goals from Charlie McNeill secured the three points for United in the Under-18 Manchester derby.
The defeat is City's first in the league since November 2019, after an incredible run that spanned 20 games.
Despite City dominating possesion in the early stages, it was United who opened the scoring as McNeill headed in from close range 10 minutes in.
The hosts then doubled their lead moments later as Kwandu Oduroh was adjudged to have fouled Noad Emeran in the penalty area.
McNeill stepped up from 12 yards and saw his penalty well saved by Josh McNamara, however the United forward was the first to the rebound to tap in a second.
Vicens' side looked to react quickly to falling further behind, as a mazing, solo run from Micah Hamilton saw the winger hit a fierce strike from the edge of the box, to draw a good save out of Radek Vitek.
Carlos Borges then capitalised on the rebound but saw his effort tipped onto the post from six yards by the United shot-stopper.
Just five minutes before the break a moment of contreversy saw both City, and United score within the space of a minute.
After the Reds kicked the ball out of play due to injury, the game was restarted by a City throw-in as Hamilton threw the ball back to Marc Jurado.
However, the United right-back let the ball run away from him, allowing a confused Sodje to capitalise and tap in from close range.
This confusion was soon rectifted in an act of fair-play from Vicens' side, as we allowed McNeill to take the ball from the restart unchallenged, and place it into the net to restore their two-goal advantage.
Into the second half, and like the first it was the City youngsters who dominated, only this time we were rewarded with a goal.
A superb low ball across the left from Carlos Borges found an unmarked Sodje, who tapped in at the back post to get Vicens and his team back into the game.
Just two minutes later, the Borges-Sodje link up nearly worked once again for City, as a stunning cross into the United box from the winger was headed just wide from the our number-nine.
As the game entered the final moments, City's hunt for an equaliser continued as Sodje, Hamilton and Borges all came close from to levelling things up.
In spite of this, United, and McNeill added a fourth in the final moments to inflict defeat on Vicens and his side.
HOW WE LINED UP
Tai Sodje led the line up-front.
WHAT IT MEANS
The defeat means our Under-18s remain in third, nine points behind, leaders United with two games in hand.
Vicens side return to Under-18 Premier League North action on Saturday 20 February at 14:00, as we host Middlesbrough at the City Football Academy.