The result also means second-placed Real Sociedad can reclaim top spot if they beat Eibar on Sunday.
Germany's new-look team made a promising return to the international stage with a 1-1 draw against Serbia in a friendly on Wednesday, showing signs of improvement following a disastrous 2018.
If City win their next league game at Everton on March 31 that will set up a Manchester derby at City's Etihad Stadium where a win over their arch-rivals would secure the title.
Fees paid by Premier League clubs passed one billion pounds for the first time, according to financial analysts Deloitte. That was inflated by the world record 89 million pounds ($115.98 million) that Manchester United paid Juventus for France midfielder Paul Pogba.
Against a background of supporter discontent over the form of Wenger's team as the Frenchman decides his future, with a protest outside the ground before kick-off urging the manager to leave his post, Arsenal were nervy from the start.
Manchester City opened up a two-point lead over their neighbours Manchester United at the top of the English Premier League on Saturday thanks to another display of scintillating brilliance in a 7-2 thrashing of Stoke City at the Etihad Stadium.
City, who have dished out a string of maulings in a stellar league campaign, found the Championship side a tough nut to crack and had to wait until the 92nd minute to grab the winner when Argentine substitute Aguero darted in to head home.
Liverpool continued their perfect start to the season to stay top of the Premier League after a goal in each half gave them a 2-1 victory over Tottenham Hotspur at Wembley on Saturday.
Having left it late to earn a 3-2 win in the first leg, City took a while to hit their stride at The Etihad on Tuesday but when they did Guardiola's team produced a magnificent attacking display that will ring alarm bells around Europe.
Manchester City strengthened their Premier League top-four aspirations with a 5-0 thrashing of a woeful Crystal Palace side at the Etihad Stadium on Saturday.
Arsenal climbed into the top four with a laboured 2-1 win over Leicester City.
News of all that's transpired on and off the football field.
IMAGES from the Champions League matches played on Wednesday.
Manchester City manager Pep Guardiola has confirmed he is interested in signing Everton's young centre back John Stones, who has been linked with a 50 million-pounds ($65.72 million) move to the Etihad Stadium.
Liverpool ripped apart Manchester City with three goals inside the opening 31 minutes as they won their Champions League quarter-final, first leg tie 3-0 on Wednesday.
City were not at their all-action best early on as Burnley looked comfortable at the back, but the game turned on a penalty decision that incensed the visitors when Bernardo Silva was adjudged to have been brought down by Burnley goalkeeper Nick Pope just before the half hour.
Guardiola has crafted a sleek offensive unit but, after a breathless opening 15 minutes at The Emirates, they appeared to ease off as their intensity levels dropped and they allowed Arsenal back into the match.
Images from the EPL matches played on Sunday
Germany must come out firing from the first minute when they meet Northern Ireland on Tuesday or they could risk giving the underdogs the confidence to spring a surprise in their final Euro 2016 group game, centre back Mats Hummels said.
Marcus Rashford scored twice as holders Manchester United brushed aside second-tier Burton Albion 4-1 at Old Trafford to reach the fourth round of the League Cup on Wednesday.
Summary of sports events and persons who made news on Tuesday
Images from the English Premier League matches played on Saturday
Manchester City are top on goal difference, with Chelsea second and Liverpool dropping to third, two points ahead of Arsenal, who routed Fulham 5-1.
Seconds after Bournemouth had a chance to snatch victory the ball went back down the other end and Sterling's deflected shot looped past helpless Bournemouth keeper Asmir Begovic.
Manchester City reached the League Cup final, shattering second-tier Bristol City's hopes of a remarkable upset, as the Premier League leaders survived a late fightback to win 3-2 on Tuesday and clinch the tie 5-3 on aggregate.
Manchester City endured some anxious moments but escaped from fourth-tier Newport County with their FA Cup hopes intact as Phil Foden scored twice in an ultimately comfortable 4-1 fifth-round victory on Saturday.
Germany's Lukas Podolski capped his international swansong with a sensational goal to give the world champions a 1-0 victory over England in a friendly on Wednesday.
Czechs beat Slovaks 1-0 to ensure Nations League B survival
News of all that's transpired on and off the football field
German players have no interest in thinking about past losing battles against Italy as they prepare to face them in the Euro 2016 quarter-finals on Saturday, with midfielder Toni Kroos sounding confident they will finally emerge victorious. The Germans have lost all knockout tournament matches against Italy stretching back to 1970 but playmaker Kroos was in no mood to discuss them.
A photo of a black police officer helping a white supremacist during rival rallies held in South Carolina in the United States by African-Americans and members of the white fanatic group Klu Klux Klan has gone viral and is generating positive reaction.
Dustin Brown stole the show at Wimbledon with a sensational upset win over Rafael Nadal. Find out more about this German journeyman...
The following is a look back on key moments in the thrilling Premier League title race, won by Manchester City on Sunday:
Manchester United held on for a goalless draw in a feisty derby with Manchester City after midfielder Marouane Fellaini was sent off for a headbutt in the Premier League clash at the Etihad Stadium on Thursday.
A clash between supposedly the two most expensive lineups in history overseen by two of the most decorated coaches will end the phoney war and ignite the Premier League season for real when Manchester United host Manchester City on Saturday.
Manchester City forward Raheem Sterling struck twice as the Premier League champions beat Crystal Palace 3-1 at Selhurst Park on Sunday to go top of the table and heap pressure on title rivals Liverpool.
Aaron Ramsey scored a hat-trick on Saturday as Arsenal thrashed Everton 5-1 in the Premier League at the Emirates with a display of free-flowing football that the Gunners have sorely lacked away from home this season.
Attack is the best form of defence for Manchester City boss Pep Guardiola.
Germany coach Joachim Loew has been forced to make changes to his team for Thursday's semi-final against hosts France at Euro 2016 because of injuries and a suspension, including replacing key goalscorer Mario Gomez.
Former Cup winners Coventry, now plying their trade in the bottom division of the Football League, revived memories of happier times as Jordan Willis and Jack Grimmer scored the goals in a 2-1 victory at the Ricoh Arena.