- Kevin De Bruyne (5')
- Gabriel Jesus (37')
- Diogo Jota (13')
- Sadio Mané (46')
The result means that Pep Guardiola's side remain one point ahead of the Merseyside club with seven league matches remaining.
- Man City-Liverpool takeaways: Gabriel Jesus, Diogo Jota step up
It was also a repeat of October's scoreline at Anfield between both sides and the first time City had scored first and not gone on to win in the Premier League this season.
Both teams will face each other again next Saturday in the FA Cup semifinal (stream LIVE at 10:30 a.m. ET on ESPN+ in the U.S.).
"It was hard. To be fair I think we played excellent," De Bruyne told Sky Sports. "The way we played was very good and we should score more. It is what it is. It was a great game."
Liverpool bounced back and found an equaliser after 13 minutes when Mane set up Jota inside the box to squeeze the ball under City goalkeeper Ederson.
Ederson almost scored a comical own goal just after the half an hour mark following a back-pass but managed to clear the ball away before it crossed the line.
City started to the gain the upper hand and went back ahead after 37 minutes when Jesus managed to stay onside and finish off Joao Cancelo's cross at the back post.
Just before the break, Jota was put through on goal but Aymeric Laporte produced a fine last-ditch challenge to prevent the equaliser.
Liverpool grabbed an equaliser 48 seconds into the second half when Mohamed Salah set up Mane to smash the ball into the top corner.
Sterling thought his strike had regained the lead for the hosts after the hour mark but the goal was ruled out for offside by VAR.
Substitute Riyad Mahrez had a golden opportunity in the final seconds but lofted his close-range effort over the bar.
"I think we can describe it as a boxing fight, both arms down for a second and you get a massive knock," Jurgen Klopp told Sky Sports. "I liked a lot of things. I thought we were closer than ever.
"The second half start was much better. City really tried obviously things like balls in behind. It makes sense when you have these smart runs. In moments when we tried to breath a little bit another one comes. It was a great game and the result, we have to live with and can live with."
Speaking to BBC Sport, Guardiola said: "I'm really happy with the way we played. We played well first half, it was tough for 10 minutes in the second half but that is normal when you concede.
"They have quality and a lot of threats, but we performed well. It is football, these things happen. How many managers say, 'in the last minutes, we can't concede,' we can concede until the referee blows the whistle."
- Anthony Taylor
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