Second-placed Liverpool were pinning all their hopes on the Seagulls taking points off City to overturn a one point-swing in the race for the top-flight crown.
The Anfield-outfit were winning 1-0 at home to Wolves when Albion took an unlikely lead through Glenn Murray - and the red half of Liverpool began dreaming of a first title in 29 years
But Sergio Aguero instantly drew City level before Aymeric Laporte headed home to put the visitors in front at half-time.
Second-half goals from Riyad Mahrez and Ilkay Gundogan confirmed City as Premier League champions, as well as the first team this decade to retain their title.
Albion ended their campaign in 17th-place after a thoroughly disappointing second-half of the season.
Chris Hughton made two changes to the Albion side that drew 1-1 at Arsenal last Sunday. Beram Kayal came in for Dale Stephens and Anthony Knockaert replaced Solly March.
Captain Bruno, in his last appearance before retirement, retained his place at right-back while there was a place on the bench for academy midfielder Jayson Molumby.
Pep Guardiola made a solitary change from City's dramatic 1-0 home win over Leicester City on Monday as £60million man Mahrez took the place of Phil Foden, who dropped out of the matchday squad altogether.
The integral Kevin De Bruyne also managed to return to the bench after successfully recovering from a hamstring injury.
If City were expecting a comfortable afternoon against a Brighton side with nothing to play for, they were in for a shock after the opening ten minutes.
The Seagulls won their first corner on five minutes from a Pascal Gross cross from the right-flank. Knockaert's corner found topscorer Murray but unfortunately the big centre forwards was judged to be offside.
Four minutes later and a lightning-quick counter-attack saw Knockaert play a delightful low cross-field pass to Alireza Jahanbakhsh. The Iranian winger cut inside on his right before firing his 25-yard shot just wide of the left-hand post.
City, bar the live-wire Bernardo Silva, were disappointing even at the 20 minute mark. Albion keeper Maty Ryan did well to punch clear Raheem Sterling's cross-cum shot before Gundogan's strike from the edge of the area was well blocked by an outstretched Seagulls player.
News started to filter around the Amex that City's title-rivals Liverpool had taken a 1-0 lead at Wolves to move them to top-of-the-table, naturally leading to a chorus of '1-0 to the Liverpool' from the home faithful.
Brighton then put the cat amongst the pigeons as they took a sensational lead on 26 minutes. A marvellous corner from the left from Gross found Murray at the near-post who got between Oleksandr Zinchenko and City keeper Ederson to nod home and send the Premier League title in the direction of Merseyside.
But Albion's lead lasted less than 90 seconds as the visitors equalised. Laporte played a short pass to David Silva into the box, who delicately flicked the ball into the path of the onrushing Aguero.
The Argentine slid the ball between the legs of Ryan from close-range to restore parity and reignite City's title-hopes.
Two minutes later and Ryan was forced into a superb save to keep the game level. Zinchenko's cross found Bernardo Silva in the middle of the area, and the Australian keeper did well to scramble across his line to keep out the diminutive midfielder's header.
After a bright start to the half, Albion were beginning to drop deep in their defensive duties allowing City to play their natural possession-heavy brand of football.
A poor pass from Murray on 37 minutes went straight to David Silva on the edge of Brighton's area. The little Spaniard released Mahrez down the right and the Algerian's flashed shot from a tight angle was well saved by Ryan out for a corner.
And it was from this corner that City returned to the top of the Premier League. Mahrez's set-piece found Laporte in the six-yard box, who got ahead of Murray at the far-post to plant the ball into the back of the net with a header.
But Albion weren't dead and buried. In the second minute of first-half stoppage time Lewis Dunk hit a fine swerving 25-yard free-kick that forced Ederson into pushing the ball over the bar.
Unfortunately there was no time for the corner as referee Michael Oliver blew for half-time. Although City held the lead the Seagulls looked dangerous on the counter attack and were more than capable of giving the champions-elect a scare in the second-half.
The opening ten minutes of the second-half once again saw City have a lot of the ball without creating anything clear-cut. Aguero sliced his volley from a Sterling cross before David Silva danced his way into Brighton's penalty area, only to lose his footing allowing Dunk to clear.
But City did eventually find their title-winning goal on 64 minutes. Mahrez received the ball 25-yards out, shaped to shoot before dummying to leave Dunk all at sea, and let fly with a rising drive that beat the stretching Ryan to make it 3-1.
City then put the icing on their title-winning cake eight minutes later. A surging Sterling run saw the England international brought down on the edge of the box.
German midfielder Gundogan stepped up and curled a superb free-kick past a diving Ryan to well and truly settle City's nerves.
Aguero had the chance to make it five ten minutes before the end but great work from Gross saw the German dispossess City's all-time goalscorer in the box with the goal at his mercy.
With seven minutes to go, Brighton skipper Bruno's last game in football came to an end as he was replaced by Martin Montoya. The retiring Spanish right-back was given a standing ovation by the Seagulls supporters and both sets of players as his name rang around the Amex.
Brighton & Hove Albion: Ryan, Bruno (Montoya 83), Duffy, Dunk, Bernardo, Knockaert, Kayal, Bissouma, Jahanbakhsh (Locadia 67), Gross, Murray (Andone 68). Unused: Button, Burn, Bong, Molumby.
Manchester City: Ederson, Walker (Danilo 88), Kompany (Otamendi 86), Laporte, Zinchenko, Gundogan, Silva (De Bruyne 78), Mahrez, Sterling, Bernardo, Aguero. Unused: Muric, Stones, Sané, Jesus.
Referee: Michael Oliver