The victory advanced Pep Guardiola's side to the quarter-finals, where they were drawn to face Southampton.
Nathan Ake scored the winning goal in the 58th minute, arriving unmarked at the back post to meet another pinpoint delivery from De Bruyne .
Experience the high-intensity goals and key tactical moments from this five-goal classic at the Etihad:
Darwin Nunez had several significant chances to equalize again for Liverpool, but he dragged his final big opportunity wide of the far post in the 72nd minute.