Stevan Jovetic scored twice, while Scott Sinclair, Jesus Navas and Kelechi Iheanacho all netted one goal apiece as Pippo Inzaghi's men were humiliated
Manuel Pellegrini's men stormed into an early 2-0 lead thanks to strikes from Stefan Jovetic and Scott Sinclair, the pair capitalising on a sloppy Milan defence which struggled with City's pace down the right flank.
City continued to dominate and added a third as Jesus Navas sent a deflected acrobatic effort beyond Michael Agazzi in the Milan goal, before Nigerian youngster Kelechi Iheanacho grabbed his second goal in as many games with a toe poke from the edge of the area.
Sulley Muntari got on the end of Alex's knock-back to pull one back for the Serie A side before the game was almost abandoned at the break following severe weather conditions, including a tornado warning.
The sides did emerge for the second half following a lengthy delay and City picked up where thye had left off by adding a fifth as Jovetic grabbed his second of the evening, to put the gloss on a formidable City display
Jovetic opened the scoring after 12 minutes when he finished off a pacy attack by slipping home Navas' through-ball at the near post.
Just two minutes later, Sinclair - another of City's peripheral figures last term - reminded Pellegrini of his quality with an expertly-angled finish from inside the area.
Navas got in on the action soon after as City's early onslaught continued with the Spaniard's acrobatic effort finding its way past Milan goalkeeper Michael Agazzi courtesy of a deflection off Andrea Poli.
Amid further hapless Milan defending, 17-year-old Nigerian prospect Iheanacho added a fourth with a poked effort from outside the area.
Muntari salvaged something from the half shortly before the interval but Inzaghi was left with food for thought, having seen his side outplayed.
After being substituted in at half-time, Mario Balotelli made his mark on the contest - tucking away what he thought was Milan's second before being denied by the offside flag.
Jovetic reinstated City's four-goal lead prior to the hour mark, when he combined with Aleksandar Kolarov on the left.
The Montenegro international played a ball out to Kolarov, who played a pass back in for the striker, and he cleverly chipped an on-rushing Milan defender before finishing with his left foot.
The result made it two defeats from as many games for Milan in the International Champions Cup, while Italy's three clubs involved in the United States-based tournament have registered three defeats and one win from four fixtures.