Roberto Mancini's side succumb to defeat at the Emirates as the Gunners all but end their hopes of winning the Premier League this season
Arsene Wenger’s side hit the woodwork on several occasions as Robin van Persie was first denied by Thomas Vermaelen and the bar as his header seemed destined for the net.
Van Persie hit the post in the second-half and was followed by Walcott as it seemed Arsenal would never find the net.
Five minutes from time Arteta picked up the ball and lashed a sublime effort from 25 yards to beat Joe Hart and give the home side the win. City's woes were compounded when Mario Balotelli saw a late red for a second bookbable offence.
The Gunners made one change from their side that was beaten 2-1 by QPR last week, Yossi Benayoun replacing Aaron Ramsey as Wenger reshuffled his team into a 4-3-3 formation.
Roberto Mancini made six changes from the team that drew with Sunderland. David Silva was dropped from the team entirely in a surprise move. Also making way were Micah Richards, Kolo Toure, Nigel de Jong, Aleksandar Kolarov and Edin Dzeko.
Pablo Zabaleta, Joleon Lescott, Gareth Barry, Gael Clichy, Samir Nasri and the fit again Sergio Aguero came into the side to replace them.
Arsenal made a strong start to the game, dominating possession and putting City under real pressure as the visitors struggled to get out of their own 18-yard box. The hosts peppered the area with crosses which meant defenders Vincent Kompany and Lescott had to be at their best to alleviate the pressure on Joe Hart’s goal.
Wenger’s side should have taken the lead from a corner when Van Persie rose highest and headed the ball towards goal. The Dutchman’s effort seemed destined for the net but was blocked on the line by his own teammate Thomas Vermaelen, resulting in the ball hitting the crossbar and bouncing to Tomas Rosicky who could only head over.
Mario Balotelli sparked controversy when he flew into a tackle with Alex Song with his studs showing. He made contact with Song’s shin but referee Martin Atkinson took no action.
City looked to have weathered the early Arsenal pressure and should have gone ahead through Balotelli when he peeled off his marker at a corner and met the cross with a first-time effort which he miscued when free in the area.
The Gunners looked to pile on pressure late in the half, particularly down the right through Theo Walcott and Bacary Sagna but neither could produce a quality final ball to trouble the resolute Kompany and Lescott.
At the start of the second half neither side was able to get any attacking momentum going due to mistakes being committed on and off the ball.
City had a great chance to take the lead when Clichy raided down the left and hit a dangerous cross deep to the back post which Aguero looked poised to head past Szczesny.
However just as the Argentine was about to make contact Zabaleta collided with him taking the power off the effort and the Pole was able to tip the looping header over the bar.
Arsenal responded to the pressure from Mancini’s side and should have gone ahead through Van Persie whose header hit the post from six yards after he found himself free in the area and picked up Song’s lofted pinpoint pass.
Van Persie thought he had finally got his goal when latched onto Song’s pass after drifting off Kompany and rounded the challenge of Zabaleta before firing a right-footed shot past Hart only to be flagged offside, much to his frustration.
The Gunners were beginning to pile on the pressure particularly down the right where Balotelli was offering no defensive support to Clichy. This almost cost them a goal as Sagna found Walcott in the area, who fired an effort at goal but had his shot pushed onto the post by Hart.
The ball fell kindly Vermaelen, who only had to tap the ball into an empty net but he lost his footing and scuffed his shot. The ball landed at the feet of Benayoun but he couldn't turn the ball in and Lescott managed to clear.
Arsenal finally got the breakthrough when Arteta picked the ball in midfield and drove towards the City area, then struck a powerful effort from 25 yards which sailed into the bottom corner of the net, beating the outstretched hand of Hart.
City’s day worsened when Balotelli saw red for a second yellow card after bringing down Sagna with a reckless challenge leaving referee Atkinson with little choice but to give him his marching orders, all but giving Manchester United the title as they succumbed to defeat.
Follow GOAL.COM USA on