The FA Cup holders knocked the Manchester giants out of the competition for the second year running after the Latics took full advantage of lacklustre defending from the hosts.
In one of the biggest upsets in the recent history of the decorated competition, Ben Watson grabbed the only goal as Wigan - which would go on to suffer relegation from the Premier League - triumphed against big-spending City in May last year.
Watson was not available this time around, having suffered a broken leg last month, but his spirit was invoked by the Wigan players, who wore shirts bearing his picture and the slogan, 'We can do it! For Ben' in the warm-up and went on to spring another sensational shock.
They were given a helping hand, too, by the much-maligned Martin Demichelis, who was arguably at fault for Wigan's two goals.
In a moment akin to when he earned a red card that set up a UEFA Champions League defeat to Barcelona a couple of weeks ago, Demichelis gifted the visitors a penalty - which Jordi Gomez dispatched - with a clumsy challenge on Marc-Antoine Fortune.
Things then went from bad to worse for the defender when his dreadful positioning aided James Perch's strike.
Demichelis' blushes appeared set to be spared when Samir Nasri pulled one back with 22 minutes remaining, but Wigan held on to book a semifinal clash with Arsenal at Wembley and complete a happy return to Manchester for City legend and Wigan boss Uwe Rosler.
City manager Manuel Pellegrini, chasing a domestic treble in his first season at the helm, having overseen a League Cup win at Wembley last week, fielded his strongest XI, with the exception of resting midfielder Fernandinho and playmaker David Silva ahead of the midweek second leg Champions League tie with Barcelona.
Yet it was Wigan which edged the opening exchanges as City struggled to break down a team determined to sit back and counter-attack.
The visitors' patience paid dividends in the 26th minute as Gomez sent Costel Pantilimon the wrong way after Demichelis felled Fortune, having been beaten for pace by the striker.
City's frustration increased thereafter as patient build-up play failed to yield openings of any note. Itsannoyance grew considerably at the start of the second period when Wigan grabbed a second. James McArthur found space on the left wing and crossed for Perch to slide home ahead of Gael Clichy at the back post.
Pellegrini turned to the bench for answers, bringing on Silva, James Milner and Edin Dzeko in a triple change.
It almost paid immediate dividends as a Dzeko header struck the inside of the post from Clichy's cross.
City did level soon after, though, as Nasri volleyed home from the edge of the area, his effort controversially going through the legs of Joleon Lescott, who appeared to be in an offside position.
The sides traded golden opportunities after, Micah Richards curling just wide before Fortune blazed into the stands instead of sliding in James McClean.
Wigan's goal then came under siege, with Emerson Boyce's last-gasp challenge denying Dzeko before Scott Carson kept out Sergio Aguero at full stretch, but Rosler's men held on for another famous win.