Nico O'Reilly stole the headline with two goals in quick succession, after 60 and 64 minutes.
City started with a very highline and twice nearly allowed Viktor Gyokeres to get in behind their defence, but in the first instance the attacker was offside, before he was squeezed out of play on the byline.
James Trafford made a good early save to deny Kai Havertz and was in the action again moments later with a save with his feet from a powerful Bukayo Saka drive.
Arsenal peppered the City defence with a number of set pieces but were unable to find a way through, while Antoine Semenyo pulled a shot across Kepa's goal.
Erling Haaland came close to connecting to a diving header while Nathan Ake was on hand to clear a neat through ball just as Gyokeres shaped to shoot.
Haaland then headed over a Semenyo cross with the half winding down and tried to take on the entire Arsenal defence all by himself and get a shot away, as the second half kicked off.
Man City were by far the better team after the break and took the lead on the hour mark when O'Reilly headed into the empty net from two yards out after Kepa failed to deal with a high cross from Rayan Cherki.
Kepa was at fault for the first goal but couldn't do much to stop O'Reilly from doubling his side's lead just four minutes later, as he arrived perfectly into the box at the back post to head into the corner of the net.
Mikel Arteta brought on Noni Madueke and Riccardo Calafiore for Havertz and Piero Hincapie as he looked for an immediate response
Calafiore was immediately in on the action with a volley that clipped the outside of a post.
There were more changes, with Gabriel Martinelli and Gabriel Jesus subbed in for Leandro Trossard and Ben White, but time was against the Gunners, who looked a beaten side.
A loose ball fell to Gyokeres, but it just wouldn't come down quickly enough, and the opportunity was snuffed out by the City defence.
There was a chance for some time wasting and the Citizens slowed the game right down until the final whistle, and confirmation of their first trophy this season, and Pep Guardiola's record fifth League Cup.
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