Jurgen Klopp's side needed one victory to seal the league but City's failure to win means they cannot be caught.
Christian Pulisic opened the scoring for the home side, before Kevin De Bruyne equalised with a stunning free-kick, but it was all over when Willian converted from the penalty spot after Fernandinho's red card.
The Reds placed both hands on the trophy with an impeccable record of 28 victories, two draws and just a single defeat, ending their 30-year wait for a league title.
Liverpool have become the butt of so many jokes over the years with Manchester United accelerating past them to 20 league titles with 13 plaques coming in the Premier League era.
It is Liverpool's 19th top-flight title and their first since 1989-90.
Despite being urged to "stay home" by the city's metro mayor because of coronavirus, thousands of fans gathered at Anfield to celebrate.
Many of the supporters who congregated at the club's ground wore face masks and some lit flares.
A number of Reds players, including goalkeeper Alisson, defender Virgil van Dijk and midfielder Alex Oxlade-Chamberlain, celebrated together after watching the Chelsea-City game.
Klopp, wearing a Liverpool shirt and clearly emotional, told Sky Sports: "I have no words, it's unbelievable.
"It's much more than I ever thought would be possible. Becoming champion with this club is absolutely incredible.
"I haven't waited 30 years - I have been here for four and a half years - but it is quite an achievement, especially with the three-month break because nobody knew if we could go on.
"I know it is difficult for people in this moment but we could not hold back. We will enjoy this with our supporters when we can."