Aguero, who opened the scoring after just 46 seconds, netted all three from close range as City bounced back from their midweek defeat Newcastle with a convincing display at the Etihad Stadium.
Arsenal did pose some awkward questions after finding a quick equaliser through Laurent Koscielny, but two more from Aguero either side of the break put the result beyond doubt.
There was an element of controversy over Aguero's third after the ball struck his arm as he bundled it in, but it was not deemed deliberate.
City eased through the final stages to put the onus on Liverpool to respond at West Ham on Monday. Re-live the action in the live blog below:
Welcome to The Independent's live coverage of this afternoon's main event, Manchester City vs Arsenal.
Pep Guardiola has never won a top-flight title having been behind in the race this late in the season but he has to now, here's Mark Critchley's preview of this must-win game for Manchester City.
Man City attack from the left wing but Arsenal take possession of the ball. They try to play out from the back but Laporte comes forward and wins the ball, he slots it into the middle of the box and Aguero dives forward and heads it into the back of the net.
Bernardo Silva wins a corner for Man City. Arsenal are defending really deep, Gundogan puts the ball into the box, Arsenal head it out to Sterling who let's one fly, Leno dives to his left and pushes it wide. Man City look hungry for more goals.
Arsenal win a corner after Kyle Walker puts the ball out of play. Torreira puts the ball into the middle of the box, Monreal flicks it on and Koscielny heads it home. All square at the Etihad, we could be in for a goal fest.
Kolasinac makes a poor pass and gives Man City the ball back, City make use of it to get Sterling into the box on the left but he's dispossessed and Arsenal can clear the ball.
Laporte wins another corner for City. It falls to Sterling who hits it on the volley but he doesn't connect well and his shot is deflected. Arsenal scramble to clear the ball but only get it as far as Otamendi who shoots and forces Leno into the save.
Arsenal get the ball out of their own half but only for about 20 seconds and City come at them again. Aubameyang and Lacazette are both waiting in Arsenal's half for the ball, that's how deep they're defending.
Bernardo Silva nips in the right hand channel and squares the ball winning a corner. Gundogan puts it in, Ferandinho goes down in the box but Arsenal win the free kick.
Man City have put loads of balls into the box but no-one has got on the end of them yet. Arsenal get the furthest forward they've been since the goal but give away a goal kick. City storm forward and De Bruyne shoots from range sending it over the bar.
Gundogan tries to slip a through ball into the box but Guendouzi makes the interception and Arsenal come forward quickly. Man City were caught a little there but they recover to force Arsenal to play the ball back to their own defence.
Fernandinho is brought down and wins a free kick for City, they play it quickly and send the ball down the left wing, Laporte whips it into the box and Leno comes out to claim it safely.
Man City get put in trouble as Iwobi wins the and gives it to Lacazette. Lacazette feeds a long through ball to Aubameyang that splits the centre backs but Ederson reads it well and bombs out of his area to clear it before it reaches Arsenal's striker.
Guendouzi manages to get the ball to Kolasinac, who turns and shoots making Ederson palm it away. Arsenal are fighting their way back into this game and are starting to cause City some problems.
Torreira puts a late challenge in on De Bruyne and gets a yellow card. Lacazette tries a cross field pass but sends it out of play. Man City are slow on the ball and Lacazette wins it back, gives it to Aubameyang and the forward wins a corner for Arsenal.
Fernandinho puts the ball out wide to Sterling who sends it back inside to Gundogan. Gundogan returns the ball to Sterling who makes a run into the box before sending it across goal to Aguero for a tap in. Quality stuff from Manchester City.