Liverpool ended up 3-1 victors against Wolves but the result at Anfield ultimately proved immaterial after substitute Ilkay Gundogan scored either side of Rodri's strike to complete an astonishing turnaround.
City finished on 93 points, one ahead of Jurgen Klopp's men as they ended their rivals' hopes of winning an unprecedented quadruple and lifted a ninth major trophy of Guardiola's reign.
City, who for so long lived in the shadow of neighbours Manchester United, are now establishing their own dynasty to match the achievements of previous great United and Liverpool teams.
“In the last five years winning four Premier Leagues, these guys are legends already,” an ecstatic Guardiola said after the match on Sunday.
“I'm sorry, people have to admit it. This group of players are absolutely eternal in this club because what we achieve is so difficult to do.
“Just Sir Alex Ferguson with United has done it years ago two or three times, now I realised again the magnitude of Sir Alex Ferguson and his United.”
Guardiola also paid tribute to Liverpool, who were 14 points behind City in January, and seemingly out of the title picture before relentlessly hunting City down.
“I've never seen a team like Liverpool in my life,” he said. “I know it's tough, but they helped us become a better team season by season.”
Thousands of City fans decked out in sky blue will line the streets of Manchester for an open-top bus parade on Monday evening, starting at about 1700 GMT.
But for a while on Sunday it appeared City had blown their chance and the Premier League trophy would be heading to Anfield for the second time in three seasons
Mohamed Salah and Andy Robertson struck late on as Liverpool got the win they needed, but by then the turnaround at the Etihad was complete and the Reds' quadruple hopes were over.
The 19-time champions had to settle for second place despite amassing 92 points -- three years after they also lost out agonisingly to City by a single point.
Klopp, whose side have already won the League Cup and FA Cup this season, now faces the task of lifting his men ahead of next week's Champions League final against Real Madrid.
“I am proud but I'm disappointed of course as well,” he said. “There are maybe worse scenarios. If you would have been a point up and don't make it, that might feel even worse. But apart from that, it's not cool.
“But it's not completely unexpected obviously, it was clear before the game that a lot of things had to happen.”
Klopp was bullish as he looked forward to the game against Madrid in Paris, where Liverpool are aiming to be crowned European champions for the seventh time.
“This season is absolutely incredible and will not end today, it ends next week obviously,” he said. “And there we will try absolutely everything.”
“We have now five days to prepare the final, that's what we will do.
“We face an incredibly experienced team but that's OK, that's really OK. And of course, losing the league today increased the desire to put it right next week, it increased the desire.”