Two errors from Ederson proved costly as he allowed Anthony Martial's volley to squirm under his hand in the first half before gifting Scott McTominay the second with virtually the last kick of the match.
United's 2-0 win sees them close the gap on the top four back to three points, while also meaning that Liverpool are now only two wins away from clinching the title.
Find out how all of the action unfolded courtesy of Sports Mole's minute-by-minute updates below.
This is the fourth time that these two sides have faced off already this season and, while Man City boast the vastly superior league position and two pieces of silverware to boot, the head-to-head bragging rights for 2019-20 currently belong to United with two wins to one. Both of those victories have come at the Etihad Stadium, though, continuing a curious recent trend of success for the away team in this fixture.
We will be building up to kickoff throughout the day, so stick with us to make sure you don't miss a beat!
You can check out all of the latest absentees and doubts ahead of this derby here:
The Manchester United manager hit out at the FA ahead of this match having seen his side forced to play on Thursday night in the FA Cup, whereas Man City played on Wednesday, against Sheffield Wednesday. Both teams came through unscathed, but Solskjaer was unhappy that his side have had one day less to get ready for this tie...
"It's that help we get from the FA again – that extra 24 hours that they've had," Solskjaer told reporters.
"I cannot believe why there's a derby on Sunday and we've got to play Thursday night. What's the point in that? That doesn't level the playing field.
"It was the same when we beat them last time to be fair, we played Wednesday and they played Tuesday. Those 24 hours are important, so we've got to be good at recovering now.
"No, I've not [complained]. I don't think we can. It's one of those where you get told when you're going to play, so we've not got any help before this one."
More from Ole Gunnar Solskjaer, whose side were beaten 3-1 the last time they hosted Man City. City blitzed their local rivals in the first half of that EFL Cup semi-final first leg, and Solskjaer insists that his players have learned from that defeat...
"When you're at home and you have to open up against a team like Man City, they will exploit that if you're not 100 per cent," he told reporters.
"Sometimes being at home with your fans, you want to show them what you can do and beat your opponent, and sometimes you open too many spaces.
"That's what we did for those 10-15 minutes or 20 minutes after they scored a worldie. Before then, it wasn't a problem, before Bernardo (Silva) scored in the top corner.
"It wasn't an issue until our heads went for a little while, so we've got to control our emotions more. And we have, we have learned, so that's an experience we'll bring into this game definitely."
Roy Keane, Paul Scholes or Yaya Toure?
David Silva, Eric Cantona or Kevin De Bruyne?
Wayne Rooney, Sergio Aguero or Ruud van Nistelrooy?
We have taken on the near-impossible task of choosing the best combined XI between the two clubs from 1992 onwards. Argue away!
"It's always so nice. I love it, both teams do. They're always special. Of course the situation this season is a bit different because we play to improve, to finish second, not to win the title. For them it's important to qualify for the Champions League.
"We have to prepare for the next games, especially the two 'finals', against Madrid and Newcastle, and to improve what we do. At Sheffield (Wednesday) there were moments when we struggled a bit to attack fluently.
"In every game we have to improve and to do it against the big teams like United in a derby is the best way to improve."
There would be plenty of managers, players and fans who would be delighted to see the likes of Marcus Rashford, Paul Pogba and Harry Maguire miss out for the opposition, but not Pep Guardiola. The Man City boss has taken the rather surprising view that he would prefer to face a full-strength United in today's derby...
"I have always said since the first day I became a manager that I like to play against a full squad from my opponents. I would have loved to play against (Eden) Hazard at the Bernabeu. I don't like to see Rashford out or (Harry) Kane against Tottenham. I prefer to play against top players and all the players available.
"So it is not good for United and he is absent for the national team. Hopefully he can recover as quickly as possible. I would have preferred if he had played for them. At the moment I think about United and which players are available to play against us and after that I am not concerned any more. I don't think even for a half second that he is not there.
"I think about (Anthony) Martial, (Daniel) James, (Bruno) Fernandes and (Odion) Ighalo if he plays, and the way they plays – three or four different types of systems. Also the way we play, trying to settle and understand what we try to do, and the quality they have, the way they play, and to try to go there and put in a good performance."
Here is how the two sides have fared over the past six games across all competitions, although it perhaps does a disservice to United's unbeaten streak, which now stretches to nine matches. Man City have more wins in their last six, though, chalking up five in a row since their defeat to Tottenham, including a victory at the Bernabeu and EFL Cup glory at Wembley.
Man City manager Pep Guardiola has won all 3 of his #PL away matches 🆚 Man Utd - no visiting manager has won more at Old Trafford#MUNMCI pic.twitter.com/zYyVfHR5l0 — Premier League (@premierleague) March 8, 2020
There are around four-and-a-half hours until kickoff at Old Trafford as excitement continues to build towards this showdown. It is the fourth meeting between the two sides this season but every Manchester derby is a special occasion in its own right.
With Paul Pogba and Marcus Rashford definitely out in addition to doubts over Harry Maguire, Aaron Wan-Bissaka and Daniel James, there is sure to be plenty of intrigue around the United starting lineup when it is release in around three hours.
Man City could also be without a major player as doubts emerged over Kevin De Bruyne during the week. Guardiola boasts huge strength in depth, of course, but De Bruyne is perhaps the one player he can least afford to lose given his form at the moment.
This is how the Premier League table looks ahead of today's games, with 15 points separating Man City and Man United. United are, of course, gunning for a Champions League spot this season and so will have a close eye on events at Stamford Bridge, where Chelsea take on Everton in a 2pm kickoff. Man City, meanwhile, are 25 points behind Liverpool but play three times before the league leaders are next in Premier League action.
De Gea or Ederson?
Bruno Fernandes or David Silva?
Anthony Martial or Bernardo Silva?
The Argentine, whose goal against Sheffield Wednesday in midweek saw him overtake Rooney's Man United goal tally in far fewer games for Man City, is just one strike behind equalling the Man City club record for this fixture, while a hat-trick would see him move clear of Rooney as the all-time leading derby scorer.
Both teams have injury doubts hanging over key players ahead of Sunday's contest, with Kevin De Bruyne and Harry Maguire both facing a race to be fit in time.
De Bruyne is suffering from a back injury which ruled him out of the midweek win at Hillsborough, although Guardiola revealed in his pre-match press conference that the playmaker is "getting better" and could still be in contention to feature.
The derby comes too soon for Aymeric Laporte and Leroy Sane, though, with the latter still working towards match fitness having been sidelined since August with a knee injury.
Guardiola has a decision to make regarding who leads the line; Gabriel Jesus scored the winner in their last league outing whereas Sergio Aguero netted the only goal of the game in midweek.
That strike means that the Argentine has now scored 23 goals across all competitions this season - more than any other Premier League player - while he also now has 254 goals in 367 appearances for City, one more than United's record scorer Rooney managed in 559 games for the Red Devils.
Another Rooney record is now in sight for Aguero, who would surpass the former England captain as the leading scorer in Manchester derby history with a hat-trick at Old Trafford. Aguero is currently on nine derby goals, one short of the Man City club record and two behind Rooney's mark of 11.
At the other end of the spectrum, Raheem Sterling will once again be looking for his first ever goal against United, having drawn blanks in all 19 of his previous meetings at Liverpool and Man City - by far his worst run against any opponent.
The winger will no doubt be hoping for another De Gea mistake, then - no player has made more errors leading directly to goals in the Premier League since the start of last season - but Solskjaer has confirmed that the Spaniard remains his number one.
A number of other players are expected to return to the starting XI after sitting out on Thursday, although injury doubts persist over Maguire (ankle), Aaron Wan-Bissaka (back) and Daniel James (knock).
Solskjaer is hopeful of having all three available for the match, but Marcus Rashford and Paul Pogba remain sidelined with this derby coming just too soon for the latter, who is due to return to first-team training next week.
Anthony Martial could be pushed out wide after Odion Ighalo scored twice in midweek, with the January loan arrival staking his claim for a first Premier League start since New Year's Day in 2017.
Bruno Fernandes, who has been widely credited with giving United the lift which has resulted in their improved form, is expected to start again having been directly involved in 19 goals from 21 league games for Sporting Lisbon and United this season.
Man Utd possible starting lineup:
De Gea; Wan-Bissaka, Lindelof, Maguire, Shaw; Matic, Fred; James, Fernandes, Martial; Ighalo
Man City possible starting lineup:
Ederson; Walker, Otamendi, Fernandinho, Mendy; De Bruyne, Rodri, Gundogan; Mahrez, Aguero, Sterling
However, Man City will certainly not wave the white flag today. Pep Guardiola demands a high level of performance in every game, yet alone a derby, and they will be as up for this one as if the Premier League title was still on the line.
Indeed, in an effort to stoke the flames, the club have released a video to whet the appetite for this one even more...
That puts Pep Guardiola's side on the brink of equalling an 89-year-old derby record, full details of which can be found here.
The teams will be released in just 10 minutes, and there is plenty to look out for - will there be Kevin De Bruyne and Harry Maguire among the starters? Will Odion Ighalo lead the line for United? Will Sergio Aguero or Gabriel Jesus start for City?
Harry Maguire starts for United, but no De Bruyne for Manchester City as Phil Foden comes into the XI!
MAN UTD STARTING XI: De Gea; Lindelof, Maguire, Shaw; Wan-Bissaka, Matic, Fred, Williams; Fernandes; James, Martial
MAN CITY STARTING XI: Ederson; Cancelo, Otamendi, Fernandinho, Zinchenko; Rodrigo, Gundogan, Foden; Bernardo, Sterling, Aguero
MAN CITY SUBS: Bravo, Walker, Jesus, Silva, Mendy, Mahrez, E Garcia
It looks as though United will go to three at the back for this match, then, with captain Harry Maguire the headline name to return to the side after missing the midweek win over Derby County.
Brandon Williams also starts at left wing-back, while it looks like the pace of Daniel James will be used as a centre-forward alongside Anthony Martial - which of course means no place for Odion Ighalo.
As for Man City, Phil Foden gets the nod in Kevin De Bruyne's absence, beating the likes of David Silva and Riyad Mahrez to a place in the team. De Bruyne is of course a huge miss, but Foden looks like he could be the future of that Man City midfielder and, having been named man of the match in the EFL Cup final last weekend, he is trusted in the derby today.
Elsewhere, the likes of Walker, Mendy and Gabriel Jesus miss out on the starting lineup, with Aguero leading the line and Cancelo and Zinchenko coming in at full-back.
The 182nd edition of this derby may not carry as much weight as many of the recent meetings when it comes to the destination of the Premier League title, but it still promises to be a significant one for United in particular.
The race for Champions League football next season continues to be hotly contested with only three points separating four teams between fifth and eighth, while Burnley, Arsenal and Everton cannot be counted out just yet either.
Man City's European ban could be cause for double celebration as far as United are concerned if they do end up finishing fifth - the position they currently occupy - with that enough to earn a seat at Europe's top table as things stand.
However, the Red Devils will need to hold off stiff competition from Wolverhampton Wanderers, Tottenham Hotspur and Sheffield United, the latter of whom arguably hold the advantage at this stage given their game in hand over the teams above them in the table.
Man City's appeal against the ban does mean that a question mark remains over whether fifth place will be enough, though, and Ole Gunnar Solskjaer will no doubt be urging his side to exploit Chelsea's inconsistency and bridge the six-point gap to the top four over the final 10 games of the season.
United are certainly going into the business end of the campaign in good form; Thursday's FA Cup cruise at Wayne Rooney's Derby County booked their place in the quarter-finals and made it nine games unbeaten across all competitions, during which time they have kept seven clean sheets and conceded only two goals.
Solskjaer will justifiably argue that they should have only conceded one goal considering David de Gea's gift to Dominic Calvert-Lewin in the 1-1 draw with Everton last time out, although a contentious VAR call then denied the Toffees a late winner at Goodison Park to keep United's unbeaten streak intact.
The 20-time champions will be looking to get back to winning ways in a double-header which sees them face Man City and fellow Champions League hopefuls Tottenham Hotspur in their next two top-flight games, while a Europa League trip to LASK Linz is sandwiched between those two matches.
It is a relatively kind run-in for United after that, though, with Sheffield United and Leicester City the only teams currently in the top half that they will have to face in their final eight games of the campaign.
A positive result against City this weekend would be a bonus to some extent, then, although Solskjaer has already got the better of Pep Guardiola in two of their three meetings this season, both of which came at the Etihad Stadium.
However, City's record at Old Trafford has been superb in recent years, while their most recent defeat to United was made irrelevant by the first-leg victory in that EFL Cup semi-final as they booked their place at Wembley courtesy of a 3-2 aggregate triumph.
Guardiola's side went on to continue their dominance of domestic cup competitions by beating Aston Villa in last weekend's final, claiming a third successive EFL Cup crown, while they sealed their place in the quarter-finals of the FA Cup by edging past Sheffield Wednesday in midweek.
Throw their memorable victory away to Real Madrid into the mix and this is Man City's first taste of Premier League action since scraping past Leicester on February 22 - a result which secured successive top-flight clean sheets for only the second time this season.
Plenty has changed since then - in addition to collecting another trophy and winning at the Bernabeu, they have also seen Liverpool lose in the league for the first time this season, although they remain 22 points adrift of Jurgen Klopp's side and that deficit could grow to 25 when the Reds face Bournemouth on Saturday lunchtime.
Liverpool's defeat was of more significance to City in that it means the Reds could now win the title at the Etihad Stadium on April 5 if both teams keep on winning, although Guardiola's side face some tough challenges between then and now with United, Arsenal, Burnley, Real Madrid and an FA Cup tie against Newcastle United still to come in March.
The priority for the remainder of the campaign will still be adding the Champions League to their trophy cabinet, but Guardiola is a serial winner and this is a team built in his mould so they will very much have their sights set on a League Cup, FA Cup and Champions League treble now.
The champions will not wave the white flag in the Premier League either with the outcome of their European ban still to be decided, and victory on Sunday would see them build an 18-point lead over United to close in on confirmation of a top-four spot.
City make the short trip to Old Trafford looking to win six consecutive games across all competitions for the first time this season, while they could also keep three Premier League clean sheets in a row for the first time in 2019-20.
The magnitude of the match - and perhaps the desire to prevent United from being the team to capitalise on their European ban - should be enough to ensure that the players' minds remain focused on domestic matters rather than the looming visit of Madrid later this month.
We say: Man United 2-2 Man City
There have only been two draws in the last 24 editions of this derby across all competitions, but with both sides coming into the match in good form we can see them cancelling each other out.
United certainly need the win more than City in terms of their league aspirations this season, but the away team has dominated this fixture in recent years and we are backing Guardiola's side to come away with a share of the spoils on Sunday.
In hindsight, James may have been better served looking for a cross to Martial there, but you can see why he went for goal.
Take nothing away from the ingenuity, though, as Fernandes scoops his free kick into the path of Martial, who hits a first-time volley at the front post which squirms under the hand of Ederson.
Man City began the match well, dominating possession in the opening 20 minutes, but United have fought back and deserve their lead at the halfway stage. City have not been themselves from around the midway point of that half and Pep Guardiola must be demanding more from his players.
The controversy came regarding the free kick award itself, though, with replays showing that Fernandes rather bought the set piece, with Bernardo Silva the man harshly penalised.
The Brazilian was duly booked by Mike Dean, but replays showed that there was contact with Otamendi and it could have easily been given as a spot kick to the champions.
City have only had one sight of goal - Sterling denied by De Gea - and they are being beaten at their own game for the most part at the moment.
It is another error from Ederson too, though, as his throw misses its target, allowing McTominay to pounce on it. He still has a lot to do, though, and sweeps his finish into the empty net from all of 35-40 yards out!
None of those have been as sweet as this one, though as United earn a 2-0 derby victory over Manchester City, helped largely by two costly Ederson errors.
Thank you very much for joining Sports Mole for today's derby as Manchester United earn the bragging rights with a 2-0 victory over Manchester City, whose defeat in turn leaves Liverpool just two wins away from clinching the title.
I will leave you with our match report, and be sure to stick around for reactions too. From me, though, it is goodbye for now!