Callum Hudson-Odoi dealt the final blow to the champions with his strike towards Ederson's front post, which the Manchester City keeper to his probable disappointment was not able to keep out.
Nottingham Forest extended the gap from 6th place in the table to seven points, and they have conquered the obstacle which was most likely to see them lose points in their final eleven games.
Their home form remains intact and the counter-attacking, defensively orientated style, which has drifted out of vogue with Pep Guardiola's ascension and insertion into English football, showed that, even without the ball, Forest were in control.
When the game did start to open up and there were more spaces for Manchester City to try and find a winner, it worked to The Tricky Trees' advantage in transition.
They were able to capitalise through a precise ball from Morgan Gibbs-White to Callum Hudson-Odoi, who sealed three points for the rising reds.
Here's our player ratings:
Matz Sels - 7
Manchester City's three shots on target were all saved by the Belgian, who was described to emanate confidence by Nuno earlier this week.
It is his 12th clean sheet in the Premier League, but plaudits must be given to how those in front of him performed with robust discipline to avert danger and protect the keeper.
He ensured that his team were organised well, and when called into action, he retrieved and claimed balls with composure, despite Erling Haaland loitering in front of him.
Neco Williams - 8
The left-back was firm and rather than being apprehensive about the prospect of marking Savinho, he matched the Brazilian's agility with his defending, and he marshalled Savinho into areas where he could not trouble Matz Sels.
The support of Elliot Anderson back tracking and doubling up on the winger exemplified Forest's incessant focus on working in pairs in defence all across the pitch in pressing and forcing City into certain, less harmful areas.
The Welsh international was dedicated to the task at hand when Jeremy Doku switched sides to go up against him for a period of the second half.
Williams kept the ball by combining with the players on the left-hand side, where Forest seemed to direct their offence. He made penetrating runs down the line when necessary to assist the in-form Callum Hudson-Odoi.
Murillo - 8
The technique the Brazilian has on the ball encapsulates what his nation is all about, and the centre-back's first touch and dribbles are no longer a surprise to the spectators and to the players around him.
He has one of the highest amount of dribbles completed in comparison to all other centre-backs in the Premier League. Despite his age of 22, this composure seems effortless and ingrained into his style, and he understood that his side should opt to go long and direct, in order to vary their approach and play to their strengths, even if the ball was turned over.
The magnitude of his defensive efforts was significant once again with slide tackles and clearances piling up throughout the match, as well as the constant shuffling and maneuvering across the back line to position himself in the best place to ward off City's intricate play.
Nikola Milenkovic - 8
The Serbian has played a full 90 minutes in every game in this unexpectedly stellar Nottingham Forest campaign in the top flight, only excluding the opening game of the season.
His aerial duels set him apart from many others in the league, and top-goalscorer Erling Haaland was kept under his watchful eye. When the Norwegian did peel off between the lines, he tracked him well to avoid anything convincing on Sels' goal.
Alongside Murillo, he is vigorous. However, his intelligence in this game to provide cover if one of the Man City wingers beat their man was inconspicuous, but it was one of the difference-makers of the tie, especially with Doku and Savinho forced to go inside and into bodies.
Ola Aina - 9
He has played every game for Forest in the Premier League this season and he has not yet signed a new deal at the club, something fans are eagerly awaiting. The Nigerian was one of the standout performers at the City Ground against Pep Guardiola's side.
Jeremy Doku changed the game and got the better of Aina in their battle in December's reverse fixture where Forest lost 3-0. However, in Aina's 50th Premier League game for the club, Jeremy Doku was unable to venture into dangerous areas too near the penalty box.
The right-back was immense in shepherding the jittery and rapid movements of the Belgian winger and displayed conviction in much of his play in possession.
Elliot Anderson - 8
Anderson worked tirelessly, covering ground with excessive hard work but also with well-drilled and organised intelligence.
He contested many challenges in the midfield and his work rate to slow Man City's wingers, who seemed one of their principal outlets, by doubling up with Neco Williams was something he should be getting more recognition for in this game.
He dropped in to receive the ball when necessary. His close control and precise passing were on display when his team needed to shift the momentum with some control of the ball in certain spells.
Nicolas Dominguez - 8
Nuno favoured the Argentine to start in the midfield again and his output did not disappoint. Dominguez made his debut in right midfield away at Man City in 2023, where The Garibaldis were left stranded by The Citizens with two early goals.
His physicality in pressing and hunting the established Man City players down reflects the fact he achieved the most tackles of any player on the pitch this afternoon.
He was up there for the best in passing accuracy too and showed moments of quality, particularly with his crossing and spreading the play.
Callum Hudson-Odoi - 9
For all the defensive work Nottingham Forest had put in, a draw would have sufficed amongst the Forest ranks. But a goal was the cherry on top to stretch the gap to City to four points.
Hudson-Odoi forced Ederson to push his shot onto the post as he combined well with Chris Wood on the transition and cut inside onto his right-foot and fired a fierce strike.
Almost 20 minutes later, the deadlock was broken as the former Chelsea winger picked up and carried the ball forward before slotting the ball in at the front post to send the City Ground into jubilation.
It is now five goals for him and his goal at Anfield too shows his ability to step up when he is needed most, rewarding the efforts of the collective who had been concentrating off the ball.
Morgan Gibbs-White - 8
The captain's most significant involvement was his switch of play to set Hudson-Odoi free. He turned quickly and almost telepathically picked out Hudson-Odoi.
He received a harsh yellow card after pulling back Jeremy Doku in the first half, but Nuno maintained his faithfulness to Gibbs-White, who was controlled and fundamental in the defensive work of his side.
His quality on the ball was something that could not be sacrificed in the context of this game when opportunities to counter did arise, and Nuno got his rewards.
Anthony Elanga - 8
Elanga was the man leading the press and directing the charge with the ball, as he dribbled with so much intent and made several runs in behind.
His early deliveries, finishing the transition and advancing his team up the pitch were his main assets.
Chris Wood - 8
Two more touches than Erling Haaland with 19 in this match, and as the game did open up, his opportunities to add himself to the scoresheet really were there.
He was hesitant to snatch at a shot on a few occasions or to lay one of his teammates off after they had worked hard to find him on the counter-attack.
Nevertheless, Wood was so often in defensive areas in both boxes putting a shift in for his team. He occupied positions with his statue which lured the City defenders to mark him, and despite a lack of service, he looked sharp throughout.
Substitutes:
Ryan Yates - 5
The tenacity of Monday night's goalscorer was nothing unusual, but he did get a yellow card for obstructing Omar Marmoush in a foul which lacked sense in the 75th minute.
His dogged style in not affording the Man City players to turn in the midfield pockets replicated the work of Dominguez well. A strong tackle on Doku, soon after he made an entrance, sums up his leadership at the club.
Ibrahim Sangare - 5
The Ivory Coast international, who joined the club in 2023 and has had many unfortunate periods with injury, slotted into the midfield. He was employed mainly so that Nuno could re-adjust to the impending momentum City would have as they searched for a breakthrough. Sangare was alert and assured for his ten minutes at the end.
Taiwo Awoniyi - 5
He made an introduction late on for Wood, and his physicality frustrated the City defenders. He clearly managed the game as was intended by Nuno.
Morato - 5
He also came on very late with three minutes remaining and fulfilled his role in the most pressurising stages of the game.