A title race that had come to the boil since March ended abruptly as Forest won 1-0 at the City Ground to end Arsenal's slim hopes while ensuring their own survival.
City, who have now won three in a row, have 85 points with three games remaining beginning at home to Chelsea on Sunday when they will be presented with the trophy.
Arsenal, who held an eight-point lead over City as recently as March, have 81 points with one game left.
"To have helped the club win a third straight Premier League title is something very special," City captain Ilkay Gundogan said. "It has been a season I will never forget."
Forest's victory, courtesy of a first-half goal by Taiwo Awoniyi, lifted them to 37 points and means they will enjoy successive top-flight seasons for the first time in 27 years.
"First of all congratulations to Manchester City for winning the championship but it is a sad day for us," Arsenal manager Mikel Arteta said after his side's third defeat in five league games. "Now we must heal. It is very painful."
Forest's joy was unbridled at the final whistle and manager Steve Cooper, who has used 33 players this season, said it would allow the former European champions to build.
"Really proud of the club, supporters and players and really proud of that performance," Cooper said.
With Forest safe it is only the fourth time in the Premier League that all three promoted clubs survived.
But the relegation battle beneath them will go down to the wire with two of Everton, Leeds United and Leicester City to join already-relegated Southampton.
Everton needed an equaliser by Yerry Mina in the ninth-minute of stoppage time to salvage a 1-1 draw at Wolverhampton Wanderers -- a point that could prove vital in their bid to extend their unbroken 69-year stay in the top flight.
Wolves had led through Hwang Hee-chan goal at Molineux.
"That could be a massive goal for us. We'll recover ready for next weekend now. One more big final to go," Everton defender James Tarkowski said.
Everton are 17th with 33 points, two points above the relegation zone with one game left against Bournemouth next weekend, but Leeds (31 points) and Leicester (30) both still have two games left.
Leeds visit West Ham United on Sunday with Leicester at Newcastle on Monday. Leeds then end at home to Tottenham Hotspur next Sunday and Leicester host West Ham.
At the other end of the table Roberto Firmino scored an emotional late equaliser in his last home game for Liverpool to salvage a 1-1 draw for his side against Aston Villa that just about kept their hopes of a top-four finish alive.
Liverpool had won seven games in succession to make a late dash for Champions League qualification but defeat by Villa would have guaranteed that Newcastle United and Manchester United would finish in the top four.
Villa led at Anfield thanks to Jacob Ramsey's headed goal in the 27th minute, five minutes after Ollie Watkins missed a penalty for the visitors.
Liverpool's top-four hopes looked over with Manchester United winning at Bournemouth, but Brazilian Firmino, making his Anfield farewell after eight trophy-laden seasons, struck an equaliser in the 89th minute after coming off the bench.
"Bobby comes on, plays top football, is between the lines and scores a fantastic goal," Liverpool manager Juergen Klopp said. "Wonderful story, well deserved the story."
Even the point leaves their chances wafer thin, though, as fourth-placed Manchester United and third-placed Newcastle have 69 points with two games left while Liverpool have 66 with one remaining.
Casemiro's superb acrobatic volley was enough for Manchester United to win 1-0 and one more point from their last two games will guarantee them Champions League football.
Newcastle can seal their return to Europe's elite competition after a two-decade absence if they take a point against relegation-threatened Leicester on Monday.
Firmino's late goal left Villa in seventh place with 58 points, below Brighton & Hove Albion on goal difference although Brighton have three games still to play.
Victory for Brighton at home against relegated Southampton on Sunday will seal European football for the first time in the south coast club's history.
Spurs slipped down to eighth with 57 points as they surrendered an early lead given to them by Harry Kane's superb free kick to lose 3-1 at home to ninth-placed Brentford for whom Bryan Mbeumo scored twice in the second half.
Fulham drew 2-2 at home to Crystal Palace.