Pep Guardiola's defending champions are seven points behind the Reds in third place, with second-placed Tottenham Hotspur, who beat Cardiff City 3-0 on Tuesday, trailing Jürgen Klopp's side by six points.
Victory at the Etihad Stadium could open a significant gap on Liverpool's nearest rivals.
It's one of the Premier League's most eagerly-anticipated matches of the season, and we've picked out three key player battles that could help decide it...
Danilo v Mohamed Salah
With Benjamin Mendy out injured since November, City have been forced to try out a series of alternative options at left-back.
Erstwhile midfielder Fabian Delph and attacking wing-back Oleksandr Zinchenko have both featured recently, but Guardiola could turn to Brazilian full-back Danilo at the Etihad.
Ordinarily a right-back, the 27-year-old is no stranger to the left-sided role, having played there a dozen times for City last term and he also operated as an occasional left-back for former club Real Madrid.
The Brazil international is right-footed and that may play a part in Guardiola's thinking, too. It would be the natural foot with which to attempt to deal with Salah's increased tendency to cut in from the right flank and take more central positions this season.
Whoever fills the slot will certainly have a tough task. Salah is Liverpool's leading scorer in 2018-19 and has a penchant for netting against these opponents as well.
The in-form Egyptian forward has scored three goals and provided two assists in his last four matches against City and has found the net seven times in his last six appearances for the Reds.
Fernandinho v Firmino
The battle between these two compatriots is sure to be an intriguing one.
Liverpool's Firmino heads into the match having scored a hat-trick in Saturday's 5-1 win against Arsenal to become the most prolific Brazilian in Premier League history with 43 goals, while 33-year-old Fernandinho has proven to be peerless as the defensive anchor of City's midfield.
Klopp took time out to pay a glowing tribute to his No.9 following that victory over the Gunners, but not for his goals; instead, for his more unheralded work as a deep-lying forward, facilitating his colleagues.
"Bobby Firmino played an outstanding season so far," the manager told Liverpoolfc.com. "The different system we play is possible because he plays how he plays, because he is everywhere. He is a link-up player."
And it's this playmaker role that is likely to bring him into conflict with Fernandinho.
A quick look at the heatmaps from Liverpool's first meeting with City this season shows how Firmino (No.9) dropped deep alongside James Milner (No.7) into the area occupied by midfield duo Fernandinho (No.25) and Bernardo Silva (No.20).
An incredible force going forward - Firmino was second only to Salah for assists in 2018 and was LFC's third-highest goalscorer - the 27-year-old also ranked third for tackles and duels won over the past calendar year.
There are not many attackers so versed at both sides of the game. That defensive acumen should also enable Firmino to harass Fernandinho - often the starting point for City's attacks - when the Reds are out of possession and disrupt the opposition's tempo.
Sergio Aguero v Virgil van Dijk
Liverpool centre-back Virgil van Dijk has been a colossus at the heart of a defence that has conceded just eight goals in the Premier League all season.
City striker Sergio Aguero has scored in all six of his Premier League appearances against the Reds at the Etihad.
Something has got to give.
The diminutive Aguero is unlikely to pose an aerial threat to Liverpool's towering centre-back, but the Argentinian's quick feet, close control and trickery have delivered nine league goals and five assists so far this campaign.
However, Van Dijk is far from just a physically imposing defender. He is more than comfortable on the ball - leading the team with an average of 74.7 passes per match - and is an excellent reader of the game.
He has plenty of speed to call upon, too, should he need it. The Netherlands international has been clocked at an incredible 34.61kmph this season and should certainly be able to deal with a pace assault on the deck.
This is certainly one key battle to keep an eye on.